Table 10.1 -Refer to Table 10.1. Suppose That This Year the Wage

question 45

Multiple Choice

Table 10.1
-Refer to Table 10.1. Suppose that this year the wage rate is $30 and the price of the good is $1. If the firm is maximizing profit ________ workers will be hired. Next year the wage rate will increase to $40, but the price of the good will remain at $1. Then ________ workers will be hired.

• A) 6; 5
• B) 6; 6
• C) 7; 6
• D) 5; 5

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Definitions:

Return On Investment (ROI)

A financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.

Net Operating Income

The total profit of a business after operating expenses are deducted but before taxes and interest are calculated.

Combined Margin

A measure used in financial analysis that aggregates gross profit, operating margin, and net margin.

Fixed Expenses

Costs that do not change with the volume of production or sales, such as rent, salaries, and insurance.