If the Hourly Wage Is $50 and the Price of Output

question 3

Multiple Choice

If the hourly wage is $50 and the price of output is $25,then,in the short run,

• A) the firm should add workers if they add 1/2 or more units to output.
• B) the firm should add workers if they add 2 or more units to output.
• C) the firm should hire two workers.
• D) the firm should reduce employment until the wage falls to $25.

Understand the significance of tax deductible expenses and their effect on initial outlay.

Acknowledge the necessity of including both variable and fixed costs in project cash flows according to the incremental cash flow principle.

Understand how to calculate and interpret the tax effects of selling an asset.

Understand the importance of differentiating between earnings and cash flows for project projections.

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Definitions:

Behavior

The way a person responds or behaves in reaction to outside or inside triggers.

Negative Reinforcement

A behavioral strategy involving the removal of an unpleasant stimulus in response to a desired behavior to increase the likelihood of that behavior occurring in the future.

Reinforcing Events

Occurrences or interventions that strengthen a desired behavior by providing positive outcomes or rewards when that behavior is performed.

Positive Reinforcement

A method of increasing the likelihood of a desired response by following it with a pleasant stimulus.