If a Firm Could Hire All the Workers It Wanted

question 14

Multiple Choice

If a firm could hire all the workers it wanted at a zero wage (i.e. ,the workers are volunteers) ,the firm should hire

• A)Enough workers to produce the output where diminishing returns begin.
• B)Enough workers to produce the output where worker productivity is the highest.
• C)Enough workers to produce where the MPP equals zero.
• D)All the workers that can fit into the factory.

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Definitions:

Equilibrium Market Wage Rate

The wage rate at which the quantity of labor firms wish to employ equals the quantity of labor workers wish to supply.

Quantity Demanded

The overall volume of a commodity or service that is desired and can be bought by consumers at a specific price point.

Market Wage Rate

This is the prevailing rate of pay for workers in a particular job or industry, determined by the supply of and demand for labor.

Power Cords

Electrical cables that connect an appliance to the main electricity supply.