Suppose a Profit-Maximizing Firm Hires Labour in a Competitive Labour

question 54

Multiple Choice

Suppose a profit-maximizing firm hires labour in a competitive labour market. If the value of marginal product of labour is greater than the wage rate, the firm should

• A)increase the wage rate.
• B)decrease the wage rate.
• C)increase the quantity of labour it hires.
• D)decrease the quantity of labour it hires.
• E)shift to a more labour-intensive production process.

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Definitions:

Technology-Driven World

A society significantly influenced by rapid technological advancements and digital innovations.

PERT Activity

A task or event within the Program Evaluation and Review Technique, a project management tool used to schedule, organize, and coordinate tasks within a project.

Critical Path

The sequence of stages determining the minimum time needed to complete a project, where any delay in the stages causes a delay in the project.

Organizational Responses

The actions or reactions of an organization to internal or external stimuli such as changes in the market, new regulations, or employee feedback.