If the Wage Rate Is Less Than the Marginal Revenue

question 116

Multiple Choice

If the wage rate is less than the marginal revenue product of labor, the firm should ________ to maximize profits.

• A) hire less labor and produce less output
• B) hire less labor and produce more output
• C) hire more labor and produce less output
• D) hire more labor and produce more output

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Definitions:

Thirteenth Amendment

An amendment to the United States Constitution that abolished slavery and involuntary servitude, except as punishment for a crime.

Slavery

A system in which individuals are owned by others, deprived of personal freedom and forced to perform labor or services.

Fifteenth Amendment

An amendment to the U.S. Constitution that prohibits the federal government and states from denying a citizen the right to vote based on their "race, color, or previous condition of servitude."

Right to Vote

The entitlement of citizens to participate in their government's election process to choose leaders and voice opinions on legislation and policies.