When MFC = MRP, a Firm in a Competitive Market

question 197

Multiple Choice

When MFC = MRP, a firm in a competitive market will

• A) stop hiring.
• B) hire more workers.
• C) earn additional profits.
• D) layoff workers.

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Definitions:

Free Trade Arrangements

Agreements between countries that reduce or eliminate barriers to trade, such as tariffs and import quotas, to promote economic cooperation.

WTO

The World Trade Organization, an international body that deals with the rules of trade between nations, aiming to ensure that trade flows smoothly, predictably, and freely.

NAFTA

The North American Free Trade Agreement; a treaty between the United States, Canada, and Mexico that eliminated most tariffs on trade between them.

European Union

A political and economic union of 27 European countries that have agreed to follow common economic, social, and security policies.