If MPK > R, the Firm

question 22

Multiple Choice

If MPK > r, the firm:

• A) should hire more labor
• B) should hire more capital until MPK = 0
• C) should get rid of some capital until MPK = r
• D) should hire more capital until MPK = r
• E) has the optimal amount of capital

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Definitions:

Good Outcomes

Positive or desirable results or consequences of an action or situation.

Optimistic Explanatory Style

A tendency to explain positive events as having permanent causes, while attributing negative events to temporary causes.

Situational Factors

Environmental circumstances or conditions that can affect behavior and decision-making.

Setbacks

Obstacles or reversals in progress that delay or prevent the achievement of goals.