In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
In the figure,
D: Demand curve for automobiles
S 1 : Supply curve of automobiles prior to regulation
S 2 : Supply curve of automobiles after regulation
FG: Clean up cost per unit
-The marginal revenue product (MRP) is the:
A)value of the additional output that an extra unit of a resource can produce.
B)cost of hiring an additional unit of a resource.
C)extra cost of producing an additional unit of output.
D)increase in total output when an additional unit of an input is hired.
E)change in total revenue when an additional unit of a good is sold.

Question

In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
  In the figure,
D: Demand curve for automobiles
S 1 : Supply curve of automobiles prior to regulation
S 2 : Supply curve of automobiles after regulation
FG: Clean up cost per unit
-The marginal revenue product (MRP) is the:
A)value of the additional output that an extra unit of a resource can produce. 
B)cost of hiring an additional unit of a resource. 
C)extra cost of producing an additional unit of output. 
D)increase in total output when an additional unit of an input is hired. 
E)change in total revenue when an additional unit of a good is sold.

Quizplus · Accepted Answer

MRP is the additional output that an extra unit of a resource can produce. It is the change in total output that occurs when one additional unit of an input is hired. Therefore, the correct choice is A)value of the additional output that an extra unit of a resource can produce.

In the Following Figure, the First Panel Shows a Market