MrSmith's Firm Is Currently Hiring 30 Workers

question 39

Multiple Choice

Mr.Smith's firm is currently hiring 30 workers.The value of marginal product of the last worker is $7.00 per hour.The wage rate is $8.00 per hour.To increase profit,Mr.Smith should

• A)continue hiring 30 workers because the firm earns a surplus of $1.00 on each worker hired.
• B)increase the price of the firm's product so that the value of marginal product increases to $8.00 per hour.
• C)decrease the price of the firm's product so that the value of marginal product increases to $8.00 per hour.
• D)decrease the number of workers until the value of marginal product of labour equals $8.00.
• E)increase the number of workers until the value of marginal product of labour equals $8.00.

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Definitions:

Union Labor

Union Labor refers to labor or workforce that is represented by a labor union, which negotiates wages, working conditions, and other employment terms on their behalf.

Taft-Hartley Act

A United States federal law enacted in 1947 that restricts the activities and power of labor unions.

Wagner Act

A foundational piece of U.S. labor law, officially the National Labor Relations Act of 1935, which guarantees basic rights of private sector employees to organize into trade unions, engage in collective bargaining, and take collective action such as strikes.

Pure Monopsony

A market condition where there is only one buyer for a product or service, giving that buyer significant control over market conditions.