If the Value of Marginal Product of a Factor of Production

question 41

Multiple Choice

If the value of marginal product of a factor of production exceeds the price of the factor, the

• A) firm should hire more of that factor.
• B) firm should hire less of that factor.
• C) firm is maximizing profits.
• D) firm should shut down.

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Definitions:

Robert La Follette

An American political leader and reformer, active in the late 19th and early 20th centuries, who was a founder of the Progressive Movement.

American Culture

The complex and diverse set of values, traditions, social and political relationships, and arts that define the social identity and practices of the United States.

Radio

A technology that uses electromagnetic waves to transmit information, such as music, news, and other types of programming, to a wide audience without physical connections.

1920s

A decade characterized by significant social, economic, and cultural changes, including the Jazz Age, the prohibition era, and significant economic growth followed by the stock market crash of 1929.