Suppose All Perfectly Competitive Construction Firms Are Hiring the Profit-Maximizing

question 14

Multiple Choice

Suppose all perfectly competitive construction firms are hiring the profit-maximizing quantity of labor and capital and are paying their workers $5 per hour.The government imposes a minimum wage of $6 per hour.Then:

• A)the value of the marginal product will exceed the wage, and firms will hire more workers.
• B)the value of the marginal product will be less than the wage, and firms will lay off some workers.
• C)firms will increase their prices to keep the value of the marginal product equal to the wage.
• D)firms will have to exit the industry, since the value of the marginal product is always less than the wage.

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Definitions:

Sustainability

The practice of using resources in a way that meets present needs without compromising the ability of future generations to meet their own needs, often with a focus on environmental preservation.

Equality

The state of being equal, especially in status, rights, and opportunities.

Wicked Problems

Complex issues that are difficult to define and have no clear solution, often seen in social planning and policy.

Hybrid Model

A business or organizational model that combines elements of different strategies, structures, or systems, often mixing in-person and virtual operations.