Two assumptions that make the model of the labor market developed in class a Classical model are that firms maximize profits and the market clears, i.e. supply and demand are equalized. O True O False A profit-maximizing firm will equate the marginal product of labor to the marginal product of capital. O True O False According to the Classical model, an increase in total factor productivity, holding the real wage and the amount of capital constant, will cause a profit-maximizing firm to want to keep production fixed and hire less labor. O True O False