When the MPP of Labor Is Zero, Ceteris Paribus

question 88

Multiple Choice

When the MPP of labor is zero, ceteris paribus,

• A) Employment can be increased only by offering a higher wage rate.
• B) No further increases in output can be achieved by using additional units of labor.
• C) MRP is at a maximum.
• D) Additional units of labor must be employed because other factors of production are being wasted. Marginal physical product (MPP) is equal to the change in total output associated with one additional unit of input. If the MPP is zero, the last worker hired does not contribute any additional output.

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Definitions:

Motivation

A psychological force that compels individuals to act toward the achievement of goals.

Attractiveness

The qualities or features of an entity that make it appealing or desirable to others.

Predetermined Wage Grades

An established set of salary levels defined before recruitment, often based on job analysis, to classify positions according to value and responsibility.

Job Classification System

A method of evaluating and categorizing positions within an organization based on duties, responsibilities, and the level of expertise required, often used to determine salary ranges.