Graph 18-2 -Refer to Graph 18-2.If the Marginal Product of Labour Falls

question 31

Multiple Choice

Graph 18-2
-Refer to Graph 18-2.If the marginal product of labour falls, which of the following will occur?
(i) the value of the marginal product of labour will fall
(ii) the quantity of labour demanded will fall below L₁
(iii) the supply curve will remain unchanged

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

---

Definitions:

Annual Coupon

The yearly interest payment made to bondholders, typically expressed as a percentage of the face value.

Bankruptcy Claims

Rights to payment held by creditors from a company undergoing bankruptcy proceedings.

Debt/equity Ratio

The proportionality ratio of debt to equity in the context of funding a company's assets.

Optimal Capital Structure

The best mix of debt, equity, and other financial instruments that maximizes a company's value while minimizing its cost of capital.