If the Price of Labor Increases,in Order to Minimize the Costs

question 91

Multiple Choice

If the price of labor increases,in order to minimize the costs of producing a given level of output,the firm manager should use:

• A) less of labor and more of capital.
• B) less of labor and less of capital.
• C) more of labor and more of capital.
• D) more of labor and less of capital.

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Definitions:

Accrual Basis of Accounting

An accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Electricity Invoice

A bill issued by an electricity provider detailing the charges for electric consumption over a specific period.

Expense Recognition

An accounting principle that matches expenses with revenues in the period in which the expense is incurred to generate those revenues.

Accrual Basis of Accounting

A financial recording technique that logs income and costs as they are accrued, without considering the actual exchange of cash.