A consultant interviews the hiring manager of a small, profit-maximizing firm. The manager explains that the firm used to have 15 employees, but the most-recently-hired employee has just left the company. The firm is currently advertising to hire a worker to replace the employee who just left at the same wage rate. We can infer that
a. for the 15th employee, the wage exceeded the value of the marginal product of labor.
b. for the 15th employee, the value of the marginal product of labor exceeded the wage.
c. the firm is too large and should remain at 14 employees.
d. the firm is no longer attempting to maximize profits.
b
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The number of people who have gray hair is very high among residents living in Florida. A student concludes that living in Florida causes hair to turn gray. What is the flaw in this student's reasoning?
A) The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents. B) The student has failed to take into account other causes of gray hair. C) The student is using an inadequate sample size. D) The student is drawing a false conclusion; he is confusing cause and effect.
The predominate organizational form for U.S. hospitals is not-for-profit. Why?
a. The profit motive corrupts human behavior. b. For-profit hospitals do not provide charity care. c. Private not-for-profit hospitals engage in most of the medical research. d. The not-for-profit form provides the most benefits to physicians. e. All of the above.
Which of the following would contribute, directly or indirectly, to a deficit in the capital account of the U.S. balance of payments?
a. A British citizen buys stock in Ford. b. A British citizen buys a bond from Ford. c. Interest rates fall in the United States relative to their level in the rest of the world. d. Australian publisher Rupert Murdoch buys The New York Times. e. Developing countries become more stable and so borrow less from U.S. banks.
Which of the following is NOT illustrated by a production possibility curve?
a. scarcity b. opportunity cost c. necessity for choice d. price