A Profit-Maximizing Firm Will Hire Additional Units of Labor Until

question 300

Multiple Choice

A profit-maximizing firm will hire additional units of labor until

• A) the additional cost of hiring the last worker equals the additional revenue generated by that worker.
• B) the additional cost of hiring the last worker equals the marginal factor cost of the worker.
• C) the extra revenue from hiring the last worker equals the marginal physical product of labor.
• D) the extra cost from hiring the last worker equals the cost of the product.

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Definitions:

Net Income

The net income of a company following the deduction of all costs, taxes, and expenses from the gross revenue.

Idle Cash

Idle cash refers to money that is not currently invested, spent, or utilized in any way, meaning it does not earn interest or contribute to the financial goals of an individual or company.

Money-Market Securities

Short-term financial instruments, typically with high liquidity and low risk, used for borrowing and lending in the money market.

Current Assets

Assets likely to be converted into cash, sold, or consumed within one year or the business cycle, whichever is longer.