If the Supply of Another Input Used Decreases, the Marginal

question 4

Multiple Choice

If the supply of another input used decreases, the marginal product of labor can:

• A)decrease, decreasing the supply of labor.
• B)increase, increasing the demand for labor.
• C)decrease, increasing the demand for labor.
• D)increase, increasing the supply of labor.

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Definitions:

Earnings per Share

A company's net profit divided by the number of its common shares outstanding, indicating the company's profitability on a per-share basis.

EBIT

Earnings Before Interest and Taxes; a measure of a firm's profit that includes all expenses except interest and income tax expenses.

Sales

The activity of selling goods or services in exchange for money or other compensation.

DFL

Degree of Financial Leverage, a ratio that measures the sensitivity of a company's earnings per share to fluctuations in its operating income.