Assume That an Employer Discovers That the Marginal Revenue Product

question 17

Essay

Assume that an employer discovers that the marginal revenue product of the last two workers that he has hired is less than the wage rate that he is paying them. He is operating in a purely competitive market in both the output that he sells and the labor that he hires. What would you advise this employer to do and why?

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Definitions:

Behavior Systems Approach

An approach in psychology that studies behavior as part of a functional system, including its adaptive purposes and evolutionary history.

Instinctive Behavior System

Innate, fixed patterns of behavior in animals that are typically automatic in response to specific stimuli.

Specific Function

Branches from the mathematical definition to specify a distinct purpose or role that a particular process, action, or object serves within a broader system.

Imprinting

A rapid learning process that occurs in some animals early in life, whereby they establish a behavior pattern or social attachment.