-If the Value of Marginal Product of the 10th Worker

question 27

Multiple Choice

-If the value of marginal product of the 10th worker is $60, then the

• A) marginal cost of the 10th worker will be $6.
• B) wage rate of the 10th worker will be $6.
• C) firm will not hire the worker if the wage rate is less than $60.
• D) quantity of labour demanded when the wage rate is $6 will be 10 workers.
• E) quantity of labour demanded when the wage rate is $60 will be 10 workers.

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Definitions:

Direct Materials Used

The raw materials directly used in the production of goods, traceable to the end product.

Direct Labor

Labor provided by employees who are directly involved in the production of goods or the delivery of services, forming an essential part of the production process.

Manufacturing Overhead

All indirect costs associated with the production of goods, such as utilities, maintenance, and salaries not directly tied to specific units.

Cost of Goods Manufactured

The total production cost of goods completed during an accounting period.