Given That the Market Wage Rate Is $50 and Both

question 18

Multiple Choice

Given that the market wage rate is $50 and both the labor and the goods market are perfectly competitive,a profit-maximizing firm should hire an additional worker if ________.

• A) the marginal product of the worker is 50 units
• B) the value of the marginal product of the worker is at least $50
• C) the marginal product of the worker is less than 50 units
• D) the value of the marginal product of the worker is less than $50

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Definitions:

Direct Labor Hour

A measure of the labor time directly involved in the production of goods, often used in costing and budgeting.

Standard Quantities

Standard quantities refer to the predetermined amounts of material, labor, and overhead that should be used in the production of a good or service, serving as a basis for cost control and efficiency analysis.

Standard Rates

Predetermined costs or charges used for billing, budgeting, or for setting up baseline expectations for financial performance.

Standard Direct Materials Quantity

The amount of raw materials budgeted to be used in the production of goods, based on efficiency standards.