Graph 18-1 This Graph Represents the Value of Marginal

question 45

Multiple Choice

Graph 18-1 This graph represents the value of marginal product for a firm that sells its product in a competitive market.Use the graph to answer the following question(s) .
-Refer to Graph 18-1.If a firm was operating at a level of output above Q*, decreasing the amount of labour would do which of the following?
(i) raise profit
(ii) possibly lower revenue
(iii) increase the marginal product of labour

• A)(i) and (ii)
• B)(ii) and (iii)
• C)(i) and (iii)
• D)(i), (ii) and (iii)

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Definitions:

Market Rate

The prevailing interest rate available in the marketplace for instruments of similar risk and maturity.

Down Payment

An initial payment made when something is bought on credit.

Successful-efforts Method

An accounting method used in the oil and gas industry where costs are capitalized only if successful discoveries are made.

Full-cost Method

Accounting practice where all direct and indirect fixed and variable costs are allocated to inventory until the products are sold.