Assume That the Going Wage for a Worker at a Competitive

question 295

Multiple Choice

Assume that the going wage for a worker at a competitive firm is $50 a day. If the marginal revenue product for the sixth worker is $55 a day, the

• A) sixth worker should be hired.
• B) firm is maximizing its profits.
• C) firm should hire fewer than six workers.
• D) competitive firm can change the wage rate.

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Definitions:

Balance Sheet

A summary report of a company's financial position, including assets, liabilities, and the equity of its shareholders, at a distinct time.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profit or loss.

Year-End Closing Process

The Year-End Closing Process involves finalizing a company's financial activities for the year, updating accounts, and preparing financial statements.

Net Income

The final earnings of a corporation once all costs, taxes, and expenses are subtracted from gross revenue.