A firm should hire more workers to increase its profits if
A) the marginal product of labor is greater than the wage the firm will pay these workers.
B) there is enough capital and other resources for the workers to use.
C) the demand for labor is elastic.
D) the wage rate is less than the marginal revenue product of labor.
D
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Suppose there are four firms in a market and each of them sell differentiated products. Does it make sense for these firms to engage in a price war? Why or why not?
What will be an ideal response?
The stronger that consumer demand is for a good or service, other things being equal,
a. the higher its price. b. the lower its price. c. the more stable its price. d. the less stable its price.
If workers push for wages that are beyond what productivity gains can justify ________
A) a temporary negative supply shock ensues driving up prices B) a negative output gap ensues which will lead to higher unemployment if the Federal Reserve does not act C) and the Federal Reserve eases monetary policy aimed at increasing aggregate demand to counter the negative supply shock, a price-wage spiral could ensue D) all of the above E) none of the above
If the CPI was 68 in 1965 and is 285 today, then $100 today purchases the same amount of goods and services as
a. $23.86 purchased in 1965. b. $32.47 purchased in 1965. c. $68.00 purchased in 1965. d. $419.12 purchased in 1965.