When We Focus on the Firm as a Supplier of a Good

question 289

Multiple Choice

When we focus on the firm as a supplier of a good or a service, we assume that the firm is a profit maximizer. When we focus on the firm as a demander of labor, we assume that the firm's objective is to

• A)minimize wages.
• B)minimize variable costs.
• C)maximize the number of workers hired.
• D)maximize profit.

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Definitions:

Required Return

The minimum expected return by investors for investing in a particular security or project, taking into account the risk associated with it.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used to analyze the profitability of a projected investment or project.

Mutually Exclusive Projects

Projects that, when considered by a business, only one can be chosen as they compete for the same resources.

Straight-line Depreciation

A process for dividing the price of a tangible property into uniform yearly portions throughout its operational life.