If a firm finds that the wage rate (W) is less than the value of marginal product (VMP), then to maximize its profit the firm should hire
A) less labor, which will increase the VMP.
B) more labor, which will decrease the VMP.
C) no more or less labor, because profits are greatest when W < VMP.
D) more labor, because hiring more labor will increase both W and VMP until they are equal.
B
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If the spot exchange rate between dollars and pounds is equal to 2 dollars for one pound and the forward exchange rate equals 2.10 dollars for one pound, then
A) the dollar is trading at a forward premium. B) the pound is trading at a forward discount. C) the pound is trading at a forward premium. D) the market presents an opportunity for arbitrage.
Which of the Fed's instruments is most frequently used?
A) Changing reserve requirements B) Open-market operations C) Changing the discount rate D) Changing margin requirements for the stock market
If John purchases 10 percent more compact discs when his income increases 5 percent, then:
a. his total expenditure on compact discs will fall as his income increases. b. compact discs would be classified as an inferior good. c. compact discs would be price elastic. d. compact discs would be income inelastic. e. compact discs would be income elastic.
In order to bring GDP and national income into accord,
a. add indirect business taxes to national income and we have GDP b. add depreciation of capital and indirect business taxes to GDP and we have national income c. subtract depreciation of capital from GDP and we have national income d. subtract depreciation of capital and proprietor's income from GDP and we have national income e. subtract depreciation of capital and indirect business taxes from GDP and we have national income