Suppose a Firm Finds That an Additional Dollar Spent on Labor

question 98

Multiple Choice

Suppose a firm finds that an additional dollar spent on labor increases output more than does an additional dollar spent on machines. Under these conditions, the firm:

• A) is technically efficient.
• B) is economically efficient.
• C) should substitute labor for machines if it wants to increase economic efficiency.
• D) should substitute machines for labor if it wants to increase economic efficiency.

Understand the characteristics and common types of social phobias.

Differentiate between panic attacks and panic disorder based on their triggers and outcomes.

Comprehend the genetic contributions to posttraumatic stress disorder (PTSD).

Analyze the role of life experiences and social circumstances in the development of depressive disorders, with a focus on gender differences.

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in the marketplace.

Common Share

Equity securities that represent ownership in a corporation, giving holders voting rights and a share in the company’s profits through dividends.

Current Ratio

A financial ratio that evaluates a firm's capacity to cover its short-term liabilities using its existing assets.

Acid-Test Ratio

A financial metric that evaluates a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.