If Another Worker Is Hired with a Marginal Product Greater

question 272

Multiple Choice

If another worker is hired with a marginal product greater than the previously hired worker,which of the following will be true?

• A) total costs will decrease
• B) fixed costs will decrease
• C) marginal cost will increase
• D) marginal cost will decrease
• E) average fixed costs will increase

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Definitions:

Manufacturing Overhead Cost

All indirect costs related to the manufacturing process, such as utilities, maintenance, and factory supervision.

Produced

Refers to the quantity of goods that have been manufactured or completed during a specific time period.

Units

A measure of quantity, often used in inventory management, production, and accounting, to quantify items or services.

Variable Cost

Rephrased: Expenses that vary with production output or business activity levels.