If a Profit-Maximizing Firm Hires an Additional Unit of Labor

question 65

Multiple Choice

If a profit-maximizing firm hires an additional unit of labor, what must be true about labor's wage and marginal revenue product?

• A)Its wage always equals its marginal revenue product.
• B)Its wage is always greater than its marginal revenue product.
• C)Its wage is always total revenue minus marginal revenue product.
• D)Its wage is always greater than or equal to its marginal revenue product.
• E)Its wage is always less than or equal to its marginal revenue product.

Analyze the impact of initial endowments on the allocation of resources.

Comprehend the relationship between marginal utilities and price ratios in market equilibrium.

Identify conditions for supply and demand equilibrium in a market.

Understand the significance of the First Theorem of Welfare Economics.

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Definitions:

Math Problem-Solving

The process of using mathematical methods and techniques to address and solve problems or equations.

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The feeling of confusion or ambiguity regarding one's own emotions or how to interpret the emotions of others.

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The way information is presented or structured, influencing the perception and interpretation of that information.