Assuming Labor Is the Only Variable Factor of Production, Production

question 193

Multiple Choice

Assuming labor is the only variable factor of production, production of a good will occur

• A) as long as the marginal revenue product of labor is positive.
• B) if society values a good more than it costs firms to hire the workers to produce the good.
• C) as long as the product's price is greater than the marginal revenue product of labor.
• D) if the marginal cost of a unit of output equals the marginal revenue product of labor.

---

Definitions:

Straight-Line

A method of calculating depreciation of an asset, whereby its cost is evenly spread over its useful life.

Cash Payback Period

The time it takes for a business to recover its investment in a project solely from cash flows, used to assess the risk or attractiveness of an investment.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the consumption of the asset.

Cash Payback Period

The duration required for an investment to generate cash flows sufficient to recover the initial cost of the investment.