If a Profit-Maximizing Firm Hires an Additional Unit of Labor

question 32

Multiple Choice

If a profit-maximizing firm hires an additional unit of labor, what must be true about labor's wage and marginal revenue product?

• A) Its wage always equals its marginal revenue product.
• B) Its wage is always greater than its marginal revenue product.
• C) Its wage is always total revenue minus marginal revenue product.
• D) Its wage is always less than or equal to its marginal revenue product.

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Definitions:

Psychosurgery

A medical procedure that involves operating on the brain to treat mental illness or abnormal behavior, now rare due to advancements in psychiatric medication and therapies.

Trephining

Trephining, or trepanation, is an ancient surgical intervention that involves drilling or scraping a hole into the human skull, historically performed for medical and ritualistic purposes.

Antipsychotic Drugs

Medications used to treat symptoms of psychotic disorders, such as schizophrenia and bipolar disorder, by altering brain chemistry.

Deinstitutionalization

The process of reducing or eliminating reliance on institutional care (like psychiatric hospitals) for individuals with mental illness in favor of community-based services.