One Reason Why, in the Short Run, the Marginal Product

question 35

Multiple Choice

One reason why, in the short run, the marginal product of labour might increase initially as more workers are hired is that

• A) the first workers hired get to use the best equipment.
• B) specialisation allows a worker to focus on one task, thereby increasing her proficiency at that task.
• C) the best workers are hired first and later hires are not as skillful.
• D) beyond some point, a firm has hired too many workers.

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Definitions:

Point Estimate

A single value (or point) derived from a sample that serves as the best estimate of an unknown population parameter.

Hourly Wages

Hourly wages are payments made to workers based on the number of hours worked, typically quoted as an amount of money per hour.

Margin Of Error

The ± value added to and subtracted from a point estimate in order to develop an interval estimate of a population parameter.

Confidence

The degree to which one can feel assured or certain about an inference or prediction, often expressed as a percentage.