Which of the Following Statements Regarding Comparisons of Productivity Across

question 37

Multiple Choice

Which of the following statements regarding comparisons of productivity across two firms is true?

• A) The firm with the higher AP_L is the more productive firm.
• B) The firm with the higher MP_L is the more productive firm.
• C) The firm with the lower MP_L is the more productive firm.
• D) The average product of labor can vary with the choice of inputs and the level of outputs, so the firm with the higher AP_L may not be the most productive.

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Definitions:

Utils Per Dollar

A hypothetical measurement of the utility or satisfaction a consumer gains from spending one dollar on a good or service.

Risk-Averse

Characteristic of preferring to avoid risk, leading to preference for safer, more certain outcomes over riskier ones.

Marginal Utility

The additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.

Expected Value

The anticipated value or return of a variable, taking into account all possible outcomes and their probabilities.