The marginal revenue product of labor is equal to
A. The change in total output divided by the change in the quantity of labor.
B. The marginal physical product multiplied by the price.
C. The change in the quantity of labor divided by the change in total revenue.
D. The percentage change in total revenue divided by the percentage change in the quantity of labor.
Answer: B
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Labor productivity is computed as
A) real GDP divided by population. B) real GDP divided by the number of workers. C) per capita real GDP divided by the number of workers. D) per capita real GDP divided by population.
Answer the following questions true (T) or false (F)
1. In the short run, a firm that incurs losses might choose to produce rather than shut down if the amount of its revenue is less than its fixed cost. 2. If a firm shuts down in the short run, it avoids its variable cost but not its fixed cost. 3. If a firm shuts down in the short run, its maximum loss equals the amount of its fixed cost.