The decision rule for a profit-maximizing firm operating in a competitive market to hire an additional worker is the value of the:
A) marginal product of the worker should be equal to or greater than the wage rate.
B) marginal product of the worker should be equal to or lower than the wage rate.
C) average product of the worker being hired should be equal to the wage rate.
D) average product of the worker being hired should be lower than the wage rate.
A
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A government budget surplus may enable all of the following except
A. A decrease in the money supply. B. A decrease in taxes. C. An increase in income transfers. D. An increase in expenditures on goods and services.
If perfectly competitive firms have to account for external costs of production, then at the equilibrium level of output
A. P < MSC B. P = MC C. MC = MSC D. Both A and C are correct.
A system in which the value of currency issued by the government is based entirely on public faith that the currency will be acceptable in trade is
A) a fiduciary system. B) a private property system. C) a Gresham system. D) a socialistic system.
Which one of the following events will leave GDP unchanged?
a. You pay $500 to repair your car damaged in an accident. b. You buy a new domestic car to replace one that was stolen. c. You lose $500 playing blackjack with friends. d. You work extra hours this month to help make up for the money you lost playing blackjack.