A Profit-Maximizing Firm That Wants to Train Its Workers CANNOT

question 42

Multiple Choice

A profit-maximizing firm that wants to train its workers CANNOT

• A) equate the marginal revenue product of labor to the value of expenditures on labor over time.
• B) allow worker marginal revenue product in the post-training period to exceed the wage paid in the post-training period.
• C) allow the wage in the post-training period to be equal to or greater than the worker's post-training marginal revenue product.
• D) allow the cost of training to exceed worker marginal revenue product during the training period.

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Definitions:

Labor-Management

The interaction, negotiation, and relationship between the workforce (labor) and the management team of an organization, often focusing on collective bargaining, workplace conditions, and labor rights.

Labor Agreement

A contractual agreement between an employer and a group of employees (often represented by a union) regarding terms of employment.

Break-Even Analysis

An evaluation to determine the point at which revenues and expenses are equal, and no net loss or gain is achieved.

Variable Costs

Costs that change in proportion to the level of activity or volume of output in a business, such as materials and labor costs.