Suppose a Competitive Firm Is Paying a Wage of $12

question 55

Multiple Choice

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labour is the only input.If the last worker hired produces four units of output per hour, then to maximise profits the firm should

• A)not change the number of workers it currently hires.
• B)lay off some workers.
• C)hire another worker.
• D)There is not enough information to answer the question.

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Definitions:

Contingency Management

Contingency Management is a behavior modification technique where desired behaviors are reinforced through tangible rewards or the removal of negative consequences.

Counterconditioning

A behavior therapy technique where a maladaptive response is replaced with a more desirable one by associating the feared stimulus with a new, positive response.

Stimulus Control

A behavior modification technique that involves changing the environment to manage the stimuli that trigger undesirable behaviors, thereby reducing or eliminating those behaviors.

Stimulation

Any activity that arouses or excites a bodily function or mental process, potentially leading to enhanced functioning or perception.