Exam 13: How Factor Markets Work

Consider labour that is hired for $18 per hour.If the last hour hired produces 8 units of output which sells for $2 per unit, ________ labour should be hired in this situation since the wage is ________ MRP.

Suppose Harrison Ford makes 2 movies per year and earns $10 million per movie.Suppose that if he werenʹt making movies his next best alternative would be to earn $500 000 per year endorsing shampoo.By making movies,Harrison Ford

Consider the following demand and supply curves in factor markets. FIGURE 13-4 -Refer to Figure 13-4.Assume that all four factor markets are labour markets.The total amount paid to the workers is ʺeconomic rentʺ in diagram

According to the hypothesis of ʺequal net advantage,ʺ

Suppose a cook at a diamond mining camp in Canadaʹs North earns a much higher wage than a cook with similar training and experience at an office building in Halifax.Economists would likely call this

Profit-maximizing firms increase production up to the point at which the last unit of the variable factor employed adds

If the supply curve for a factor is perfectly inelastic,the payments to the factor are

Consider labour hired for $18 per hour.If the last hour of labour hired produces 8 units of output which sells for $10 per unit, ________ labour should be hired in this situation since the wage is ________ MRP.

Consider labour that is hired for $18 per hour.If the last hour hired produces 8 units of output which sells for $2 per unit,that labour-hour adds ________ to the firmʹs profit and so ________ labour should be hired.

The term ʺeconomic rentʺ refers to

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm. TABLE 13-3 -Refer to Table 13-3.The total revenue obtained if the 7th unit of the factor of production is hired is

When the wage paid to workers in job A increases relative to the wage in job B,then,ceteris paribus,the

The diagram below shows the MRP curve for a firm producing copper plumbing pipe.The factor of production being considered here is hours of labour. FIGURE 13-1 -Refer to Figure 13-1.Suppose this firm initially has the marginal revenue product curve MRP1.One reason that the curve could shift to MRP3 is

The diagram below shows the MRP curve for a firm producing copper plumbing pipe.The factor of production being considered here is hours of labour. FIGURE 13-1 -Refer to Figure 13-1.Suppose this firm is facing MRP1,a wage rate of $12 per hour and is employing 150 units of labour.At this level of employment,

The marginal revenue product curve for a monopolist would be ________ its marginal product curve because ________.

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm. TABLE 13-1 -Refer to Table 13-1.The total revenue of the output produced by 12 units of the factor is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm. TABLE 13-3 -Refer to Table 13-3.A profit-maximizing firm would never hire more than the ________ unit of this factor of production.

Consider computer programmers as a factor of production. Their factor mobility is quite ________, and so to any specific firm the supply of this factor is quite ________.

Consider the following table for a firm.The first column shows the number of units of a variable factor of production employed by the firm. TABLE 13-2 -Refer to Table 13-2.Suppose the firm is a perfect competitor and faces a given price of the product equal to $2 per unit.The marginal revenue product of the 5th unit of the factor is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm. TABLE 13-3 -Refer to Table 13-3.The marginal product of the 4th unit of the factor of production is