The Additional Revenue Obtained by a Firm When It Hires

question 147

Multiple Choice

The additional revenue obtained by a firm when it hires an additional worker, holding other inputs constant, is

• A) the marginal physical product of labor.
• B) the marginal revenue product of labor.
• C) the marginal cost of labor.
• D) equal to total revenue divided by the number of workers.

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Definitions:

Absolute Advantage

The ability of an individual, firm, or country to produce more of a good or service than competitors using the same amount of resources.

Shoemaking

is the craft or industry involved in the design, production, and repair of shoes, including both traditional techniques and modern manufacturing.

Opportunity Cost

Opportunity cost represents the value of the best alternative that is foregone when making a choice, highlighting the trade-offs involved in any decision.

Loads of Laundry

Quantity of laundry being washed and dried in a single operation or cycle.