One Reason Why, in the Short Run, the Marginal Product

question 122

Multiple Choice

One reason why, in the short run, the marginal product of labor might increase initially as more workers are hired is that

• A)the first workers hired get to use the best equipment.
• B)specialization allows a worker to focus on one task, thereby increasing her proficiency at that task.
• C)the best workers are hired first and later hires are not as skillful.
• D)beyond some point, a firm has hired too many workers.

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Definitions:

New Prices

The latest prices for goods or services, updated from previous values due to factors such as inflation, demand, or production costs.

Utility Function

A representation of a consumer's preference ranking over a set of goods and services, quantifying the satisfaction from each possible choice.

Reservation Price

This is another term for reserve price, meaning the lowest price at which someone is willing to sell a good or service.

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An electronic device used for recording sound on magnetic tape and usually capable of playback.