Discuss whether or not a competitive, profit-maximizing firm would ever cease hiring workers if the marginal product of the next worker is higher than that of the last worker hired (that is, the firm is on the increasing portion of its marginal product curve).
What will be an ideal response?
The firm makes its hiring decision about the “marginal worker” comparing the revenues brought in from the worker’s production to the cost of the worker (i.e. by comparing the worker’s marginal revenue product to the worker’s wage rate). A competitive, profit-maximizing firm would never choose to cease hiring when marginal product is rising since hiring an additional worker would increase the revenues a worker brings in while the cost of a worker would remain the same. That is, if it was profitable to bring in the last worker, it will be even more profitable to bring in the next worker.
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Because loans to small and midsized businesses are rather __________, they have been relatively __________ to securitize
A) standardized; easy B) standardized; difficult C) not standardized; easy D) not standardized; difficult
Within the U.S. population, women of prime working age (ages 25-54) have similar rates of labor-force participation than men of prime working age (ages 25-54), regardless of race
a. True b. False Indicate whether the statement is true or false
Use the following graph to answer the next question.
A firm that has the long-run cost curves shown in the graph above would not be able to ________.
A. exploit economies of scale B. serve an increasing share of the market at lower and lower unit costs C. attain lower unit costs by reducing its output level D. have an entry barrier protecting it from new entrants into the market
Natural rate of unemployment is the normal rate of unemployment toward which the economy gravitates.
Answer the following statement true (T) or false (F)