Payment of Overtime to a Worker in Order to Relax

question 339

True/False

Payment of overtime to a worker in order to relax a production constraint could increase the profits of a company.

---

Definitions:

Marginal Productivity

The increase in output resulting from a one-unit increase in the input of a particular resource, while holding inputs of all other resources constant.

Output Constant

A fixed amount of production that does not change with the levels of input.

Isocost Line

A graph representing all combinations of inputs which cost the same total amount.

Price of Capital

The cost of borrowing money or the return that is required for an investment in equipment or buildings.