Explain how a firm values the contribution of workers to its profitability. Would a profit-maximizing competitive firm ever stop increasing employment as long as marginal product is rising? Explain your answer
A firm values the contribution of a worker by evaluating the worker's individual contribution to firm revenue. This is done by multiplying the worker's marginal product by the output price received for his production. A profit-maximizing firm would never choose to operate where marginal product is rising because hiring an additional worker would increase the "value" a worker contributes to the firm and cost would remain constant. As such, value and cost diverge as long a marginal product is increasing, and it is always more profitable to continue to hire more workers.
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This table shows individual demand schedules for a market.
According to the table shown, if the price were $0.50, what will total demand by Betty and Barney be?
A. 18
B. 36
C. 75
D. 47
An increase in the price of good x will be accompanied by:
a. a shift in the market demand curve for good x. b. a shift in the market demand curve for good y (a substitute for good x). c. a movement along the market demand curve for good x. d. both b and c.
Everything that consumers purchase during a period is included as part of consumption when calculating GDP
a. True b. False
Which of the following is always TRUE of rational behavior?
A) It always entails pursuing one's own best interest. B) It always yields the best possible outcome for all individuals. C) It never involves the pursuit of greedy self-interest. D) It never involves taking into account the interests of others.