If a Firm Wants to Maximize Profits, It Should Hire

question 206

Multiple Choice

If a firm wants to maximize profits, it should hire workers up to the point at which

• A) total factor cost = total revenue.
• B) marginal factor cost = marginal revenue product.
• C) marginal utility = marginal cost.
• D) total social benefit = total social costs.

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Definitions:

Employees

Individuals who work part-time or full-time under a contract of employment, whether oral or written, express or implied, and have recognized rights and duties.

Monthly Sales

The total revenue or units sold by a business in one calendar month.

Bonus Plan

An incentive scheme that rewards employees with extra payments in addition to their regular salary based on performance.

Significantly Increased

A statistical term describing when an observed value or statistic shows a substantial and unlikely to occur by chance increase from a baseline or reference value.