Exam 11: Input Markets and the Allocation of Resources

The marginal revenue product of labour in the local saw mill is MRPL = 20 - .5L, where L = the number of workers. If the mill hires 20 workers, what is the wage rate?

In the labour market, utility maximizing individuals:

A firm which is a competitor in its output market and a competitor in an input market is:

The labour supply curve facing a monopsonist is positively sloped because:

When the average product for labour exceeds the marginal product for labour:

The demand for labour can be expressed as Q = 10,000 - w and the supply of labour is Q = 5,000 + w where Q is total person- hours of work during the week and w is the weekly salary. What is the equilibrium weekly wage rate?

Sarah works 40 hours a week at her primary job, which pays $20 per hour. She also works 10 hours a week at McDonald's for $10 per hour. If Sarah gets a $2 per hour raise at her primary job and decides to increase her part- time work to 12 hours a week, then Leisure is a normal good for Sarah.

In general, the supply functions of primary inputs reflect the:

Andy has a utility function of U(L,C)= (LC)^1/2 where C is units of a composite consumption good (p = 1)and L is hours of leisure per day. Andy is endowed daily with 24 hours of potential working time. He is maximizing his utility at U(L,C)= 20 when he works 14 hours a day. Would he be willing to give up an hour of his leisure to drive Mrs. Doubtfire to the zoo if she offered him $5?

A perfectly competitive firm is producing at a positive level of output using two resources in the price of one of those resources rises

A firm which is a competitor in its output market and a monopsonist in an input market is:

A firm will not employ an input if its wage is greater than its maximum:

If a firm is a monopsonist, it will hire an input when:

Donna's schmoo firm uses one input, z, and she sells her output at $10 per unit. The marginal product of z is 10 - z and the price of z is $20 per unit. The profit maximizing quantity of z is:

For a firm which is a perfect competitor in its input markets, in long- run equilibrium:

In the labour market, utility maximizing individuals are constrained by:

The price of leisure:

Investment in training is called:

A firm's downward sloping demand for an input is determined by the:

Jennifer has the following utility function: U(C, L)= (CL)^1/2 where C is the quantity of goods consumed and L is the number of hours of leisure. Jennifer requires eight hours of rest each day. Therefore she has 16 hours available for work. Let H be the number of hours employed such that H = 16 - L. Let P be the price of C and W be the hourly wage. Assume she is required to pay an income tax of T = 0.3( Y - 60)where Y is her pretax income. How many hours per day will she work at P = $1 and W = $10?