Exam 18: Markets for Factors of Production

-Pointy Stone State Park is the sole employer of naturalists in the area. The table above provides information about the supply of naturalists and the value of marginal product of labor for naturalists. If as a result of a minimum wage law Pointy Stone State Park were required to pay its naturalists $450 per week then the employment of naturalists by Pointy Stone State Park will

The value of marginal product (VMP) of labor is the extra revenue generated by

Many autoworkers are unionized. Which of the following methods can help them achieve higher wages? I. Training that increases union members' marginal product II) A publicity campaign promoting purchase of union-made automobile

If people suddenly start to expect the price of oil to rise less rapidly than the interest rate, the demand for oil ________ and the supply of oil ________.

An auction of the leases to drill for natural gas on about 55,000 acres on the Roan Plateau in western Colorado in August 2008 generated nearly $114 million, a record for onshore energy lease sales in the lower 48 states. Is natural gas a renewable or non-renewable resource? Why?

If the interest rate is 4 percent, the present value of $10,000 to be received two years from today is about

The demand for a productive resource, not for its own sake, but for use in the production of goods and services is called a ________.

The labor supply curve is backward bending because at higher wages the income effect eventually dominates the substitution effect.

The interest rate is 5 percent. How does $500 to be received a year from today compare in value to $500 right now?

What is the value of marginal product of labor? What is the formula that can be used to calculate it? How does the value of marginal product affect how much labor a firm hires?

If the wage rate is ________ the value of marginal product, a firm can increase its profit by ________.

-Which of the following will increase the wage rate?

What factors other than the wage rate influence the demand for labor? How is demand affected by changes in these factors?

Profit is the factor price for ________.

What is the present value of $1,000 to be received 2 years in the future with an interest rate of 8 percent?

The labor supply curve has a

What is the relationship between a firm's value of marginal product curve for labor and its demand for labor curve? Explain why this relationship exists.

The hourly wage rate is the opportunity cost of one hour of leisure because

As wages rise, the substitution effect induces households to

Lynn owns Dust Bunnies, a cleaning company. In one week, she is able to clean 9 houses. If she hires an employee, together they are able to clean 15 houses per week. If Lynn charges $100 to clean a house, and she pays her employee $400 a week, should she hire this employee?