Suppose That When One Additional Unit of Labour Is Hired

question 7

Multiple Choice

Suppose that when one additional unit of labour is hired, total product increases from 100 to 110 units of output per month. Marginal product must therefore be

• A) constant.
• B) positive.
• C) zero.
• D) decreasing.
• E) increasing.

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Definitions:

Direct Materials

Raw materials that can be directly traced to the production of a specific product.