The Marginal Productivity of Labor Will Eventually Decrease as More

question 145

Multiple Choice

The marginal productivity of labor will eventually decrease as more workers are employed because

• A) average product is increasing.
• B) total product is decreasing.
• C) the amount of capital will also be increasing.
• D) on the average each worker will have fewer inputs to work with.

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Definitions:

Impairment

Reduction in the recoverable value of an asset below its carrying amount.

Recoverable Amount

The higher value between an asset's fair market value less costs to sell and its value in use.

AASB 136

The Australian Accounting Standards Board standard that deals with impairment of assets, requiring assets to be carried at no more than their recoverable amount.

Value In Use

The present value of the future cash flows expected to be derived from an asset, used in impairment testing.