The Marginal Revenue Product of a Resource

question 132

Multiple Choice

The marginal revenue product of a resource

• A) is defined as the marginal product of the resource multiplied by the resource price.
• B) simply means that a firm should add to its capital stock as long as competition requires it.
• C) equals the extra output produced by an additional unit of the resource multiplied by the marginal revenue per unit of that output.
• D) equals the average product of the resource multiplied by the cost of hiring an additional (marginal) unit of the resource.

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Definitions:

Savings

The portion of income not spent on current consumption but kept aside for future use or investment.

Executive Compensation

Refers to the total package of pay and benefits offered to an organization's top executives, including salaries, bonuses, stock options, and other financial rewards.

Real Wage

The purchasing power of wages, considering the effects of inflation; the amount of goods and services that can be bought with the wages.

Natural Capital

The world's stocks of natural assets which include geology, soil, air, water, and all living things.