If the Marginal Product of the Second Worker Hired by a Firm

question 37

Multiple Choice

If the marginal product of the second worker hired by a firm is 14 units and the price of the tenth unit of output is $7, then the marginal revenue product

• A)of the second worker is $98, regardless of the structure of the product market
• B)of the second worker is $98 if the firm is a price searcher in the product market
• C)of the second worker is $98 if the product market is perfectly competitive
• D)of the tenth worker is $98 if the product market is perfectly competitive
• E)of the tenth worker is $98 if the firm is a price searcher in the product market

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Definitions:

Financial Leverage

The use of borrowed funds to finance investments, aiming to increase the potential return to equity holders.

Business Risk

The exposure a company or investor faces from uncertainties that may impact its operations and profitability.

Financial Risk

The possibility of losing money or financial assets due to factors affecting financial markets, investment decisions, or company performance.

Weighted Average Cost

Reflects the average cost per unit of inventory, factoring in all costs of items purchased at various prices.