If a Firm Could Increase Profits by Hiring Less Labor

question 5

Multiple Choice

If a firm could increase profits by hiring less labor and more capital, then

• A) the last dollar spent on labor must yield a smaller increase in output than the last dollar spent on capital.
• B) the last dollar spent on labor must yield a larger increase in output than the last dollar spent on capital.
• C) the price of labor exceeds the price of capital.
• D) the optimal production technique must be capital intensive.

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Definitions:

LLP

Refers to a Limited Liability Partnership, a business structure where partners have limited liabilities and the partnership has elements of both partnerships and corporations.

Liable

Legally responsible or obligated, particularly in the context of debts or legal judgements.

Wrongful Dissociation

An unlawful separation or removal of a partner from a partnership contrary to the terms of the partnership agreement or statutes governing partnerships.

Custodian

An entity responsible for the safekeeping, care, and maintenance of assets or property on behalf of its owner(s) or a designated beneficiary.