Explain why an employer in a perfectly competitive market will hire more workers when the marginal revenue product is greater than the wage
What will be an ideal response?
The marginal revenue product represents the value of hiring the worker to the firm. It is the additional revenue that the firm gains from hiring the worker. If the gain is greater than the cost of hiring the worker (which is the wage in a competitive labor market), the firm will increase its profits by hiring the additional worker.
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A decrease in the number of firms in a market will cause supply to increase
Indicate whether the statement is true or false
Assume a simple macroeconomic model. When inventories rise unexpectedly,
a. income is above its equilibrium value. b. income will rise until it reaches its equilibrium value. c. total spending is higher than total output. d. All of the above.
The first year of his catering business, Zander was busy both days every weekend working special events. The second year, he raised his rates and was able to take one Sunday off a month. Which of the following describes his labor supply curve?
a. U-shaped b. upward sloping c. downward sloping d. backward bending
Exchange rates affect:
I. international trade flows. II. international investment flows. III. corporate earnings. a. I b. II and III c. I and II d. I, II, and III