Explain how businesses decide how much labor to hire in order to produce a certain level of output
What will be an ideal response?
Owners have to consider how the number of workers they hire will affect their total production. They have to determine if hiring more workers is cost efficient and in the end increases or decreases the revenue.
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What costs associated with the new miles-per-gallon requirements arise from decisions made in self-interest and in the social interest?
What will be an ideal response?
A profit-maximizing firm in a competitive market will continue to hire more workers when
A. the marginal factor cost is less than the marginal revenue product of the additional workers. B. the marginal factor cost is less than zero. C. the marginal factor cost equals the marginal revenue product of the additional workers. D. the marginal factor cost exceeds the marginal revenue product of the additional workers.
The Standard Oil trust
A. behaved "badly" according to the Supreme Court. B. was broken up in 1890. C. was forced by the Supreme Court to give payments on every shipment of oil it refined to its rivals. D. was a multinational corporation.
If a firm shuts down in the short run, it will:
A. incur losses equal to its fixed costs. B. have total revenue greater than total fixed costs. C. reduce its losses to zero. D. do this because P > AVC.