It is profitable to hire units of labor as long as the value of marginal product:
A. equals price.
B. is less than wage.
C. exceeds wage.
D. exceeds average product.
Answer: C
You might also like to view...
If Ann's utility function is U = 3W0.5, and she invests in a business which can yield $6,400 with probability 1/5, and $3600 with probability 4/5, then her Arrow-Pratt measure of risk aversion is
A) 0.5/w. B) 1/w. C) 1.5w. D) 3/w.
An economy that has a private sector and a public sector is called a ______________.
Fill in the blank(s) with the appropriate word(s).
The production function for a competitive firm is Q = K.5L.5. The firm sells its output at a price of $10, and can hire labor at a wage of $5. Capital is fixed at one unit and costs $2. The maximum profits are:
A. 10. B. 3. C. 15. D. None of the answers are correct.
Which of the following would NOT be a reason for a shift in the labor demand curve?
A. a change in labor productivity B. a change in the price of a related input C. a change in demand for the final product D. a change in the market wage rate