If the marginal product of labor is always positive, the total revenue will grow with each additional worker. Firms do not continuously hire new workers because:
a. there isn't enough room in the factory.
b. there isn't an infinite number of workers.
c. wages would have to increase.
d. they stop when MRP = wage
e. marginal revenue product will become negative.
d
You might also like to view...
Many economists are critical of proposals to pass comparable worth legislation. Which of the following is the best explanation for this criticism?
A) Proposals for comparable worth legislation assume that wages for low-paying women's jobs should include compensating differentials. Economists believe that compensating differentials should be part of the wages for all jobs held by women. B) Proposals for comparable worth legislation call for increases in the wages of jobs held predominantly by women. Economists believe that this legislation should be used to increase the wages of all workers. C) Many economists believe that allowing markets to determine wages, rather than the rules required by comparable worth legislation, results in more efficient outcomes. D) Comparable worth legislation will only lead to efficient market outcomes if women in low-paying jobs suffer from cognitive dissonance.
When applied to committees, the median voter model concludes that _____
a. becomes irrelevant as committees will be unable to select a clear outcome b. the committee selects the outcome preferred by the median voter c. when preferences are double peaked, the committee meets the demand of the median voter d. a cyclical majority will emerge, if voters are irrational
Explain why contracts are beneficial to markets.
What will be an ideal response?
The four main tools of monetary policy are:
A. tax rate changes, the discount rate, open-market operations, and the federal funds rate. B. tax rate changes, changes in government expenditures, open-market operations, and interest on reserves. C. the discount rate, the reserve ratio, interest on reserves, and open-market operations. D. changes in government expenditures, the reserve ratio, the federal funds rate, and the discount rate.