Which of the Following Statements Is Correct

question 482

Multiple Choice

Which of the following statements is correct?

• A)The market for capital is unlike the market for labor because the rental price of capital is unaffected by the marginal product of capital, whereas the price of labor is affected by the marginal product of labor.
• B)The market for capital is unlike the market for labor because the purchase price of capital is unaffected by the marginal product of capital, whereas the price of labor is affected by the marginal product of labor.
• C)The market for capital is like the market for labor because the rental price of capital is affected by the marginal product of capital, and the price of labor is affected by the marginal product of labor.
• D)Both a and b are correct.

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Definitions:

Standard Labor Hours

Refer to the predetermined amount of time expected to be spent to complete a task under normal conditions.

Direct Labor Rate Variance

The difference between the actual labor rate paid to workers and the standard labor rate, multiplied by the total hours worked.

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing a product or delivering a service.

Actual Rate

The current interest rate or the actual cost rate in various financial and business contexts.