A Competitive, Profit-Maximizing Firm Hires Workers Up to the Point

question 84

Multiple Choice

A competitive, profit-maximizing firm hires workers up to the point where the

• A)marginal product equals zero.
• B)marginal revenue product equals zero.
• C)marginal product equals the wage.
• D)value of the marginal product equals the wage.

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Definitions:

Market for Loanable Funds

A theoretical financial market where borrowers and lenders interact, with the loan interest rate being determined by supply and demand for funds.

Capital Investment

The purchase of goods or services by a firm to add to its fixed assets to increase its capacity or efficiency in producing goods or services.

Consumption

The use of goods and services by households, one of the major components of an economy’s gross domestic product, indicating economic health and consumer confidence.

Term of a Bond

The length of time until a bond's maturity date, when the principal amount of the bond is due to be paid to the bondholder.