If the Cost of Using Skilled Labor Was Twice the Cost

question 111

Multiple Choice

If the cost of using skilled labor was twice the cost of using unskilled labor, and both were used by a profit-maximizing firm, the firm would adjust the quantity of each type of labor until

• A) the marginal product of each was the same.
• B) twice as much unskilled labor was used.
• C) half as much unskilled labor was used.
• D) the marginal product of skilled labor was twice that of unskilled labor.

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Definitions:

Journal Entry

A record of a business transaction in an accounting ledger that includes the accounts and amounts to be debited and credited.

Account Number

A unique identifier assigned to an account that enables transactions and tracking.

Debit

A transaction recorded in accounting that leads to a rise in a company's assets or a reduction in its liabilities on the balance sheet.

Credit

An accounting entry that increases liabilities or equity, or decreases an asset or expense account, on a company's balance sheet.