"As the quantity of labor hired increases, the value of marginal product stays constant as long as the wage rate is constant for all workers." Is the previous statement correct or incorrect? Explain your answer

What will be an ideal response?


The statement is incorrect. The value of marginal product equals the price of a unit of output multiplied by the marginal product. As more workers are employed, the marginal product decreases, so the value of marginal product decreases.

Economics

You might also like to view...

The U.S. economy is relatively open in terms of economic activity related to international trade.

Answer the following statement true (T) or false (F)

Economics

A person who organizes and assumes the risks of a business venture is called a(n)

a. capitalist. b. manager. c. labor leader. d. entrepreneur.

Economics

To eliminate built-in inflation from the economy, the Fed must

a. announce its intention to have a single policy objective b. create a recession c. maintain a constant rate of inflation d. resist the temptation to change its interest rate targets e. work closely with Congress and the President

Economics

Harvard University admits a larger percentage of applicants than does India's Indian Institute of Technology

Indicate whether the statement is true or false

Economics