Question 1

What happens to the marginal revenue product curve of a factor as more of a complementary factor is hired?

Accepted Answer

A)  It shifts to the left, because its marginal product decreases. 
B)  It shifts to the left, because its marginal product increases. 
C)  It shifts to the right, because its marginal product decreases. 
D)  It shifts to the right, because its marginal product increases. 
A)  It shifts to the left, because its marginal product decreases. 
B)  It shifts to the left, because its marginal product increases. 
C)  It shifts to the right, because its marginal product decreases. 
D)  It shifts to the right, because its marginal product increases.

Question 2

Figure 14.2
A consumer's original utility maximizing combination of income and leisure is shown in the diagram above as point A. After a wage decrease, the consumer's utility maximizing combination changes to point C.
-Refer to Figure 14.2. The income effect of the wage decrease on the amount of hours of leisure is:

Accepted Answer

A)  L0 to L1. 
B)  L0 to L2. 
C)  L1 to L2. 
D)  L2 to L1. 
E)  none of the above 
A)  L0 to L1. 
B)  L0 to L2. 
C)  L1 to L2. 
D)  L2 to L1. 
E)  none of the above

Question 3

Figure 14.3
A labor union is exercising monopoly power in the labor market.
-Refer to Figure 14.3. To maximize total wages paid to workers, the labor union will agree to wage rate:

Accepted Answer

A)  W0. 
B)  W1. 
C)  W2. 
D)  W3. 
E)  none of the above 
A)  W0. 
B)  W1. 
C)  W2. 
D)  W3. 
E)  none of the above

What happens to the marginal revenue product curve of a factor as more of a complementary factor is hired?

Figure 14.3 A labor union is exercising monopoly power in the labor market. -Refer to Figure 14.3. To maximize total wages paid to workers, the labor union will agree to wage rate:

Preliminaries

The Basics of Supply and Demand

Consumer Behavior

Individual and Market Demand

Uncertainty and Consumer Behavior

Production

The Cost of Production

Profit Maximization and Competitive Supply

The Analysis of Competitive Markets

Market Power: Monopoly and Monopsony

Pricing With Market Power

Monopolistic Competition and Oligopoly

Game Theory and Competitive Strategy

Investment, Time, and Capital Markets

General Equilibrium and Economic Efficiency

Markets With Asymmetric Information

Externalities and Public Goods

Filters

Exam 14: Markets for Factor Inputs

What happens to the marginal revenue product curve of a factor as more of a complementary factor is hired?

Figure 14.3 A labor union is exercising monopoly power in the labor market. -Refer to Figure 14.3. To maximize total wages paid to workers, the labor union will agree to wage rate:

Preliminaries

The Basics of Supply and Demand

Consumer Behavior

Individual and Market Demand

Uncertainty and Consumer Behavior

Production

The Cost of Production

Profit Maximization and Competitive Supply

The Analysis of Competitive Markets

Market Power: Monopoly and Monopsony

Pricing With Market Power

Monopolistic Competition and Oligopoly

Game Theory and Competitive Strategy

Investment, Time, and Capital Markets

General Equilibrium and Economic Efficiency

Markets With Asymmetric Information

Externalities and Public Goods

Filters