Question

What information would Labracorp need in order to make a rational economic decision regarding Jim's employment?

A) If Labracorp's total cost is less than its total revenue.

B) If Labracorp's total revenue is less than its total cost.

C) If Jim's marginal cost is greater than his marginal revenue.

D) If Jim's marginal revenue is greater than his marginal cost.

Answer 1

Labracorp would need to evaluate whether Jim's marginal revenue is greater than his marginal cost in order to make a rational economic decision regarding his employment.

Step-by-step explanation:

In order to make a rational economic decision regarding Jim's employment, Labracorp would need to consider whether Jim's marginal revenue is greater than his marginal cost (choice D). Marginal revenue is the additional revenue that Labracorp earns from each additional unit of output that Jim produces, while marginal cost is the additional cost incurred in producing each additional unit.

If Jim's marginal revenue is greater than his marginal cost, it indicates that the revenue earned from each additional unit of output exceeds the cost of producing that unit. This suggests that Labracorp would benefit from increasing Jim's employment and production. However, if Jim's marginal cost is greater than his marginal revenue, it means that the cost of producing each additional unit exceeds the revenue earned from that unit. In this case, Labracorp would need to evaluate whether it is more profitable to reduce Jim's employment and production.