Exam 19: Factor Markets and the Distribution of Income

A wage ________ raises the quantity of labor supplied through the effect.

Which of the following will not shift the labor supply curve?

You overhear an economist refer to the price of leisure.What does this mean? How can leisure have a price?

A person's optimal labor supply choice:

When a firm is a perfect competitor in the product market, its demand curve for labor will ________ as the declines as additional workers are hired.

A firm's demand curve for labor will shift because of:

Mary is considering hiring another worker in an assembly line for stereo speakers.Mary knows the average product of labor is 15 speakers per day.She also believes that the next worker hired will produce an extra 12 speakers per day.A speaker sells for $10.Mary should hire another worker:

Wage differentials that arise because of innate differences in ability or talent are consistent with the marginal productivity theory of income distribution.False

One reason that wage discrimination based on gender or ethnicity could continue is:

While reading the local newspaper you notice an article about a man who won a sizable prize in the state lottery.This prize amounts to monthly payments for the rest of the man's lifetime.The man is quoted as saying, "As soon as I receive that first lottery payment, I will only work when I want to, rather than because I have to." How would an economist explain what has happened to this man's labor supply curve?

According to the __ , in a perfectly competitive economy each factor of production is paid its equilibrium value of the marginal product.

Jose, a corn farmer, pays his workers $8 an hour.At his current level of labor use, the marginal product of an additional hour of labor is three bushels of corn.The market price of corn is $2.75.In order to maximize his profits, Jose should:

Figure: The Demand for Bricklayers (Figure: The Demand for Bricklayers) Look at the figure The Demand for Bricklayers.If the equilibrium market wage for bricklayers is $80 per day, then this masonry firm will hire:

When each factor is paid an amount equal to the value of the marginal product of the last unit of that factor employed in the factor market as a whole, this is referred to as:

If a firm hires labor such that W < VMPL, then profit:

Over the past several years, the demand for phone operators has fallen dramatically.Which of the following would be a reason for this development?

Within the labor-leisure framework, when an individual's income effect is stronger than the substitution effect from a wage increase, it will result in:

Maria operates a persimmon orchard in southeastern Oklahoma.She pays her workers $248 per week to pick and process persimmons, and she sells her persimmons for $6 per bushel.If she adds one more worker and that worker can pick and process 44 bushels per week, what will be the profit for Maria from hiring that worker?

Figure: The Demand for Bricklayers (Figure: The Demand for Bricklayers) Look at the figure The Demand for Bricklayers.If the equilibrium market wage for bricklayers is $100 per day, bricklayers will be hired by this Masonry firm.

(Table: Total Product of Labor at Debbie's Bakery) Debbie owns a bakery and can hire workers to produce cakes selling in a competitive output market at $8 each.The table Total Product of Labor at Debbie's Bakery shows the relation between the number of workers and the number of cakes produced.Debbie must pay each worker a competitive market wage of $45 per day.How many workers will she hire to maximize profit?