A Company Finds That the Value of Marginal Product for the Current

question 86

Multiple Choice

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $53.Which of the following is correct?

• A) The firm is employing the profit-maximizing quantity of labor.
• B) Too much labor is currently employed and the firm will lay off some workers.
• C) Too few workers are currently employed and the firm will hire more workers.
• D) The firm should shut down and produce nothing.
• E) More information about the price of the product is needed to determine if the firm is hiring the profit-maximizing amount of labor.

---

Definitions:

Operant Behavior

A concept in behavioral psychology referring to behavior that is controlled or influenced by its consequences, including rewards and punishments.

Primary Reinforcer

A stimulus that satisfies basic survival instincts such as food, water, and warmth, and doesn't require learning to become effective.

Conditioned Reinforcer

a stimulus that gains its reinforcing power through association with a primary reinforcer, used to increase the likelihood of a specific response in operant conditioning.

Reinforcing Power

The ability of a stimulus to increase the likelihood of the repetition of a behavior when it is presented following that behavior.