If a Firm Hires Another Worker and Her Marginal Product

question 22

Multiple Choice

If a firm hires another worker and her marginal product of labor is positive, we know that the firm's total output is:

• A) decreasing.
• B) unchanged.
• C) increasing.
• D) 0 (zero).
• E) equal to the marginal product of that worker.

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Definitions:

Maximum Return

The highest possible profit or gains that can be achieved from an investment or business venture.

Income From Operations

The profit realized from a business's ongoing operations, excluding any income derived from investments or extraordinary one-time events.

Residual Income

The amount of income that remains after all personal debts and expenses have been paid.

Minimum Acceptable

The lowest level or standard that is satisfactory or allowable.