For a Firm That Is a Price Taker in the Market

question 218

Multiple Choice

For a firm that is a price taker in the market for labor, the marginal revenue product of labor equals the

• A)marginal product of labor multiplied by the wage rate.
• B)marginal product of labor multiplied by the product price.
• C)marginal product of labor divided by the wage rate.
• D)marginal product of labor multiplied by the marginal cost of production.

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Definitions:

Marginal Cost

The rise in cost due to the production of an extra unit of a product or service.

Marginal Benefit

Marginal benefit refers to the extra benefit received from the consumption or use of an additional unit of a good or service.

R&D Spending

R&D Spending refers to the money allocated by businesses or governments towards research and development of new products or services.

Interest-Rate Cost-Of-Funds

The interest rate that banks and other financial institutions charge each other for loans, often used as a benchmark for other interest rates.