Until what point does a profit-driven company continue to employ labor?

Multiple choice question for Human Capital. Select an option, then review the explanation below.

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when marginal revenue equals marginal costwhen long-run marginal revenue matches long-run marginal costwhen the ratio of labor output equals the ratio of capital outputwhen the cost of hiring an additional worker equals the additional revenue generated by that worker

Explanation

A profit-maximizing firm will keep hiring labor as long as the cost of employing one more worker (marginal cost of labor) is less than or equal to the extra revenue that worker produces (marginal revenue product). When these two are equal, the firm maximizes profit.

Practice related questions from the same subject.

1.From the perspective of the human capital theory, what is the role of education?
2.What does the signaling theory of education primarily suggest?
3.When two positions demand equal skills and experience, which job is generally the one offering higher pay?
4.Which statement accurately describes the relationship between attractiveness and earnings among workers?
5.Which profession has the highest potential to earn income comparable to a superstar?

Until what point does a profit-driven company continue to employ labor?

Explanation

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