If a Worker Can Produce 20 Units of Output Which

question 164

Multiple Choice

If a worker can produce 20 units of output which can be sold for $4 per unit, the maximum wage that the firm should pay to hire this worker is

• A)$80
• B)$80 minus the firm's profit markup
• C)It depends on what the going wage rate is in the labour market.
• D)There is insufficient information to answer the question.

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Definitions:

Industrial Capitalism

Economic system characterized by private or corporate ownership of capital goods, investments determined by private decision, and prices, production, and the distribution of goods determined mainly by competition in a free market.

Commercial Capitalism

An economic system where trade, goods, and capital are privately controlled and operated for profit, characterized by the emergence of market economies and merchant classes.

Trust

Refers to the firm belief in the reliability, truth, ability, or strength of someone or something.

Saloon

A place for drinking alcohol that was especially popular in the United States during the 19th and early 20th centuries, serving as a social hub in towns and cities.