The profit-maximizing firm should lay off workers when:
a. MRC < MRP
b. MRC > MRP.
c. MRC = MRP.
d. the MP of labor begins to diminish.
b
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Joe's increase in wages has been identical to the increase in the price level. Joe thinks that he is better off and has increased his expenditures. Joe's behavior is consistent with
A) the classical model. B) Say's law. C) money illusion. D) a vertical aggregate supply curve.
If the opportunity cost of production rises as more of a good is produced,
a. the terms of trade will be independent of opportunity costs b. the production possibilities curve will be a straight line c. a country will specialize in producing only those goods in which it has a comparative advantage d. a country should produce any good in which it has an absolute advantage e. a country may not specialize completely in the goods in which it has comparative advantage
Law of Demand
What will be an ideal response?
Using a production possibilities curve, a technological advance that increases the amount of output for both goods while using the same amount of inputs would be illustrated by which of the following?
What will be an ideal response?