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

question 92

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 skilled.
• D) beyond some point, a firm has hired too many workers.

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Definitions:

Cost Distribution

The process of allocating indirect costs across various products, services, or departments within a company.

Support Activity Costs

Costs associated with activities not directly involved in producing goods or services but necessary for the overall operation.

Activity-Based Costing

A method of accounting that identifies and assigns costs to overhead activities and then assigns those costs to products.

Production Department Rates

Rates applied by production departments to allocate costs to products or services, often based on labor hours, machine hours, or other activity bases.