The competitive firm's profit-maximizing quantity of labor is the quantity where the:
A. value of the marginal product of labor is equal to the profit.
B. quantity of the marginal product of labor is equal to the market wage.
C. quantity of the marginal product of labor is equal to zero.
D. value of the marginal product of labor is equal to the market wage.
Answer: D
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Import substitution industrialization in Latin America
A) relied on increased exports. B) provided subsidies for exports. C) shifted the bulk of exports away from primary commodities. D) created disincentives to export. E) Answers A and C are correct.
According to the party cycle theory, recessions
a. will be nonexistent in the near future. b. are most apt to occur when a liberal president is elected. c. are most likely to occur during the first couple of years following the election of a conservative president. d. are here to stay.
One major element of the command system is:
A. An emphasis on private ownership of resources B. Individual decentralized decision-making C. Reliance on supply-and-demand forces to guide economic activity D. Central planning conducted by the government
The River Rouge plant was built by the Ford Motor Company in the 1920s to produce the company's Model A car. Which of the following is evidence that the River Rouge plant suffered from diseconomies of scale?
A) Despite an expensive advertising campaign the Model A did not earn the company a profit. B) Model A cars made at the River Rouge plant failed to earn Ford a profit. Ford eventually constructed smaller plants to make the Model A at a lower average cost. C) Model A cars made at the River Rouge plant failed to earn a profit. Ford reduced the average cost of the Model A by cutting its employees' wages. D) Model A cars made at the River Rouge plant failed to earn a profit because the price of steel used to manufacture the Model A rose when workers in the steel industry went on strike.