If the Cost to Firms of Reducing Workplace Injuries by 1

question 45

Multiple Choice

If the cost to firms of reducing workplace injuries by 1 percent is $1,000 a year for each worker, then it is efficient for firms to reduce workplace injuries by 1 percent if:

• A)the value workers place on the reduction in workplace injuries is less than $1,000 per year.
• B)the value workers place on the reduction in workplace injuries is at least $1,000 per year.
• C)firms are earning an economic profit of at least $1,000 per year.
• D)firms are earning an economic profit of less than $1,000 per year.

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Definitions:

Total Cost Curve

A graph that shows the total cost incurred by a firm in the production of goods or services at different levels of output.

Diminishing Returns

The principle stating that if one factor of production is increased while others remain constant, the overall returns will eventually decrease after a certain point.

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good changes as the production volume varies.

Total Product

The overall quantity of output that a firm produces, typically measured within a specific time period under given levels of input.