Suppose a Competitive Firm Is Paying a Wage of $12

question 59

Multiple Choice

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labor is the only input.If the last worker hired increases output by three units per hour, then to maximize profits the firm should

• A)not change the number of workers it currently hires.
• B)lay off one or more of its workers.
• C)hire additional workers.
• D)There is not enough information to answer the question.

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Definitions:

Fluid Intelligence

The ability to think logically and solve problems in novel situations, independent of acquired knowledge.

Creative Thinker

An individual who is able to think in unique and unconventional ways, often leading to novel solutions or innovative ideas.

Longitudinal Study

A research approach that follows the same subjects over a period of time, allowing for the observation of changes or developments in the subject matter.

Stability and Change

Refers to the dynamic nature of systems, processes, or entities where certain attributes remain constant while others vary over time.