Exam 18: Markets for Factors of Production

-Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $5, what is the value of marginal product of the 4th worker?

A monopsony is

-In the table above, the marginal product of the third unit of labor is ________ units of output.

A firm's demand for labor curve

-Consider the monopsony in the above figure. The monopsony will pay a hourly wage rate equal to

For the past year, Teddy has had a part-time job at which he is willing to work 30 hours each week. During Teddy's annual review, his boss grants him an 8 percent increase in his wage. As a result of the wage increase, Teddy is now willing to work 25 hours each week. Teddy's opportunity cost of ________ has risen and because for Teddy the substitution effect of the wage hike is ________ than the income effect.

A firm's price rises. As a result, the

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.

A monopsony pays a wage rate that is

-Which of the following will increase the wage rate?

Usually the demand for labor decreases (that is, the demand for labor curve shifts leftward) if the

To maximize its profit, a firm will hire more workers as long as

For a nonrenewable natural resource, such as oil, the equilibrium price ________ the market fundamentals price.

If the price of a barrel of oil is $100 this year and the interest rate is 10 percent, then according to the Hotelling Principle the price next year is expected to be ________ per barrel.

-City-Mart is the only employer of sales clerks in Panburg. In the figure above S is the labor supply curve faced by City-Mart, VMP is City-Mart's value of marginal product curve, and MCL is its marginal cost of labor curve. If the market for sales clerks' labor in Panburg were competitive, the wage rate would be ________ per hour, and ________ hours of labor would be hired.

The income effect of a higher wage rate results in a I. higher income as people work more. II) person choosing to decrease work hours as income increases. III) backward-bending labor supply curve.

The marginal cost of labor, MCL, is defined as the

If the interest rate increases from 5 percent to 7 percent, the present value of a future payment

A company finds that for the next worker hired, the worker's VMP is less than the cost of the worker. In this case, to maximize its profit the company should

Which of the following would unions be most likely to support?