As More Workers Are Hired, the Marginal Physical Product of Labor

question 334

Multiple Choice

As more workers are hired, the marginal physical product of labor eventually declines because

• A) less efficient workers are hired as the number of workers increases.
• B) workers do not work well together when the number of workers increases.
• C) the amount of capital each worker has to work with declines as the number of workers increases.
• D) of diseconomies of scale.

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Definitions:

Machine-Hours

A measure of production time, quantified in hours, that machinery is operating to perform work.

Machining Department

A specialized division within a manufacturing operation that performs machining processes, such as cutting, shaping, or drilling materials.

Finishing Department

The last department in a manufacturing process where products are completed and made ready for sale.

Predetermined Overhead Rate

An estimated charge per unit of activity used to allocate manufacturing overhead costs to products, calculated before the accounting period begins.