Practice Questions
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Which of the following best describes the relationship between labor productivity and decision-making processes in a firm?
When decisions are made well, workers can do their jobs better and faster. Other options are incorrect because Some might think that just being produc...
How does improving labor productivity contribute to economic growth in a country?
When workers produce more in the same amount of time, the country makes more goods and services. Other options are incorrect because Some might think ...
How does an increase in output per labor hour typically affect a country's GDP?
When workers produce more in each hour, the total value of goods and services goes up. Other options are incorrect because Some might think that more ...
How does technology adoption influence labor productivity in the context of economic growth and efficiency improvement strategies?
When companies use new technology, they can do more work with the same number of workers. Other options are incorrect because Some people think that t...
How does the adoption of new technology influence labor productivity, and what is its subsequent effect on GDP and labor force participation?
When new technology is used, workers can do their jobs faster and better. Other options are incorrect because This answer suggests that technology mak...
What is the primary measure of labor productivity in an economy?
This measure shows how much work is done in a specific time. Other options are incorrect because Some might think that having more jobs means more pro...
Which of the following best describes the relationship between labor productivity and decision-making processes in a firm?
When decisions are made well, workers can be more efficient. Other options are incorrect because Some might think that being more productive means dec...
What does the term 'output per labor hour' most directly measure in the context of labor productivity?
This term shows how much each worker makes in one hour. Other options are incorrect because This option confuses total hours with productivity; This c...
Which of the following statements about the Marginal Revenue Product of Labor (MRPL) are true? Select all that apply.
Other options are incorrect because Some might think MRPL helps decide how many workers to hire; It's a common belief that hiring more workers always ...
Marginal Revenue Product of Labor (MRPL) : Optimal Hiring :: Total Revenue : ?
Total revenue is the money a business makes. Other options are incorrect because Some might think that happy workers lead to success; Market share is ...
A firm notices that hiring a fourth worker increases total revenue by only $100, while the marginal cost of hiring that worker is $150. What should the firm do regarding its labor force?
The firm should keep the current number of workers. Other options are incorrect because Some might think that hiring more workers always helps; People...
Arrange the following steps in the process of determining the optimal number of employees to hire based on the Marginal Revenue Product of Labor (MRPL): A) Calculate the MRPL for each additional worker, B) Compare the MRPL to the wage rate, C) Determine the total productivity output, D) Adjust hiring based on revenue generation.
First, you find out how much extra money each worker brings in by calculating MRPL. Other options are incorrect because This option suggests calculati...
If a firm's Marginal Revenue Product of Labor (MRPL) is less than the wage paid, what should the firm do?
When the extra money made from hiring a worker is less than what you pay them, it's better to have fewer workers. Other options are incorrect because ...
If a firm observes that hiring an additional worker results in a decrease in its overall productivity, what might be the underlying cause of this effect?
When more workers are added, they may get in each other's way. Other options are incorrect because Some might think that if a worker brings in more mo...
A firm is considering hiring an additional worker. It estimates that this worker will generate an additional $300 in revenue, while the cost of hiring this worker is $250. Based on the Marginal Revenue Product of Labor (MRPL), which category does this decision belong to?
The firm will make a profit by hiring the worker. Other options are incorrect because This choice suggests the firm is only trying to reduce costs; Th...
The __________ of Labor (MRPL) measures the additional revenue generated from hiring one more worker, which helps firms optimize their labor costs and productivity.
This term means the extra money a company makes when they hire one more worker. Other options are incorrect because This term refers to all the money ...
A small bakery currently employs four bakers and is considering hiring a fifth. The owner estimates that hiring the fifth baker will increase daily revenue by $200. However, the baker's salary will be $180 per day. Based on the concept of Marginal Revenue Product of Labor (MRPL), what should the owner consider before making the hiring decision?
The extra money from the fifth baker is more than what they will pay. Other options are incorrect because This idea suggests only looking at the salar...
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