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

Consider the market for opticians.What is likely to happen to the equilibrium wage and quantity of opticians if more and more people turn to laser eye surgery instead of wearing glasses or contact lens?

The primary purpose of labour unions is to

Which of the following helps to explain why the supply curve of labour is upward sloping?

What are the three most important variables that cause the market supply curve of labour to shift?

Differences in marginal revenue products are the most important factor in explaining wage differences.Other factors that explain wage differences include all but one of the following.Which factor does not help explain differences in wages?

A firm should hire more workers to increase its profits if

The marginal product of labour is the increase in output as a result of hiring an additional worker while the marginal revenue product of labour is the increase in profit as a result of hiring an additional worker.

A firm's demand curve for labour slopes downwards because

Figure 12-1 Figure 12-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies,a producer of linen doilies. -Refer to Figure 12-1.Suppose the market price of doilies rises to $3.What happens to the curve given in the diagram?

If the income effect of a wage increase equals the substitution effect,the labour supply curve is horizontal at the equilibrium wage.

For most low-wage earners

Leisure is

A profit-maximising firm should hire workers up to the point where labour's marginal revenue product equals the wage rate.

All of the following will shift the labour supply curve except

Figure 12-4 -Refer to Figure 12-4.Which of the following is true at W₂?

Suppose you hit a progressive jackpot on a slot machine in a casino in Atlantic City and are given the choice of the following prizes: Prize 1: $150 000 to be received right away,with three additional payments of $150 000 to be received each year for the next three years. Prize 2: $500 000 to be received right away. If the interest rate is 5 per cent,what is the present value of each prize?

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labour is the only input.If the last worker hired produces four units of output per hour,then to maximise profits the firm should

Suppose the government grants child care subsidies to mothers entering the labour force.What is likely to happen to the equilibrium wage and quantity of labour?

Mel's House of Cars is an automobile dealership that sells both new and used cars.Two other dealerships located nearer Mel's pay their salespeople a straight salary-they receive no commission for each car they sell.Mel has decided to pay all of his salespeople a commission on all car sales.Which of the following is most likely to occur as a result of Mel's decision?

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