The Difference Between the Marginal Product of Labour and the Marginal

question 223

Multiple Choice

The difference between the marginal product of labour and the marginal revenue product of labour is

• A)The marginal product of labour declines as each additional worker is hired because of the law of diminishing returns.The marginal revenue product of labour declines as each additional worker is hired because of diseconomies of scale.
• B)The marginal product of labour declines as each additional worker is hired because of the law of diminishing returns.The marginal revenue product increases as each additional worker is hired because of increases in the productivity of labour.
• C)The marginal product of labour is inelastic.The marginal revenue product of labour is elastic.
• D)The marginal product of labour measures the change in output as additional workers are hired.The marginal revenue product measures the change in revenue as additional workers are hired.

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Definitions:

Investment Project

A project involving the commitment of resources with the expectation of generating future returns or benefits.

Market Price

This term refers to the actual selling price of goods or services in the marketplace at any given time.

Future Net Earnings

The projected amount of money that a company is expected to earn in the future after all expenses and taxes have been deducted.

Business Asset

Resources owned by a company that have economic value and can contribute to future profits.