Suppose That the Value of the Marginal Product of Labour

question 156

Multiple Choice

Suppose that the value of the marginal product of labour is now less than the wage.Hiring an additional worker would be:

• A)profitable
• B)unprofitable
• C)either profitable or unprofitable depending on other circumstances
• D)a socially responsible thing to do

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Definitions:

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's cost.

Present Value

The present value of a future amount of money or series of cash flows, discounted at a certain rate of return.

Cash Flows

The total amount of money being transferred into and out of a business, particularly in the context of operating, investing, and financing activities.

Discounted

A reduced price from the standard cost of goods or services, often used as a sales promotion.