Practice Questions
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In the context of marginal analysis in hiring, what is the main factor that employers consider when deciding on the wage rate for new employees?
Employers look at how much extra work a new employee can do. Other options are incorrect because Some might think that a candidate's skills are the mo...
In the context of marginal analysis in hiring, how does improving employee retention impact the marginal productivity of the workforce?
When employees stay longer, companies save money on hiring and training new workers. Other options are incorrect because This idea suggests that only ...
In a labor market equilibrium, what should a firm consider when making hiring decisions to maximize its output?
A firm should look at the extra cost of hiring one more worker. Other options are incorrect because Some might think average costs matter more; Focusi...
In the context of marginal analysis in hiring, how should a company evaluate the marginal cost of hiring an additional employee in relation to employee retention rates?
A company should look at how much money the new employee can bring in compared to the costs of losing employees. Other options are incorrect because T...
In the context of hiring, how does marginal productivity theory relate to labor market equilibrium and cost-benefit analysis when determining the optimal number of employees to hire?
This idea says to hire workers until the cost of hiring one more worker is equal to the money that worker brings in. Other options are incorrect becau...
In the context of hiring, marginal analysis helps businesses decide whether to hire an additional employee based on the marginal cost of hiring compared to the marginal benefit of that employee's output. If the marginal cost of hiring an additional worker is $30,000 and the expected marginal benefit is $40,000, what should the business do?
The cost to hire the new worker is $30,000. Other options are incorrect because Some might think saving money is best; People may think more workers a...
In the context of hiring, when a company evaluates the marginal benefit of adding an additional employee, which of the following best describes this concept?
This option shows that the new employee brings in more money than what they cost. Other options are incorrect because This option talks about costs, n...
In a labor market equilibrium, how does marginal analysis assist firms in determining the optimal number of employees to hire?
Marginal analysis helps firms compare the extra cost of hiring one more worker with the extra money that worker can bring in. Other options are incorr...
Michelle's accounting company is considering hiring a fifth bookkeeper. If the marginal product of the fifth bookkeeper is lower than the marginal revenue product but higher than the wage paid, how should the company classify this decision regarding hiring?
The fifth bookkeeper can still bring in more money than they cost. Other options are incorrect because Some might think that if the fifth bookkeeper d...
Marginal product is to hiring decisions as marginal cost is to:
Marginal cost helps businesses decide how much to produce. Other options are incorrect because Some might think pricing is about costs, but it's reall...
Arrange the following steps in the correct order for applying marginal analysis in hiring decisions: A) Calculate the marginal product of the next worker, B) Compare the marginal revenue product with the wage cost, C) Determine the optimal number of workers to hire, D) Assess the impact on overall productivity.
First, you calculate how much extra work the next worker will do. Other options are incorrect because This option suggests skipping the comparison ste...
In marginal analysis for hiring, firms evaluate the additional output produced by hiring one more worker, referred to as the __________. This helps in determining the optimal number of employees based on productivity and revenue generation.
The marginal product is the extra output from hiring one more worker. Other options are incorrect because Total product is the overall output from all...
Michelle's accounting company is considering hiring an additional bookkeeper. Currently, the marginal product of the next bookkeeper is estimated to be 15 hours of work per week, generating $300 in revenue. If the cost of hiring this bookkeeper is $200 per week, what should the company do according to marginal analysis principles?
The company should hire the bookkeeper. Other options are incorrect because Some might think the amount of work, 15 hours, is too little; This option ...
If a firm's marginal revenue product (MRP) from hiring an additional worker is greater than their wage rate, what is the likely outcome for the firm's hiring decisions?
When the extra money made from hiring a worker is more than what you pay them, it makes sense to hire more. Other options are incorrect because Some m...
If Michelle's accounting company follows marginal analysis, what should she consider when deciding to hire an additional bookkeeper?
Michelle should look at how much extra work the new bookkeeper can do. Other options are incorrect because Just counting how many employees are alread...
Which of the following statements accurately reflect the principles of marginal analysis in hiring? Select all that apply.
None of the statements accurately describe how marginal analysis works in hiring. Other options are incorrect because This suggests hiring is always g...
If Michelle's accounting company decides to hire a worker whose marginal product is lower than the marginal revenue product, what is the likely outcome?
Hiring a worker whose marginal product is lower than the marginal revenue product means the cost of hiring is greater than the benefit. Other options ...
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