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:

Supplies Account

This is an account used in accounting to track the costs of supplies used in the operation of a business during an accounting period.

Wages Accrued

A liability representing wages earned by employees that have not yet been paid by the employer.

Rent Earned

Income received by a property owner when they lease out a property to a tenant.

Income Statement

A financial statement showing a company's revenue and expenses over a particular period, culminating in the net income or loss for that period.