An Decrease in the Productivity of a Factor of Production

question 80

Multiple Choice

An decrease in the productivity of a factor of production will

• A) shift its marginal revenue product curve to the right.
• B) shift its marginal revenue product curve to the left.
• C) cause a firm to move down the marginal revenue product curve.
• D) cause a firm to move up the marginal revenue product curve.

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Definitions:

Marginal Benefit

The increased benefit or satisfaction experienced from consuming one additional unit of a product or service.

R&D Expenditures

The amount of money a company spends on research and development activities to innovate or improve its products or services.

Interest-Rate Cost-Of-Funds

The expense incurred by borrowers in order to access funds, determined by the interest rate.

R&D Expenditures

Financial investments made towards research and development activities aimed at creating new products, processes, or technologies.