We Often Think of Technology and Labor as Substitutes for Each

question 31

Multiple Choice

We often think of technology and labor as substitutes for each other, but technology can lead to the hiring of more labor if it:

• A) decreases the average total cost of production.
• B) decreases the compensating differential.
• C) increases the marginal product of labor.
• D) increases the opportunity cost of labor.

Interpret and calculate credit terms and discounts.

Distinguish between purchase allowances, sales returns, and other adjustments.

Calculate and interpret financial ratios related to liquidity and profitability.

Understand the influence of inventory management systems on financial ratios.

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Definitions:

Gross Profit

The financial metric calculated by subtracting the cost of goods sold from the total revenue, representing the profit made before deducting operating expenses.

Gross Profit

The difference between sales revenue and the cost of goods sold before accounting for operating expenses, interest, and taxes.

Merchandising Business

A type of business that purchases goods at wholesale prices and sells the same goods at retail prices to end-users or customers.

Financial Statements

Formal records that outline the financial activities and conditions of a business, organization, or individual, often including the balance sheet, income statement, and cash flow statement.