We Observe a Profit-Maximizing Firm Hiring Its 51st Employee

question 355

Multiple Choice

We observe a profit-maximizing firm hiring its 51st employee.It is possible to infer that,when 50 employees are hired,the

• A) wage exceeds the value of the marginal product of labor.
• B) value of the marginal product of labor exceeds the wage.
• C) marginal product of labor is increasing.
• D) firm is attempting to increase its market share.

Calculate contribution to overhead and profitability ratios.

Comprehend information useful for evaluating the profitability or cost-effectiveness of departmental activities.

Allocate indirect expenses across departments based on various drivers (floor space, ad spots, sales).

Understand responsibility accounting and the creation of performance reports for department managers.

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Definitions:

Opportunity Cost

The expense incurred by not choosing the second-best option available during decision-making.

Farmer

An individual engaged in agricultural activities, involved in the cultivation of crops or the raising of livestock.

Economic Progress

The process through which an economy grows or improves its capacity to meet its population's needs and wants.

Comparative Advantage

A situation where a country, individual, or company can produce a good or service at a lower opportunity cost than others.