An Increase in the Supply of Labor Has the Effect

question 122

Multiple Choice

An increase in the supply of labor has the effect of

• A)increasing the marginal product of labor.
• B)increasing the wage.
• C)decreasing the marginal product of labor.
• D)decreasing the wage.

---

Definitions:

Marginal Revenue Product

The extra income produced by using an additional unit of a production input.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production, such as labor or capital.

Marginal Revenue Product Curve

A graph that illustrates the additional revenue generated from employing one more unit of a resource.

Variable Input

relates to a production factor that can be adjusted in the short term to change the level of output, such as labor or raw materials.