As a Firm Hires More Labor in the Short Run

question 53

Multiple Choice

As a firm hires more labor in the short run, the

• A)level of total product stays constant.
• B)output per worker rises.
• C)extra output of another worker may rise at first, but eventually must fall.
• D)costs of production are increasing at a fixed rate per unit of output.

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Definitions:

Indirect Business Taxes

Taxes levied on goods and services rather than on income or profits, such as sales tax, often passed on to the consumer.

Rent

The payment made by a tenant to a landlord for the use of a property, room, or apartment for a specified period.

Depreciation

Accounting method of allocating the cost of a tangible or physical asset over its useful life, reflecting wear and use over time.

Indirect Business Taxes

Taxes levied on goods and services rather than on income or profits, such as sales tax or value-added tax, ultimately passed on to consumers in the form of higher prices.