A Profit- Maximizing Firm Will Increase Its Use of Capital

question 81

Multiple Choice

A profit- maximizing firm will increase its use of capital and decrease its use of labour when the

• A) average product of capital is higher than the average product of labour.
• B) total product of capital is higher than the total product of labour.
• C) marginal product of capital, per dollar spent on capital, is less than the marginal product of labour, per dollar spent on labour.
• D) marginal product of capital, per dollar spent on capital, is greater than the marginal product of labour, per dollar spent on labour.
• E) marginal product of capital is higher than the marginal product of labour.

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Definitions:

Stimulates Follower Identification

In leadership, the ability to inspire followers to align their identity and interests with the leader and the collective goals of the organization.

Positive Motivations

Incentives or drives that encourage individuals to behave or act in a particular way because of anticipated positive outcomes or rewards.

LMX Model

Leader-Member Exchange Model, a theory that emphasizes the dyadic relationship between leaders and followers, focusing on how these relationships influence organizational outcomes.

Intraorganizational Competition

Competition within an organization, often between departments or teams, for resources, recognition, or power.