Assuming Labor Is the Only Variable Factor of Production, Production

question 161

Multiple Choice

Assuming labor is the only variable factor of production, production of a good will not occur

• A) as long as the marginal revenue product of labor is positive.
• B) if society values a good less than it costs firms to hire the workers to produce the good.
• C) as long as the productʹs price is less 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:

Product Innovation

This involves creating new products or significant improvements in the existing products to meet consumer needs or open new markets.

R&D Expenditures

Investments in research and development, aimed at innovating and improving products or processes.

Rate of Return

The increase or decrease in value of an investment during a certain timeframe, shown as a percent of the investment's beginning price.

Interest-Rate Cost

The expense incurred by borrowers when they take out loans, represented as a percentage of the total loan amount charged over time.