A Firm's Labor Input, Total Output of Labor, and Product

question 21

Multiple Choice

A firm's labor input, total output of labor, and product price schedules are given in the table. Labor is the only variable input. How many workers will the profit-maximizing firm hire if the wage rate is $15 per day?

• A)3
• B)5
• C)6

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Definitions:

Operating Assets

Assets used by a company in its daily operations to generate income, including machinery, buildings, and equipment.

Revenue Recognition

The accounting principle that determines the specific conditions under which income becomes realized or earned as revenue.

Quality Of Income Ratio

A financial metric assessing the proportion of income that is realized in cash, indicating the reliability of reported earnings.

Operating Activities

Business actions that relate directly to the production, sale, and delivery of a company’s products or services, reflected in the cash flow statement.