In a Machine Shop, the Marginal Physical Product of an Additional

question 246

Multiple Choice

In a machine shop, the marginal physical product of an additional unit of labor is 4 units of output, while the marginal physical product of an additional piece of machinery is 2, under what conditions would the firm increase labor usage?

• A)It would increase labor usage if the wage rate is more than twice the unit price of a piece of machinery.
• B)It would increase labor usage if the wage rate is less than twice the unit price of a piece of machinery.
• C)It would increase labor usage as long as the wage rate is less than the unit price of a piece of machinery.
• D)It would not increase labor usage under any scenario.

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Definitions:

Repurchase Range

The price range within which a company intends to buy back its own shares from the market, often to reduce the overall share count and increase shareholder value.

Target Payout Range

The designated percentage range of net income that a company aims to distribute to its shareholders as dividends.

Preferred Trading Range

The price range within which a security is considered attractive for purchase or sale by investors based on historical price movements and other factors.

Stock Splits

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, although the overall value of the company does not change.