Consider Labour That Is Hired for $18 Per Hour

question 67

Multiple Choice

Consider labour that is hired for $18 per hour.If the last hour hired produces 8 units of output which sells for $2 per unit,that labour-hour adds ________ to the firm's profit and so ________ labour should be hired.

• A)-$128; more
• B)-$2; less
• C)$16; less
• D)$16; more
• E)$0; no

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Definitions:

Selling Price

the amount of money for which a good or service is sold to a customer, not necessarily reflecting the cost of production or provision.

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee, typically recognized as a portion of the investee’s net income or loss.

Voting Shares

Shares that give the shareholder the right to vote on matters of corporate policy making and on the election of the board of directors.

Equity Securities

Financial assets representing ownership interest in a company, such as stocks.