If a Firm Hires Labour and with Its Current Employees

question 91

Multiple Choice

If a firm hires labour and with its current employees W = VMPL,then profit:

• A) is maximized.
• B) can be increased by hiring less labour.
• C) can be increased by hiring more labour.
• D) can be increased by increasing the wage rate.

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Definitions:

Price Level

A measure of the average prices of goods and services in an economy, indicating the cost of living and inflation.

Price Expectations

The anticipations of consumers, businesses, and investors about future price levels, which can influence current economic decisions and behaviors.

Long-Run Aggregate Supply

The total supply of goods and services that a country's economy can produce over time when all inputs are fully utilized.

Stock Prices

The market price at which shares of public companies are bought and sold, reflecting the value that investors place on these companies.