A firm currently has 5 workers each paid $15 per hour. If it decides to hire a 6th worker, the hourly wage increases to $18 for all workers. The 6th worker is expected to contribute to around $40 worth of output. Based on this information, the firm should
a. Hire the 6th worker since MR>MC
b. Not hire the 6th worker since MR>MC
c. Not hire the workers since MR
a
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What will be an ideal response?
Normative analysis offers decision makers the most valuable information when choosing among alternatives
Indicate whether the statement is true or false
The principle of diminishing marginal product states:
A. the total output produced increases as the quantity of the input increases. B. the marginal product of an input decreases as the quantity of the input increases. C. the marginal product of an input eventually will be negative. D. the total output produced decreases as the quantity of the input increases.
Economist Milton Friedman is most closely associated with:
A. Keynesian economics. B. the rational expectations theory. C. supply-side economics. D. monetarism.