The division of labor and specialization explain
A) why, when the marginal product of labor increases, so does the average product of labor.
B) why the average product of labor falls when firms use more capital or change the layout of their businesses.
C) why the marginal product of labor rises as a firm hires its first units of labor.
D) why firms may find it profitable to use more workers when the marginal product of labor is negative.
Answer: C
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Items counted in U.S. GDP, but excluded from U.S. GNP, are
a. the value of the automobiles produced by a General Motors plant in Spain b. U.S. assets abroad c. income earned by U.S. citizens working in foreign economies d. a Nissan plant's output in Tennessee e. a Foot Locker's sales at its new store in Edmonton, Canada
If the supply of lower-skilled workers exceeds the demand, then average wages in the lower quintiles of the income distribution will:
a. increase. b. decrease. c. require government supplementation. d. equalize.