Managerial Economicsbasic
The marginal value product of labor is the total revenue earned by the entire firm.
Answer
false
Explanation
### Why this is right
Marginal value product is the additional income generated by one additional unit of labor, not the firm's total revenue. The word marginal signals that the measure concerns the added effect of one more worker.
### The concept
Total revenue concerns all sales income, while marginal value product isolates the extra income attributable to an additional labor unit. The wage is compared with this added income to guide hiring.
### The other options
- **The statement is false**: It confuses an additional contribution with a firm-wide total.
### Terms
- **Total revenue**: Income from all sales over the relevant period.
### Remember
Marginal means the change caused by adding one more unit.
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