A consultant interviews the hiring manager of a small, profit-maximizing firm. The manager explains that the firm used to have 15 employees but decided not to rehire when the most-recently-hired employee left the company, so the firm now has 14 employees. We can infer that
a. for the 15th employee, the wage exceeded the value of the marginal product of labor.
b. for the 15th employee, the value of the marginal product of labor exceeded the wage.
c. the firm is too small and should rehire to replace the 15th employee.
d. the firm is no longer attempting to maximize profits.
a
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Suppose a U.S. citizen invests $1,000 to purchase a one-year Japanese bond that has an interest yield of 10 percent. If the dollar appreciates 20 percent against the Japanese yen by the maturity date, the dollar value of the proceeds is _____
a. $900 b. $1,100 c. $1,300 d. $1,500 e. $1,200
Which of the following will cause the investment function to shift upward?
a. A decrease in government subsidies to businesses b. An increase in business profits c. A decline in capacity utilization d. Expectations of higher business taxes e. An increase in the market rate of interest