Managerial Economicsbasic
In the labor decision rule, the price paid for labor is the _____.
Answer
wage
Explanation
### Why this is right
The wage is the price of labor and represents the input cost compared with the worker's marginal value product.
### The concept
The rule evaluates an additional worker by comparing the income generated with the wage paid. This focuses on the next unit of labor rather than total payroll alone.
### Remember
For labor, the marginal cost in this rule is the wage.
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