What is the value of marginal product of labor? What is the formula that can be used to calculate it? How does the value of marginal product affect how much labor a firm hires?
What will be an ideal response?
The value of marginal product of labor tells the additional amount of revenue the firm earns by hiring an extra unit of labor, so it is the value to a firm of hiring one more unit of labor. The value of marginal product equals the price of a unit of output multiplied by the marginal product of labor. The firm maximizes its profit by hiring up to the point where the value of marginal product equals the wage rate.
You might also like to view...
The private sector surplus or deficit equals
A) saving minus investment. B) net taxes minus government purchases. C) investment minus saving. D) government purchases minus net taxes.
Using the Gordon growth model, a stock's current price decreases when
A) the dividend growth rate increases. B) the required return on equity decreases. C) the expected dividend payment increases. D) the growth rate of dividends decreases.
Which of the following is not a difference between monopolies and perfectly competitive markets?
a. Monopolies can earn profits in the long run while perfectly competitive firms break even. b. Monopolies charge a price higher than marginal cost while perfectly competitive firms charge a price equal to marginal cost. c. Monopolies choose to produce the quantity at which marginal revenue equals marginal cost while perfectly competitive firms do not. d. Monopolies face downward sloping demand curves while perfectly competitive firms face horizontal demand curves.
Which of the following government policies is not likely to reduce unemployment?
a) increasing payroll taxes b) making loans to the unemployed who wish to start businesses of their own c) providing retraining subsidies d) offering relocation assistance to the unemployed who find work out of town e) providing publicly funded job placement agencies