Exam 12: The Markets for Labour and Other Factors of Production

Let MP = marginal product,P = output price,and W = wage,then the equation that represents a situation where a competitive firm should lay off some workers to maximise profits is

What is the formula you should use to determine a bank account's future value in one year?

Labour demand is considered a derived demand because producers do not demand labour for itself but only because labour is used to produce output that consumers desire.

Figure 12-3 -Refer to Figure 12-3.In Panel A,at low wages (segment i)

A firm might prefer to choose a salary system rather than a commission or piece-rate system of compensation when there are concerns about output quality.

Which of the following is not a reason for firms to choose a salary system rather than a commission system to compensate their employees?

Suppose the labour market is in equilibrium.Which of the following statements is false?

If the substitution effect of a wage increase dominates the income effect,the labour supply curve has a positive slope.

What is the difference between labour's marginal product and marginal revenue product?

Workers who dislike risk

The term 'derived demand' refers to

The total amount of copper in the earth is not increasing.Does this mean that in the market for copper,the supply curve is perfectly inelastic? Explain.

Which of the following statements is true?

Suppose a competitive firm is paying a wage of $12 an hour.Assume that labour is the only input.If hiring another worker would increase output by four units per hour,then to maximise profits the firm should

All else equal,if job turnover has people leaving jobs and finding new jobs in the same industry,this will

Companies often find it to be more profitable to use a commission or piece-rate system of compensation rather than a salary system,yet many firms continue to pay their workers salaries.List three reasons why a firm would choose a salary system of compensation.

A monopsony restricts the quantity of a factor demanded to force down the price of the factor and increase profits.

In labour economics,the term 'customer discrimination' refers to a situation where customers are charged different prices for services rendered by a firm.

The marginal product of labour curve is the demand curve for labour.

Table 12-3 Hotspur Incorporated,a manufacturer of microwave ovens,is a price taker in its input and output markets.The firm hires labour at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 12-3 shows the relationship between the quantity of labour it hires and the quantity of microwave ovens it produces. -Refer to Table 12-3.What is the amount of profit added as a result of hiring the fourth worker?