If a firm hires a worker by paying him a wage lower than his value of marginal product, ________
A) firing the worker will increase the firm's profits
B) the firm is making an optimum decision
C) the firm should hire more workers to increase profits
D) profits of the firm are minimized
C
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In the events of the housing bubble collapsing, once the housing prices stopped increasing refinancing:
A. was no longer an option, and a wave of foreclosures occurred. B. no longer allowed people to borrow cash on the new value of their home, and spending slowed. C. became less popular, and people's consumption overall dropped. D. became more popular, and people's consumption accelerated overall.
To say that a price floor is binding is to say that the price floor a. results in a shortage
b. is set below the equilibrium price. c. causes quantity supplied to exceed quantity demanded. d. All of the above are correct.
In a very basic principal-agent model, output is contractible if:
A. the employee works in a team. B. the employee produces many products. C. output can be observed with some positive cost. D. the employee produces a single output.
Consumption, as a component of GDP:
A. includes nondurable goods only. B. measures spending on goods and services by individuals and households. C. measures spending only on goods, not services, by private individuals and households. D. includes durable goods only.