Managerial Economicsintermediate
Match each comparison with its hiring implication.
Answer
Marginal value product greater than wage - Continue hiring has an incentive, Marginal value product less than wage - Do not hire on this comparison, Marginal value product equal to wage - Stop hiring at the stated point
Explanation
### The pairs
| Item | Matches | Why |
|---|---|---|
| Marginal value product greater than wage | Continue hiring has an incentive | The additional worker generates more income than the wage cost. |
| Marginal value product less than wage | Do not hire on this comparison | The wage cost exceeds the income added by the worker. |
| Marginal value product equal to wage | Stop hiring at the stated point | The additional income matches the additional wage cost, which is the stopping condition in the rule. |
### Terms
- **Marginal value product**: Additional income generated by one additional unit of labor.
### Remember
Compare the next worker's added value with the worker's wage.
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