The Additional Revenue Obtained by a Firm When It Hires

question 147

Multiple Choice

The additional revenue obtained by a firm when it hires an additional worker, holding other inputs constant, is

• A) the marginal physical product of labor.
• B) the marginal revenue product of labor.
• C) the marginal cost of labor.
• D) equal to total revenue divided by the number of workers.

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Definitions:

Winner's Curse

A phenomenon in auctions where the winner tends to overpay due to incomplete information or overly optimistic valuation of the asset.

Rivals' Information

Data or intelligence about competitors’ strategies, performance, and operations, useful for gaining a competitive advantage in the market.

Fewer Bidders

a situation in auctions or competitive environments where there is a reduced number of participants bidding for the same item or contract.

Common-value Auction

An auction format where the item for sale has the same value for everyone but the bidders have different information about that value.