Labor Supply Is the Relationship Between

question 167

Multiple Choice

Labor supply is the relationship between

• A) wages and willingness to hire workers.
• B) price of output and amount of output for sale.
• C) price of capital and amount of capital for sale.
• D) wages and willingness to work.
• E) wages and amount of output for sale.

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Definitions:

Zero Economic Profits

A situation in perfect competition where firms earn just enough revenue to cover their total costs, including opportunity costs.

Marginal Revenue

Marginal Revenue is the additional income received from selling one more unit of a product.

Marginal Decision Rule

A principle that states that an action should be taken if, and only if, the marginal benefits exceed the marginal costs.

MC > MR

A condition where a firm's marginal cost is greater than its marginal revenue, suggesting that it would not be profitable to increase output further.