Marginal Revenue Product

Question 1 of 11

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What is derived demand?

Select one of the following:

  • Demand for one item depending upon the demand for another item.

  • Demand for one item depending upon the cost of another item.

  • Demand for one item depending upon the quantity of another item.

  • Demand for one item depending upon the supply of another item.

Question 2 of 11

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The determinants of demand are what?

Select one of the following:

  • Productivity; Marginal Output; Complementary Labour Costs; Wages; Demand For Product Being Made; Subsidies (PMC LWDS)

  • Productivity; Wages; Complimentary Labour Costs; Price of Other FOPs; Demand For Product Being Made (PWC PD)

  • Marginal Revenue; Complementary Labour Costs; Wages; Demand For Product Being Made (MCL WD)

Question 3 of 11

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What does 'Marginal Revenue Product' actually mean?

Select one of the following:

  • The change in output that results from employing one more worker.

  • The change in a firm's revenue from employing additional labour.

  • The change in a firm's revenue from employing one additional unit of labour.

  • The change in output that results from purchasing additional capital equipment.

Question 4 of 11

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The quantity of labour employed in a production process will be determined at the point where:

Select one of the following:

  • The marginal revenue product is larger than the marginal cost of labour.

  • The marginal revenue product is larger than the average revenue.

  • The marginal revenue product is less than the average cost.

  • The marginal revenue product is equal to the marginal cost of labour.

Question 5 of 11

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Marginal Revenue Product is formed by multiplying what?

Select one of the following:

  • Average revenue with marginal labour cost.

  • Total revenue with total output.

  • Marginal product and marginal revenue.

  • Marginal cost and total labour costs.

Question 6 of 11

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In a perfectly competitive market, marginal revenue will equal what?

Select one of the following:

  • Average cost

  • Price

  • Average revenue

Question 7 of 11

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Under monopolistic competition, oligopoly and monopoly, what does marginal revenue product do?

Select one of the following:

  • Marginal product increases with output.

  • Marginal product remains the same with output.

  • Marginal product decreases with output.

Question 8 of 11

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If the wage rate is to increase, what will occur on the marginal revenue product diagram?

Select one of the following:

  • The marginal revenue product curve will shift to the right.

  • The marginal cost of labour curve will move to the left.

  • The marginal cost of labour curve will move upwards.

  • The marginal revenue product curve will shift downwards.

Question 9 of 11

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Why is it difficult to measure marginal revenue product?

Select one or more of the following:

  • Because few companies employ exactly the right number of workers.

  • Because it is difficult to gauge the respective contribution each worker makes to overall output.

  • Because each worker has access to different levels of capital, meaning their output is different.

  • At may come down to value judgements as some products cannot be quantitatively measured.

Question 10 of 11

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Marginal Revenue Product theory assumes what?

Select one of the following:

  • Fixed factors of production apart from labour; Labour market is perfectly competitive; Homogeneous labour units; Product market is perfectly competitive; Wage takers (firms) - (FLH PW)

  • Fixed factors of production apart from labour; Labour market is perfectly competitive; Labour units are all paid the same; Product market is perfectly competitive; Wage takers (firms) - (FLL PF)

  • Fixed factors of production apart from labour; Product market is perfectly competitive; Homogeneous labour units; Wage takers (firms); Marginal revenue is equal to marginal cost of labour - (FPH WM)

Question 11 of 11

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Define 'Law of Diminishing Marginal Returns'

Select one of the following:

  • A decrease in the marginal (per-unit) output of a production process as the amount of a single factor of production is increased

  • An decrease in the marginal (per-unit) output of a production process as the amount of labour is increased

  • An increase, then a decrease in the marginal (per-unit) output of a production process as the amount of a single factor of production is increased

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Marginal Revenue Product

Glenn Christmas
Quiz by , created about 3 years ago

Quiz on Marginal Revenue Product, created by Glenn Christmas on 09/11/2013.

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Glenn Christmas
Created by Glenn Christmas about 3 years ago
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