PPSCFPSCNTSPakistan govt jobs
- Subject
- Production Factorseconomics-mcqs › production-factors
- Published
- 30 May 2019
- Last updated
- 28 May 2026
At what point should a profit-driven competitive firm continue to employ additional workers?
Multiple choice question for Production Factors. Select an option, then review the explanation below.
Explanation
A competitive firm maximizes profit by hiring labor up to the point where the value of the marginal product of labor matches the wage. This ensures the cost of hiring an additional worker is exactly covered by the revenue they generate.
More Production Factors MCQs
Practice related questions from the same subject.
- 1.Imagine a war fought using biological weapons that eliminate human labor but leave physical capital intact. Compared to the pre-war period, what changes would you expect in the equilibrium wages and rental prices after the conflict?
- 2.How does a rise in automobile prices affect the demand for autoworkers?
- 3.Why does the demand curve for an individual firm's factor of production slope downward?
- 4.Which of the following is NOT a likely result of a reduction in the supply of agricultural tractors?
- 5.How does a reduction in the number of fishermen affect the market for capital goods, such as fishing boats, in the fishing sector?