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.

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Definitions:

Spears's

Refers to the principles of servant leadership as articulated by Larry Spears, focusing on characteristics such as empathy, stewardship, and commitment to the growth of people.

Gentle Persuasion

A method of influencing others characterized by the use of soft tactics such as encouragement and logical argumentation, avoiding coercion or aggressive tactics.

Characteristic

A distinguishing feature or quality that defines an individual, group, or thing.

Servant Leader

A leadership philosophy which emphasizes the leader's role as serving the needs of others, focusing on enhancing the growth and well-being of individuals and communities.