If a Firm Hires a Worker by Paying Him a Wage

question 120

Multiple Choice

If a firm hires a worker by paying him a wage higher than the value of the marginal product of the worker,________.

• A) the firm is making an optimum decision
• B) firing the worker will reduce the firm's profits
• C) firing the worker will increase the firm's profits
• D) the firm will earn higher profits

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