The Following Table Shows Total Output Produced by Different Units

question 99

Multiple Choice

The following table shows total output produced by different units of capital.Table 14.3
The marginal revenue product of a resource is the product of the marginal product of the resource and the marginal revenue.
-The producer can raise the level of profit by hiring more units of a resource if:

• A)the marginal revenue product of the resource is equal to the marginal factor cost.
• B)the marginal factor cost becomes negative.
• C)the marginal revenue product of the resource is greater than the marginal factor cost.
• D)the marginal revenue product falls to zero.
• E)the marginal revenue product of the resource is less than the marginal factor cost.

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Definitions:

Ordinary Maintenance

Routine maintenance and repairs necessary to keep an asset in working condition, not significantly prolonging its life or increasing its value.

Replacing Engine

The process of removing a damaged or nonfunctional engine from a vehicle or machine and installing a new or refurbished one.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear, and tear or obsolescence.

Fixed Assets

Tangible assets purchased for long-term use and not likely sold in the normal course of business, such as buildings, machinery, and equipment.