Which of the Following Describes a Difference Between the Marginal

question 228

Multiple Choice

Which of the following describes a difference between the marginal product of labour and the marginal revenue product of labour?

• A) The marginal product of labour declines as each additional worker is hired because of the law of diminishing returns. The marginal revenue product of labour declines as each additional worker is hired because of diseconomies of scale.
• B) The marginal product of labour declines as each additional worker is hired because of the law of diminishing returns. The marginal revenue product increases as each additional worker is hired because of increases in the productivity of labour.
• C) The marginal product of labour is inelastic. The marginal revenue product of labour is elastic.
• D) The marginal product of labour measures the change in output as additional workers are hired. The marginal revenue product measures the change in revenue as additional workers are hired.

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Definitions:

Manufacturing Overhead

All indirect costs associated with manufacturing, including indirect labor, materials, and other expenses.

Incremental Manufacturing Cost

The additional cost incurred to produce an extra unit of a product.

Contribution Format Income Statement

A format for income statements that divides fixed and variable expenses, emphasizing the margin of contribution.

Traditional Format Income Statement

A type of income statement where expenses are deducted from revenues to calculate net income, typically divided into operating and non-operating sections.