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:

Journal Entry

A record in accounting that represents a transaction in the books of account, consisting of debits and credits.

Prepaid Rent

An asset account on the balance sheet representing rent payments made in advance of the rental period.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate periods.

Accrued Fees

Charges that have been incurred but not yet paid or recorded at the end of a reporting period, representing liabilities on the balance sheet.