What does the marginal revenue product of labor represent?

Multiple choice question for Income Inequality. Select an option, then review the explanation below.

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The marginal output of capital multiplied by the wage rate.The extra income a company gains from hiring an additional worker.The extra profit a business obtains by adding one more labor unit.The extra revenue a company generates by selling one unit of labor.

Explanation

Option D states that the marginal revenue product of labor is the additional revenue a firm receives from selling one unit of labor, which correctly defines its meaning. Other options confuse labor with capital or profit rather than revenue.

Practice related questions from the same subject.

1.Which of the following best describes the Benazir Benefit Income Scheme?
2.Which category of tax does VAT best represent?
3.When a tax can be transferred, what determines the actual burden of the tax?
4.What does tax incidence refer to?
5.What does a progressive income tax system imply about the tax rate for individuals with higher earnings?

What does the marginal revenue product of labor represent?

Explanation

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