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.

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Definitions:

GAAP

Stands for Generally Accepted Accounting Principles, which are a common set of accounting rules and standards used in the United States.

Notes Payable

Written agreements where a borrower promises to pay back a specified sum to the lender at a future date.

Adjusting Entry

A journal entry made at the end of an accounting period to record any unrecognized income or expenses for that period.

Sales Tax

Sales tax is a government levy imposed on the sale of goods and services, collected by the seller from the buyer at the point of sale.