Let MP = Marginal Product, P = Output Price, and W

question 161

Multiple Choice

Let MP = marginal product, P = output price, and W = wage, then the equation that represents the condition where a competitive firm would hire another worker is

• A)P × MP = W.
• B)P × MP < W.
• C)P × MP > W.
• D)P × W > MP.

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Definitions:

Cost Object

Any item for which a separate measurement of costs is desired, such as a product, service, project, or department.

Just-in-Time Manufacturing

A production methodology aimed at reducing flow times within production systems as well as response times from suppliers and to customers, by receiving goods only as they are needed in the production process.

Inventory

A complete list of items such as property, goods in stock, or the contents of a building.

Product Costs

Costs that are directly associated with the production of goods, including direct materials, direct labor, and manufacturing overhead.