Figure 18-1 on the Graph, L Represents the Quantity of Labor and Labor

question 483

Multiple Choice

Figure 18-1
On the graph, L represents the quantity of labor and Q represents the quantity of output per week.
-Refer to Figure 18-1. Suppose the firm sells its output for $10 per unit, and it pays each of its workers $400 per week. When the number of workers increases from 4 to 5, the

• A)marginal revenue is $450 per unit of output, and the marginal cost is $400 per unit of output.
• B)value of the marginal product of labor is $3,900, and the marginal cost per unit of output is $400.
• C)value of the marginal product of labor is $450, and the marginal cost per unit of output is about $8.89.
• D)firm's profit increases.

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Definitions:

Operating Activities

Activities that are directly related to the primary operations of the company, including cash inflows and outflows from selling products and services.

Indirect Method

A financial reporting approach to prepare the cash flow statement where non-cash activities are adjusted to the net income to calculate cash flow from operating activities.

Statement of Cash Flows

A financial statement that details the inflows and outflows of cash within a company during a specific period.

Cash Receipts

The collection of money (cash, checks, electronic transfers) by a business from its customers, either for goods sold or services provided.