A Profit-Maximizing Firm Will Never Hire That Quantity of a Factor

question 26

Multiple Choice

A profit-maximizing firm will never hire that quantity of a factor of production for which that factor has an increasing marginal productivity because

• A)it would not be maximizing output.
• B)it would not be maximizing the productivity of labor.
• C)it would not be minimizing costs.
• D)it would not be maximizing profits.

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Definitions:

Demographic Transition

A model describing changes in birth and death rates in a country as it develops, leading to stabilization of the population.

Birth Rate

The frequency at which births occur in a population per unit time, often measured as the number of births per 1,000 people per year.

Death Rate

The number of deaths per unit of population within a specific time frame, often expressed per 1,000 or 100,000 individuals per year.

Demographic Transition

The transition from high birth and death rates to low birth and death rates, accompanying economic development and improvements in living conditions.