Assume That a Competitive Firm Sells Its Product for $5

question 91

Multiple Choice

Assume that a competitive firm sells its product for $5 per unit.The firm wants to increase the number of workers employed from 100 to 101 and expects output to rise from 400 units to 410 units.The firm pays a constant wage of $8 per hour to all of its workers.Based on the given information,the marginal value product of the 101st worker is _____.

• A)$5
• B)$10
• C)$50
• D)$80

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Definitions:

Activity Level

A factor that measures the amount of production or work accomplished, often used in cost accounting to determine costs based on different levels of operation.

Activity Variance

A metric used in cost accounting to measure the difference between planned activity and actual activity, often analyzed to improve budgeting and control processes.

Direct Labor

The labor costs that can be directly traced to the production of specific goods or services.

Activity Level

Activity level refers to the volume of production or operations within a specific period, influencing costs and budgeting in cost accounting.