At What Point Should a Firm Stop Hiring Workers

question 14

Multiple Choice

At what point should a firm stop hiring workers?

• A)When the wage per worker starts to increase.
• B)When the price of capital starts to decrease.
• C)When the firm's marginal gain from hiring an additional worker is zero.
• D)When the firm's marginal profit from hiring an additional worker equals the cost of hiring that worker.
• E)When the firm's value of marginal product equals zero.

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Definitions:

Altruism

Selfless concern for the well-being of others.

Strangers

Individuals who are not known personally or familiar to someone.

Larger Groups

Describes collections of individuals that exceed the small, interpersonal dynamics of smaller groups, influencing social behavior differently.

Pluralistic Ignorance

A situation in which individuals rely on others to identify a norm but falsely interpret others’ beliefs and feelings, resulting in inaction.