Explain why an employer in a perfectly competitive market will hire more workers when the marginal revenue product is greater than the wage
What will be an ideal response?
The marginal revenue product represents the value of hiring the worker to the firm. It is the additional revenue that the firm gains from hiring the worker. If the gain is greater than the cost of hiring the worker (which is the wage in a competitive labor market), the firm will increase its profits by hiring the additional worker.
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The flow of private foreign investment and grants and loans is included in a country's
(a) current account. (b) capital account. (c) cash account. (d) none of the above.
If a typical monopolistically competitive firm is incurring short-run losses, then
A) other more competitive firms will enter the market. B) as some firms leave, the remaining firms will experience an increase in the demand for their products. C) as some firms leave, the demand for the products of the remaining firms will become more elastic. D) the industry will eventually cease to exist.