If the Wage Rate Exceeds the Value of Marginal Product

question 15

Multiple Choice

If the wage rate exceeds the value of marginal product, a firm

• A) can increase its profit by firing some workers.
• B) can increase its profit by increasing the wage rate and not changing its employment.
• C) can increase its profit by hiring more workers.
• D) can increase its profit by increasing the wage rate and increasing its employment.
• E) is maximising its profit.

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Definitions:

Two-Factor Theory

A psychological theory proposing that emotions are composed of two factors: physiological arousal and cognitive interpretation.

Physical Arousal

The bodily response to stimuli, characterized by increased physiological activity, including heart rate, blood pressure, and energy levels.

Sympathetic Nervous System

Part of the autonomic nervous system that prepares the body for physical activity by triggering the "fight or flight" response.

Salivation

The involuntary production of saliva in the mouth, which can be stimulated by the anticipation of food or the presence of something to chew.