Suppose that a public accounting firm plans to hire some accountants for tax sea

Question

Suppose that a public accounting firm plans to hire some accountants for tax season. What

will happen to the marginal product of labor as the firm hires more and more accountants?

A)

The marginal product of labor will increase because preparing tax returns requires

high levels of education and experience.

B)

The marginal product of labor will increase because completing and filing tax

returns requires team production techniques.

C)

The marginal product of labor will decline because each subsequent accountant that

is hired will be assigned to work on less important (i.e., less lucrative) tax returns.

D)

The marginal product of labor will not change because the practice of accounting is quite standardized, forcing all accountants to follow the uniform procedures set forth in federal tax law

Explanation / Answer

d)

The marginal product of labor will not change because the practice of accounting is quite standardized, forcing all accountants to follow the uniform procedures set forth in federal tax law

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