What Two Factors Should You Equate in Deciding How Many

question 43

Multiple Choice

What two factors should you equate in deciding how many workers to employ?

• A)the marginal product of labour and the marginal product of capital
• B)the marginal product of labour and the real wage rate
• C)the marginal product of labour and the real interest rate
• D)the marginal product of capital and the real wage rate

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Definitions:

Price-Earnings Ratio

A valuation metric for stocks, calculated by dividing the market price of a stock by its earnings per share, indicating the dollar amount an investor can expect to invest in a company to receive one dollar of that company’s earnings.

Common Stock

Equity ownership in a corporation, with shareholders entitled to vote on corporate matters and receive dividends when declared.

Market Price

The present cost at which a product or service can be purchased or sold on the market.

Return on Total Assets

A measure of profitability that indicates how efficiently a company is using its assets to generate earnings.