If the MPP of an Additional Unit of Labor Is

question 111

Multiple Choice

If the MPP of an additional unit of labor is 3 units per hour,product price is constant at $8 per unit,and the wage rate is $26 per hour,then

• A)The additional unit of labor should be employed.
• B)The additional unit of labor should not be employed because it costs more than it is worth.
• C)The employer should lower wages and accept less employment of labor.
• D)Product price must be reduced if profits are to be made.

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Definitions:

Speculator

An investor who engages in the buying and selling of financial instruments with the aim of profiting from short-term market fluctuations.

Futures Contract

A standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future, typically traded on a futures exchange.

Underlying Asset

A financial asset upon which a derivative's price is based, such as stocks, bonds, commodities, or currencies.

Leverage

The use of borrowed funds to enhance the potential return of an investment.