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Deck 17: The Markets for Labor and Other Factors of Production
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Question
Table 17-1
Refer to Table 17-1.Suppose the output price is $3.If the wage rate is $90, what is the profit-maximizing quantity of labor that the firm should hire?
A)7 units
B)5 units
C)4 units
D)3 units
Refer to Table 17-1.Suppose the output price is $3.If the wage rate is $90, what is the profit-maximizing quantity of labor that the firm should hire?
A)7 units
B)5 units
C)4 units
D)3 units
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Figure 17-1
Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies.
Refer to Figure 17-1.Suppose the market price of doilies rises to $3.What happens to the curve given in the diagram?
A)Nothing, because labor's productivity has not changed.
B)There will be a movement along the curve.
C)The curve shifts to the right.
D)We cannot answer the question without knowing if Dale would want to hire more workers.
Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies.
Refer to Figure 17-1.Suppose the market price of doilies rises to $3.What happens to the curve given in the diagram?
A)Nothing, because labor's productivity has not changed.
B)There will be a movement along the curve.
C)The curve shifts to the right.
D)We cannot answer the question without knowing if Dale would want to hire more workers.
Question
Figure 17-1
Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies.
Refer to Figure 17-1.If the wage rate is $40, how many workers should Dale hire?
A)6
B)5
C)4
D)3
Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies.
Refer to Figure 17-1.If the wage rate is $40, how many workers should Dale hire?
A)6
B)5
C)4
D)3
Question
Table 17-1
Refer to Table 17-1.Suppose the output price is $3.If the firm represented in the table is maximizing its profit by hiring six workers, what is the wage rate?
A)$120
B)$65
C)$40
D)There is insufficient information to answer the question.
Refer to Table 17-1.Suppose the output price is $3.If the firm represented in the table is maximizing its profit by hiring six workers, what is the wage rate?
A)$120
B)$65
C)$40
D)There is insufficient information to answer the question.
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Table 17-1
Refer to Table 17-1.If the output price is $3, what is the marginal revenue product of the fifth unit of labor?
A)$1,050
B)$360
C)$210
D)$150
Refer to Table 17-1.If the output price is $3, what is the marginal revenue product of the fifth unit of labor?
A)$1,050
B)$360
C)$210
D)$150
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Figure 17-1
Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies.
Refer to Figure 17-1.If Dale can sell her doilies at $2 each, what is the marginal product of the 5th worker?
A)$28
B)28 doilies
C)14 doilies
D)$56
Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies.
Refer to Figure 17-1.If Dale can sell her doilies at $2 each, what is the marginal product of the 5th worker?
A)$28
B)28 doilies
C)14 doilies
D)$56
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Table 17-1
Refer to Table 17-1.The marginal product of the fourth unit of labor is
A)300.
B)75.
C)60.
D)15.
Refer to Table 17-1.The marginal product of the fourth unit of labor is
A)300.
B)75.
C)60.
D)15.
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Table 17-2
Refer to Table 17-2.What is the profit-maximizing quantity of labor that the firm should hire?
A)5 units
B)4 units
C)3 units
D)2 units
Refer to Table 17-2.What is the profit-maximizing quantity of labor that the firm should hire?
A)5 units
B)4 units
C)3 units
D)2 units
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Table 17-2
Refer to Table 17-2.The marginal profit from hiring the second unit of labor is
A)$4,200.
B)$1,960.
C)$1,800.
D)$1,450.
Refer to Table 17-2.The marginal profit from hiring the second unit of labor is
A)$4,200.
B)$1,960.
C)$1,800.
D)$1,450.
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Table 17-2
Refer to Table 17-2.The marginal revenue product of labor from the third unit of labor is
A)$5,460.
B)$1,560.
C)$1,260.
D)$780.
Refer to Table 17-2.The marginal revenue product of labor from the third unit of labor is
A)$5,460.
B)$1,560.
C)$1,260.
D)$780.
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Table 17-2
Refer to Table 17-2.The firm represented in the diagram
A)has market power in the factor market.
B)has market power in the output market.
C)has market power in both the factor and product market.
D)has no market power in the factor or product market.
Refer to Table 17-2.The firm represented in the diagram
A)has market power in the factor market.
B)has market power in the output market.
C)has market power in both the factor and product market.
D)has no market power in the factor or product market.
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Figure 17-2
Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
Refer to Figure 17-2.If Becca can sell her bracelets at $3 each, what is the marginal product of the 4th worker?
A)$36
B)12 bracelets
C)36 bracelets
D)$144
Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
Refer to Figure 17-2.If Becca can sell her bracelets at $3 each, what is the marginal product of the 4th worker?
A)$36
B)12 bracelets
C)36 bracelets
D)$144
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Figure 17-2
Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
Refer to Figure 17-2.If the wage rate is $20, how many workers should Becca hire?
A)6
B)5
C)4
D)3
Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
Refer to Figure 17-2.If the wage rate is $20, how many workers should Becca hire?
A)6
B)5
C)4
D)3
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Table 17-3
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces.
Refer to Table 17-3.What is the amount of profit added as a result of hiring the fourth worker?
A)$7,200
B)$1,200
C)$800
D)$400
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces.
Refer to Table 17-3.What is the amount of profit added as a result of hiring the fourth worker?
A)$7,200
B)$1,200
C)$800
D)$400
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Figure 17-2
Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
Refer to Figure 17-2.Suppose the market price of bracelets falls to $2.What happens to the curve given in the diagram?
A)Nothing, because labor's productivity has not changed.
B)There will be a movement along the curve.
C)The curve shifts to the left.
D)We cannot answer the question without knowing if Becca would want to hire more workers.
Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
Refer to Figure 17-2.Suppose the market price of bracelets falls to $2.What happens to the curve given in the diagram?
A)Nothing, because labor's productivity has not changed.
B)There will be a movement along the curve.
C)The curve shifts to the left.
D)We cannot answer the question without knowing if Becca would want to hire more workers.
Question
Table 17-3
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces.
Refer to Table 17-3.What is Hotspur's profit maximizing quantity of labor?
A)2 workers
B)3 workers
C)5 workers
D)6 workers
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces.
Refer to Table 17-3.What is Hotspur's profit maximizing quantity of labor?
A)2 workers
B)3 workers
C)5 workers
D)6 workers
Question
Table 17-3
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces.
Refer to Table 17-3.What is the amount of revenue added as a result of hiring the fourth worker?
A)$1,200
B)$7,200
C)15 microwaves
D)90 microwaves
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces.
Refer to Table 17-3.What is the amount of revenue added as a result of hiring the fourth worker?
A)$1,200
B)$7,200
C)15 microwaves
D)90 microwaves
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Table 17-4
Table 17-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4.What are the quantity of labor and marginal revenue product of labor that will maximize the profit Apple would earn from selling iPods?
A)2; $160
B)3; $340
C)2; $680
D)3; $140
Table 17-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4.What are the quantity of labor and marginal revenue product of labor that will maximize the profit Apple would earn from selling iPods?
A)2; $160
B)3; $340
C)2; $680
D)3; $140
Question
Table 17-4
Table 17-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4.What are the price and quantity of workers that result in the maximum amount of profit Apple would earn from selling iPods?
A)$140; 2
B)$160; 2
C)$140; 3
D)$180; 1
Table 17-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4.What are the price and quantity of workers that result in the maximum amount of profit Apple would earn from selling iPods?
A)$140; 2
B)$160; 2
C)$140; 3
D)$180; 1
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Table 17-4
Table 17-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4.What are the price and quantity of workers that result in the maximum amount of revenue Apple would earn from selling iPods?
A)$180; 1
B)$140; 2
C)$120; 2
D)$120; 4
Table 17-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4.What are the price and quantity of workers that result in the maximum amount of revenue Apple would earn from selling iPods?
A)$180; 1
B)$140; 2
C)$120; 2
D)$120; 4
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Deck 17: The Markets for Labor and Other Factors of Production
1
Table 17-1
Refer to Table 17-1.Suppose the output price is $3.If the wage rate is $90, what is the profit-maximizing quantity of labor that the firm should hire?
A)7 units
B)5 units
C)4 units
D)3 units
Refer to Table 17-1.Suppose the output price is $3.If the wage rate is $90, what is the profit-maximizing quantity of labor that the firm should hire?
A)7 units
B)5 units
C)4 units
D)3 units
A
2
Rio Tinto's incentive to adopt new robotic technology was increased by the high wages it was having to pay to attract miners and truck drivers.In this instance, Rio Tinto began using new robotic technology to
A)add capital as a complementary resource for its labor.
B)substitute labor for capital in production.
C)substitute capital for labor in production.
D)add labor as a complementary resource for its capital.
A)add capital as a complementary resource for its labor.
B)substitute labor for capital in production.
C)substitute capital for labor in production.
D)add labor as a complementary resource for its capital.
C
3
Figure 17-1
Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies.
Refer to Figure 17-1.Suppose the market price of doilies rises to $3.What happens to the curve given in the diagram?
A)Nothing, because labor's productivity has not changed.
B)There will be a movement along the curve.
C)The curve shifts to the right.
D)We cannot answer the question without knowing if Dale would want to hire more workers.
Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies.
Refer to Figure 17-1.Suppose the market price of doilies rises to $3.What happens to the curve given in the diagram?
A)Nothing, because labor's productivity has not changed.
B)There will be a movement along the curve.
C)The curve shifts to the right.
D)We cannot answer the question without knowing if Dale would want to hire more workers.
C
4
Figure 17-1
Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies.
Refer to Figure 17-1.If the wage rate is $40, how many workers should Dale hire?
A)6
B)5
C)4
D)3
Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies.
Refer to Figure 17-1.If the wage rate is $40, how many workers should Dale hire?
A)6
B)5
C)4
D)3
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5
Table 17-1
Refer to Table 17-1.Suppose the output price is $3.If the firm represented in the table is maximizing its profit by hiring six workers, what is the wage rate?
A)$120
B)$65
C)$40
D)There is insufficient information to answer the question.
Refer to Table 17-1.Suppose the output price is $3.If the firm represented in the table is maximizing its profit by hiring six workers, what is the wage rate?
A)$120
B)$65
C)$40
D)There is insufficient information to answer the question.
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6
Suppose you have worked at a local sandwich shop for six months and now you plan to ask your manager for a raise.How can you convince your manager that you are worth more money than you are currently being paid?
A)by threatening to quit if he refuses to give you a raise
B)by demonstrating to your manager the marginal revenue product your employment contributes to the sandwich shop
C)by explaining to him how difficult it is for you to save enough money to go to college
D)by convincing him that you are a dedicated worker and ready to take on more responsibilities at the shop
A)by threatening to quit if he refuses to give you a raise
B)by demonstrating to your manager the marginal revenue product your employment contributes to the sandwich shop
C)by explaining to him how difficult it is for you to save enough money to go to college
D)by convincing him that you are a dedicated worker and ready to take on more responsibilities at the shop
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7
Table 17-1
Refer to Table 17-1.If the output price is $3, what is the marginal revenue product of the fifth unit of labor?
A)$1,050
B)$360
C)$210
D)$150
Refer to Table 17-1.If the output price is $3, what is the marginal revenue product of the fifth unit of labor?
A)$1,050
B)$360
C)$210
D)$150
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8
A firm's primary interest when it hires an additional worker is
A)the cost of hiring the additional worker.
B)how the average output of the firm will be affected by this new worker.
C)the extra revenue the firm realizes from hiring that worker.
D)whether or not the new worker gets along with the firm's existing workers.
A)the cost of hiring the additional worker.
B)how the average output of the firm will be affected by this new worker.
C)the extra revenue the firm realizes from hiring that worker.
D)whether or not the new worker gets along with the firm's existing workers.
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9
What is the difference between a firm's marginal revenue and its marginal revenue product?
A)Marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the profit earned from hiring one more worker.
B)Marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the change in total revenue from hiring one more worker.
C)Marginal revenue is the increase in revenue when a firm raises its output price while marginal revenue product is the increase in marginal product when a firm hires an additional worker.
D)There is no difference between the two terms.
A)Marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the profit earned from hiring one more worker.
B)Marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the change in total revenue from hiring one more worker.
C)Marginal revenue is the increase in revenue when a firm raises its output price while marginal revenue product is the increase in marginal product when a firm hires an additional worker.
D)There is no difference between the two terms.
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10
Rio Tinto was able to introduce robotic machines into its mining operations because of developments in computer technology, the Global Positioning System (GPS), and robotics.The company's mining operations are an example of ________, in which devices directly communicate data to a computer without a person having to enter the data.
A)the Internet of Things
B)the use of Big Data
C)Artificial Intelligence
D)Technological Singularity
A)the Internet of Things
B)the use of Big Data
C)Artificial Intelligence
D)Technological Singularity
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11
Marginal revenue product for a perfectly competitive seller is equal to
A)the output price multiplied by the total product of labor.
B)the output price multiplied by the number workers hired.
C)the change in total revenue that results from hiring another worker.
D)the marginal cost of production.
A)the output price multiplied by the total product of labor.
B)the output price multiplied by the number workers hired.
C)the change in total revenue that results from hiring another worker.
D)the marginal cost of production.
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12
Firms use information on labor's marginal revenue product to determine
A)how much to produce at each output price.
B)how many workers to hire at each wage rate.
C)how much marginal product to produce at each wage rate.
D)how much labor services to supply at each wage rate.
A)how much to produce at each output price.
B)how many workers to hire at each wage rate.
C)how much marginal product to produce at each wage rate.
D)how much labor services to supply at each wage rate.
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13
The demand for labor is described as a derived demand because
A)it is derived by workers seeking to earn income to fund the consumption of goods and services.
B)it is derived by producers seeking to make profits by starting new businesses.
C)it is derived from the demand for products that use labor in the production process.
D)it is derived from government institutions which rely on labor markets for the purpose of raising tax revenue.
A)it is derived by workers seeking to earn income to fund the consumption of goods and services.
B)it is derived by producers seeking to make profits by starting new businesses.
C)it is derived from the demand for products that use labor in the production process.
D)it is derived from government institutions which rely on labor markets for the purpose of raising tax revenue.
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14
Which of the following is not an example of a derived demand?
A)Several of the animated films released between 1999 and 2001 failed to earn a profit, which caused some companies to stop making these films, thereby decreasing the demand for animators.
B)Seth Bullock, a personal-injury attorney, complains that he is earning far less now than a few years ago largely because personal injury cases have been undercut by state laws limiting class-action suits and payouts on damages.
C)Millicent Manning, the owner of a furniture store, is concerned that her sales have fallen for the past six months. She attributes this to the downturn in the real estate market.
D)As advancements in medical technology increase the safety and success of laser eye surgery, the demand for opticians has decreased.
A)Several of the animated films released between 1999 and 2001 failed to earn a profit, which caused some companies to stop making these films, thereby decreasing the demand for animators.
B)Seth Bullock, a personal-injury attorney, complains that he is earning far less now than a few years ago largely because personal injury cases have been undercut by state laws limiting class-action suits and payouts on damages.
C)Millicent Manning, the owner of a furniture store, is concerned that her sales have fallen for the past six months. She attributes this to the downturn in the real estate market.
D)As advancements in medical technology increase the safety and success of laser eye surgery, the demand for opticians has decreased.
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15
A firm's demand for labor curve is also called its
A)marginal revenue product of labor curve.
B)marginal factor cost of labor curve.
C)marginal valuation curve.
D)marginal benefit of labor curve.
A)marginal revenue product of labor curve.
B)marginal factor cost of labor curve.
C)marginal valuation curve.
D)marginal benefit of labor curve.
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16
Figure 17-1
Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies.
Refer to Figure 17-1.If Dale can sell her doilies at $2 each, what is the marginal product of the 5th worker?
A)$28
B)28 doilies
C)14 doilies
D)$56
Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies.
Refer to Figure 17-1.If Dale can sell her doilies at $2 each, what is the marginal product of the 5th worker?
A)$28
B)28 doilies
C)14 doilies
D)$56
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17
What is the difference between labor's marginal product and marginal revenue product?
A)The marginal product of labor is the increase in output as a result of hiring an additional worker while the marginal revenue product of labor is the increase in profit as a result of hiring an additional worker.
B)The marginal revenue product of labor is the dollar value of hiring an additional worker while the marginal product of labor is the increase in the firm's physical output as a result of hiring an additional worker.
C)The marginal product of labor is the additional labor's contribution to the firm's total output while the marginal revenue product is the additional labor's contribution to the firm's total sales revenue.
D)Labor's marginal product is a measure of labor's productivity while labor's marginal revenue product is a measure of labor's ability to sell the firm's products.
A)The marginal product of labor is the increase in output as a result of hiring an additional worker while the marginal revenue product of labor is the increase in profit as a result of hiring an additional worker.
B)The marginal revenue product of labor is the dollar value of hiring an additional worker while the marginal product of labor is the increase in the firm's physical output as a result of hiring an additional worker.
C)The marginal product of labor is the additional labor's contribution to the firm's total output while the marginal revenue product is the additional labor's contribution to the firm's total sales revenue.
D)Labor's marginal product is a measure of labor's productivity while labor's marginal revenue product is a measure of labor's ability to sell the firm's products.
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18
Table 17-1
Refer to Table 17-1.The marginal product of the fourth unit of labor is
A)300.
B)75.
C)60.
D)15.
Refer to Table 17-1.The marginal product of the fourth unit of labor is
A)300.
B)75.
C)60.
D)15.
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19
A reason why a perfectly competitive firm's demand for labor curve slopes downward is that
A)each additional unit of labor hired is less efficient than previously hired units.
B)in the short run, as more labor is hired, labor's marginal product falls because of the law of diminishing returns.
C)the extra cost of hiring additional units of labor increases as a firm hires more units of labor.
D)the firm's demand curve for the product that uses labor is downward sloping.
A)each additional unit of labor hired is less efficient than previously hired units.
B)in the short run, as more labor is hired, labor's marginal product falls because of the law of diminishing returns.
C)the extra cost of hiring additional units of labor increases as a firm hires more units of labor.
D)the firm's demand curve for the product that uses labor is downward sloping.
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20
Marginal revenue product of labor for a competitive seller is
A)the change in total product from hiring one more worker.
B)equal to the marginal product of labor multiplied by the output price.
C)the output price multiplied by the quantity sold.
D)the marginal revenue of the product multiplied by the output price.
A)the change in total product from hiring one more worker.
B)equal to the marginal product of labor multiplied by the output price.
C)the output price multiplied by the quantity sold.
D)the marginal revenue of the product multiplied by the output price.
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21
A decrease in the wage rate causes
A)an increase in the quantity of labor demanded.
B)a rightward shift of the firm's labor demand curve.
C)a leftward shift of the firm's labor demand curve.
D)a decrease in labor's productivity.
A)an increase in the quantity of labor demanded.
B)a rightward shift of the firm's labor demand curve.
C)a leftward shift of the firm's labor demand curve.
D)a decrease in labor's productivity.
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22
Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labor is the only input.If the last worker hired increases output by three units per hour, then to maximize profits the firm should
A)not change the number of workers it currently hires.
B)lay off some of its workers.
C)hire additional workers.
D)There is not enough information to answer the question.
A)not change the number of workers it currently hires.
B)lay off some of its workers.
C)hire additional workers.
D)There is not enough information to answer the question.
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23
An increase in a perfectly competitive firm's demand for labor could be caused by
A)a decrease in the market wage rate.
B)an increase in the market demand for the firm's product.
C)a decrease in the marginal product of workers.
D)an increase in the quantity of labor supplied.
A)a decrease in the market wage rate.
B)an increase in the market demand for the firm's product.
C)a decrease in the marginal product of workers.
D)an increase in the quantity of labor supplied.
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24
Article Summary
Addressing his Conservative party in October 2015, British Prime Minister David Cameron called for a major overhaul of the country's public school system by endorsing a nationwide conversion to charter-type public schools called academies while also urging current and would-be educators across the country to create small, new academies known as free schools. In a nationally televised broadcast, Cameron stated "So my next ambition is this - five hundred new free schools. Every school an academy…and yes - local authorities running schools a thing of the past." Cameron believes that the current system denies opportunities to British children, and the country will not continue to thrive unless it greatly improves the talent and experience of its younger generation.
Source: Campbell Brown, " Education Reform: Why America Needs a David Cameron," thedailybeast.com, October 16, 2015.
Refer to the Article Summary above.The article addresses proposed British education reform by way of a completely revised public school system to improve the talent and experience of students.If these reforms lead to a more skilled and better trained public, the British economy would experience
A)an increase in human capital.
B)an increase in the supply of labor.
C)an increase in comparable worth.
D)a decrease in compensating differentials.
Addressing his Conservative party in October 2015, British Prime Minister David Cameron called for a major overhaul of the country's public school system by endorsing a nationwide conversion to charter-type public schools called academies while also urging current and would-be educators across the country to create small, new academies known as free schools. In a nationally televised broadcast, Cameron stated "So my next ambition is this - five hundred new free schools. Every school an academy…and yes - local authorities running schools a thing of the past." Cameron believes that the current system denies opportunities to British children, and the country will not continue to thrive unless it greatly improves the talent and experience of its younger generation.
Source: Campbell Brown, " Education Reform: Why America Needs a David Cameron," thedailybeast.com, October 16, 2015.
Refer to the Article Summary above.The article addresses proposed British education reform by way of a completely revised public school system to improve the talent and experience of students.If these reforms lead to a more skilled and better trained public, the British economy would experience
A)an increase in human capital.
B)an increase in the supply of labor.
C)an increase in comparable worth.
D)a decrease in compensating differentials.
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25
Let MP = marginal product, P = output price, and W = wage, then the equation that represents the condition where a competitive firm would hire another worker is
A)P × MP = W.
B)P × MP < W.
C)P × MP > W.
D)P × W > MP.
A)P × MP = W.
B)P × MP < W.
C)P × MP > W.
D)P × W > MP.
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26
Which of the following will not cause the labor demand curve to shift to the right?
A)an increase in the price of the firm's product
B)a technological improvement that increases labor productivity
C)an increase in human capital in the labor force
D)an increase in the market wage rate
A)an increase in the price of the firm's product
B)a technological improvement that increases labor productivity
C)an increase in human capital in the labor force
D)an increase in the market wage rate
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27
Marginal revenue product can be calculated using the formula marginal product × output price
A)only if output price is constant.
B)only if the marginal product of labor is constant.
C)only if the both marginal product of labor and the output price are constant.
D)only if the firm has market power in the labor market.
A)only if output price is constant.
B)only if the marginal product of labor is constant.
C)only if the both marginal product of labor and the output price are constant.
D)only if the firm has market power in the labor market.
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28
Table 17-2
Refer to Table 17-2.What is the profit-maximizing quantity of labor that the firm should hire?
A)5 units
B)4 units
C)3 units
D)2 units
Refer to Table 17-2.What is the profit-maximizing quantity of labor that the firm should hire?
A)5 units
B)4 units
C)3 units
D)2 units
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29
Table 17-2
Refer to Table 17-2.The marginal profit from hiring the second unit of labor is
A)$4,200.
B)$1,960.
C)$1,800.
D)$1,450.
Refer to Table 17-2.The marginal profit from hiring the second unit of labor is
A)$4,200.
B)$1,960.
C)$1,800.
D)$1,450.
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30
If a worker can produce 20 units of output which can be sold for $4 per unit, what is the maximum wage that firm should pay to hire this worker?
A)$80
B)$80 minus the firm's profit markup
C)It depends on what the going wage rate is in the labor market.
D)There is insufficient information to answer the question.
A)$80
B)$80 minus the firm's profit markup
C)It depends on what the going wage rate is in the labor market.
D)There is insufficient information to answer the question.
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31
In the legal sector, some practice areas have declined in recent years.For example, personal-injury and medical-malpractice cases have been undercut by state laws limiting class-action suits, out-of-state plaintiffs, and payouts on damages, and securities class-action litigation has declined in part because of a buoyant stock market.How does this affect the market for lawyers?
A)The demand for lawyers shifts to the left.
B)The supply of lawyers shifts to the left.
C)The quantity of lawyers demanded decreases and this is represented by a movement along the demand curve.
D)Both the demand and supply curves decrease.
A)The demand for lawyers shifts to the left.
B)The supply of lawyers shifts to the left.
C)The quantity of lawyers demanded decreases and this is represented by a movement along the demand curve.
D)Both the demand and supply curves decrease.
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32
Table 17-2
Refer to Table 17-2.The marginal revenue product of labor from the third unit of labor is
A)$5,460.
B)$1,560.
C)$1,260.
D)$780.
Refer to Table 17-2.The marginal revenue product of labor from the third unit of labor is
A)$5,460.
B)$1,560.
C)$1,260.
D)$780.
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33
Major League Baseball teams are similar to other firms in that they use factors of production to produce a product (baseball games).An example of capital used by teams to produce their products is
A)the money teams earn from television contracts and ticket sales.
B)the land on which baseball games are played.
C)the labor of baseball players.
D)the ballparks where the games are played.
A)the money teams earn from television contracts and ticket sales.
B)the land on which baseball games are played.
C)the labor of baseball players.
D)the ballparks where the games are played.
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34
Table 17-2
Refer to Table 17-2.The firm represented in the diagram
A)has market power in the factor market.
B)has market power in the output market.
C)has market power in both the factor and product market.
D)has no market power in the factor or product market.
Refer to Table 17-2.The firm represented in the diagram
A)has market power in the factor market.
B)has market power in the output market.
C)has market power in both the factor and product market.
D)has no market power in the factor or product market.
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35
Article Summary
Addressing his Conservative party in October 2015, British Prime Minister David Cameron called for a major overhaul of the country's public school system by endorsing a nationwide conversion to charter-type public schools called academies while also urging current and would-be educators across the country to create small, new academies known as free schools. In a nationally televised broadcast, Cameron stated "So my next ambition is this - five hundred new free schools. Every school an academy…and yes - local authorities running schools a thing of the past." Cameron believes that the current system denies opportunities to British children, and the country will not continue to thrive unless it greatly improves the talent and experience of its younger generation.
Source: Campbell Brown, " Education Reform: Why America Needs a David Cameron," thedailybeast.com, October 16, 2015.
Refer to the Article Summary above.The article addresses proposed British education reform by way of a completely revised public school system to improve the talent and experience of students.Education reform could lead to a more skilled and better trained public.A more skilled and better trained public would
A)cause the market supply curve for labor to shift to the right.
B)cause the market demand curve for labor to shift to the right.
C)not shift the market demand curve for labor.
D)cause both the market demand curve for labor and the market supply curve for labor to shift to the left.
Addressing his Conservative party in October 2015, British Prime Minister David Cameron called for a major overhaul of the country's public school system by endorsing a nationwide conversion to charter-type public schools called academies while also urging current and would-be educators across the country to create small, new academies known as free schools. In a nationally televised broadcast, Cameron stated "So my next ambition is this - five hundred new free schools. Every school an academy…and yes - local authorities running schools a thing of the past." Cameron believes that the current system denies opportunities to British children, and the country will not continue to thrive unless it greatly improves the talent and experience of its younger generation.
Source: Campbell Brown, " Education Reform: Why America Needs a David Cameron," thedailybeast.com, October 16, 2015.
Refer to the Article Summary above.The article addresses proposed British education reform by way of a completely revised public school system to improve the talent and experience of students.Education reform could lead to a more skilled and better trained public.A more skilled and better trained public would
A)cause the market supply curve for labor to shift to the right.
B)cause the market demand curve for labor to shift to the right.
C)not shift the market demand curve for labor.
D)cause both the market demand curve for labor and the market supply curve for labor to shift to the left.
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36
Suppose a competitive firm pays a wage of $12 an hour and sells its product at $3 per unit.Assume that labor is the only input.If hiring another worker would increase output by five units per hour, then to maximize profits the firm should
A)not change the number of workers it currently hires.
B)lay off some of its workers.
C)hire the additional worker.
D)There is not enough information to answer the question.
A)not change the number of workers it currently hires.
B)lay off some of its workers.
C)hire the additional worker.
D)There is not enough information to answer the question.
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37
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 maximize profits is
A)P × MP = W.
B)P × MP > W.
C)P × MP < W.
D)MP × W = P.
A)P × MP = W.
B)P × MP > W.
C)P × MP < W.
D)MP × W = P.
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38
The firm's gain in profit from hiring another worker is
A)the marginal revenue product of the extra worker.
B)the difference between marginal revenue product and the wage of the worker.
C)the extra output of the extra worker.
D)the reduction in costs from hiring another worker.
A)the marginal revenue product of the extra worker.
B)the difference between marginal revenue product and the wage of the worker.
C)the extra output of the extra worker.
D)the reduction in costs from hiring another worker.
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39
An increase in the wage rate causes
A)a rightward shift of the firm's labor demand curve.
B)a leftward shift of the firm's labor demand curve.
C)a decrease in the quantity of labor demanded.
D)an increase in labor's marginal productivity.
A)a rightward shift of the firm's labor demand curve.
B)a leftward shift of the firm's labor demand curve.
C)a decrease in the quantity of labor demanded.
D)an increase in labor's marginal productivity.
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40
Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labor is the only input.If hiring another worker would increase output by three units per hour, then to maximize profits the firm should
A)not change the number of workers it currently hires.
B)not hire an additional worker.
C)hire another worker.
D)There is not enough information to answer the question.
A)not change the number of workers it currently hires.
B)not hire an additional worker.
C)hire another worker.
D)There is not enough information to answer the question.
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41
Holding the price of a firm's output constant, if the marginal product of labor increases
A)the marginal revenue product of labor decreases.
B)the marginal revenue product of labor also increases.
C)the marginal products of other inputs also increase.
D)the marginal revenue product of labor may increase or decrease.
A)the marginal revenue product of labor decreases.
B)the marginal revenue product of labor also increases.
C)the marginal products of other inputs also increase.
D)the marginal revenue product of labor may increase or decrease.
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42
Figure 17-2
Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
Refer to Figure 17-2.If Becca can sell her bracelets at $3 each, what is the marginal product of the 4th worker?
A)$36
B)12 bracelets
C)36 bracelets
D)$144
Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
Refer to Figure 17-2.If Becca can sell her bracelets at $3 each, what is the marginal product of the 4th worker?
A)$36
B)12 bracelets
C)36 bracelets
D)$144
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43
The marginal product of labor is
A)the payment made to workers for their contribution to the output they produce.
B)equal to the demand for labor.
C)the change in a firm's revenue as a result of hiring one more worker.
D)the additional output a firm produces as a result of hiring one more worker.
A)the payment made to workers for their contribution to the output they produce.
B)equal to the demand for labor.
C)the change in a firm's revenue as a result of hiring one more worker.
D)the additional output a firm produces as a result of hiring one more worker.
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44
The term "derived demand" refers to
A)the demand for financial products called derivatives.
B)the demand for a factor of production that is derived from the demand for the good the factor produces.
C)a firm's estimated demand curve derived from sales data.
D)a demand curve that derives from the availability of resources.
A)the demand for financial products called derivatives.
B)the demand for a factor of production that is derived from the demand for the good the factor produces.
C)a firm's estimated demand curve derived from sales data.
D)a demand curve that derives from the availability of resources.
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45
Hotspur Incorporated, a manufacturer of microwaves, is a price taker in both the input and output markets.To maximize its profit, Hotspur will hire labor up to the point where
A)the marginal product of labor is no longer positive.
B)all economies of scale have been exhausted.
C)the marginal revenue product of labor equals the wage rate.
D)the marginal revenue product of labor equals the output price.
A)the marginal product of labor is no longer positive.
B)all economies of scale have been exhausted.
C)the marginal revenue product of labor equals the wage rate.
D)the marginal revenue product of labor equals the output price.
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46
The demand curve for labor is also
A)the demand curve for the output produced with labor since the demand for labor is a derived demand.
B)the marginal product of labor curve.
C)the marginal revenue product of labor curve.
D)the supply curve for the output labor is used to produce.
A)the demand curve for the output produced with labor since the demand for labor is a derived demand.
B)the marginal product of labor curve.
C)the marginal revenue product of labor curve.
D)the supply curve for the output labor is used to produce.
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47
What is a factor market?
A)It is a market where financial instruments are traded.
B)It is a market where stocks and bonds are traded.
C)It is a market where producers buy consumption and capital goods.
D)It is a market where resources used to produce final goods are traded.
A)It is a market where financial instruments are traded.
B)It is a market where stocks and bonds are traded.
C)It is a market where producers buy consumption and capital goods.
D)It is a market where resources used to produce final goods are traded.
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48
The change in a firm's revenue as a result of hiring one more worker
A)is the definition of the marginal product of labor.
B)is equal to the firm's marginal cost.
C)is the definition of the marginal revenue product of labor.
D)will be negative if the demand for the firm's output is inelastic.
A)is the definition of the marginal product of labor.
B)is equal to the firm's marginal cost.
C)is the definition of the marginal revenue product of labor.
D)will be negative if the demand for the firm's output is inelastic.
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49
Marginal revenue product falls as more labor is hired because
A)the price of the product must fall for a perfectly competitive firm to sell more.
B)the wage rate rises as more workers work more hours.
C)the marginal product of labor is negative as additional units of labor are hired.
D)the marginal product of labor falls as a result of the law of diminishing returns.
A)the price of the product must fall for a perfectly competitive firm to sell more.
B)the wage rate rises as more workers work more hours.
C)the marginal product of labor is negative as additional units of labor are hired.
D)the marginal product of labor falls as a result of the law of diminishing returns.
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50
As more output is produced, the marginal product of labor declines
A)because of the law of diminishing returns.
B)if firms reduce the wage paid to labor.
C)if the firm's output supply curve is inelastic.
D)because the firm's marginal revenue declines.
A)because of the law of diminishing returns.
B)if firms reduce the wage paid to labor.
C)if the firm's output supply curve is inelastic.
D)because the firm's marginal revenue declines.
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51
The marginal revenue product of labor is defined as
A)the change in the firm's revenue as a result of selling one more unit of output.
B)the change in the firm's output as a result of hiring one more worker.
C)the change in the firm's profit as a result of hiring one more worker.
D)the change in the firm's revenue as a result of hiring one more worker.
A)the change in the firm's revenue as a result of selling one more unit of output.
B)the change in the firm's output as a result of hiring one more worker.
C)the change in the firm's profit as a result of hiring one more worker.
D)the change in the firm's revenue as a result of hiring one more worker.
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52
Figure 17-2
Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
Refer to Figure 17-2.If the wage rate is $20, how many workers should Becca hire?
A)6
B)5
C)4
D)3
Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
Refer to Figure 17-2.If the wage rate is $20, how many workers should Becca hire?
A)6
B)5
C)4
D)3
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53
An increase in the demand for orthodontic services leads to
A)an increase in the supply of orthodontists.
B)lower prices for orthodontic care.
C)an increase in the demand for orthodontists.
D)a rise in the rates of dental insurance.
A)an increase in the supply of orthodontists.
B)lower prices for orthodontic care.
C)an increase in the demand for orthodontists.
D)a rise in the rates of dental insurance.
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54
A firm should hire more workers to increase its profits if
A)the marginal product of labor is greater than the wage the firm will pay these workers.
B)the wage rate is less than the marginal revenue product of labor.
C)there is enough capital and other resources for the workers to use.
D)the demand for labor is elastic.
A)the marginal product of labor is greater than the wage the firm will pay these workers.
B)the wage rate is less than the marginal revenue product of labor.
C)there is enough capital and other resources for the workers to use.
D)the demand for labor is elastic.
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55
For a firm that is a price taker in the market for labor, the marginal revenue product of labor equals the
A)marginal product of labor multiplied by the wage rate.
B)marginal product of labor multiplied by the product price.
C)marginal product of labor divided by the wage rate.
D)marginal product of labor multiplied by the marginal cost of production.
A)marginal product of labor multiplied by the wage rate.
B)marginal product of labor multiplied by the product price.
C)marginal product of labor divided by the wage rate.
D)marginal product of labor multiplied by the marginal cost of production.
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56
A firm's demand curve for labor slopes downwards because
A)of the law of diminishing marginal returns.
B)firms supply less labor as the wage rate rises.
C)workers supply less labor services as the wage rate falls.
D)of rising marginal product.
A)of the law of diminishing marginal returns.
B)firms supply less labor as the wage rate rises.
C)workers supply less labor services as the wage rate falls.
D)of rising marginal product.
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57
The demand for labor depends primarily on the additional output produced as a result of hiring an additional worker and
A)the additional revenue received from selling the output produced as a result of hiring an additional worker.
B)the payment made to the worker for producing the additional output.
C)the elasticity of demand for the output produced by the worker.
D)the number of workers willing to produce the additional output.
A)the additional revenue received from selling the output produced as a result of hiring an additional worker.
B)the payment made to the worker for producing the additional output.
C)the elasticity of demand for the output produced by the worker.
D)the number of workers willing to produce the additional output.
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58
The demand for labor is different from the demand for final goods and services because
A)the demand for labor is derived from the demand for the good or service the labor is used to produce.
B)it is a demand for people, not inanimate objects.
C)the demand for labor is more inelastic than the demand for the goods and services produced with this labor.
D)the law of demand does not apply to the demand for labor.
A)the demand for labor is derived from the demand for the good or service the labor is used to produce.
B)it is a demand for people, not inanimate objects.
C)the demand for labor is more inelastic than the demand for the goods and services produced with this labor.
D)the law of demand does not apply to the demand for labor.
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59
Which of the following describes a difference between the marginal product of labor and the marginal revenue product of labor?
A)The marginal product of labor declines as each additional worker is hired because of the law of diminishing returns. The marginal revenue product of labor declines as each additional worker is hired because of diseconomies of scale.
B)The marginal product of labor declines as each additional worker is hired because of the law of diminishing returns. The marginal revenue product increases as each additional worker is hired because of increases in the productivity of labor.
C)The marginal product of labor is inelastic. The marginal revenue product of labor is elastic.
D)The marginal product of labor measures the change in output as additional workers are hired. The marginal revenue product measures the change in revenue as additional workers are hired.
A)The marginal product of labor declines as each additional worker is hired because of the law of diminishing returns. The marginal revenue product of labor declines as each additional worker is hired because of diseconomies of scale.
B)The marginal product of labor declines as each additional worker is hired because of the law of diminishing returns. The marginal revenue product increases as each additional worker is hired because of increases in the productivity of labor.
C)The marginal product of labor is inelastic. The marginal revenue product of labor is elastic.
D)The marginal product of labor measures the change in output as additional workers are hired. The marginal revenue product measures the change in revenue as additional workers are hired.
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60
The benefit to the firm from hiring one additional worker is called the
A)marginal revenue product of labor.
B)marginal revenue.
C)marginal profit.
D)total revenue.
A)marginal revenue product of labor.
B)marginal revenue.
C)marginal profit.
D)total revenue.
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61
Which of the following is not held constant along a firm's demand curve for labor?
A)the quantity of other inputs used by the firm
B)the wage rate
C)changes in technology
D)the price of the product produced by the firm
A)the quantity of other inputs used by the firm
B)the wage rate
C)changes in technology
D)the price of the product produced by the firm
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62
Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labor is the only input.If the last worker hired produces four units of output per hour, then to maximize profits the firm should
A)not change the number of workers it currently hires.
B)lay off some workers.
C)hire another worker.
D)There is not enough information to answer the question.
A)not change the number of workers it currently hires.
B)lay off some workers.
C)hire another worker.
D)There is not enough information to answer the question.
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63
Technological advancements that increase labor's productivity shift the labor supply curve to the right.
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64
The marginal product of labor is the increase in output as a result of hiring an additional worker while the marginal revenue product of labor is the increase in profit as a result of hiring an additional worker.
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65
Table 17-3
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces.
Refer to Table 17-3.What is the amount of profit added as a result of hiring the fourth worker?
A)$7,200
B)$1,200
C)$800
D)$400
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces.
Refer to Table 17-3.What is the amount of profit added as a result of hiring the fourth worker?
A)$7,200
B)$1,200
C)$800
D)$400
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66
A profit-maximizing perfectly competitive firm should hire workers up to the point where labor's marginal revenue product equals the wage rate.
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67
Figure 17-2
Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
Refer to Figure 17-2.Suppose the market price of bracelets falls to $2.What happens to the curve given in the diagram?
A)Nothing, because labor's productivity has not changed.
B)There will be a movement along the curve.
C)The curve shifts to the left.
D)We cannot answer the question without knowing if Becca would want to hire more workers.
Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
Refer to Figure 17-2.Suppose the market price of bracelets falls to $2.What happens to the curve given in the diagram?
A)Nothing, because labor's productivity has not changed.
B)There will be a movement along the curve.
C)The curve shifts to the left.
D)We cannot answer the question without knowing if Becca would want to hire more workers.
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68
Table 17-3
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces.
Refer to Table 17-3.What is Hotspur's profit maximizing quantity of labor?
A)2 workers
B)3 workers
C)5 workers
D)6 workers
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces.
Refer to Table 17-3.What is Hotspur's profit maximizing quantity of labor?
A)2 workers
B)3 workers
C)5 workers
D)6 workers
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69
Table 17-3
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces.
Refer to Table 17-3.What is the amount of revenue added as a result of hiring the fourth worker?
A)$1,200
B)$7,200
C)15 microwaves
D)90 microwaves
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces.
Refer to Table 17-3.What is the amount of revenue added as a result of hiring the fourth worker?
A)$1,200
B)$7,200
C)15 microwaves
D)90 microwaves
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70
An increase in the price of grape juice causes an increase in the marginal revenue product of labor used to produce grape juice.
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71
Which of the following factors will not cause the labor demand curve to shift?
A)increases in human capital
B)changes in technology
C)a change in the price of the product produced with labor
D)the wage rate
A)increases in human capital
B)changes in technology
C)a change in the price of the product produced with labor
D)the wage rate
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72
Table 17-4
Table 17-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4.What are the quantity of labor and marginal revenue product of labor that will maximize the profit Apple would earn from selling iPods?
A)2; $160
B)3; $340
C)2; $680
D)3; $140
Table 17-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4.What are the quantity of labor and marginal revenue product of labor that will maximize the profit Apple would earn from selling iPods?
A)2; $160
B)3; $340
C)2; $680
D)3; $140
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73
Table 17-4
Table 17-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4.What are the price and quantity of workers that result in the maximum amount of profit Apple would earn from selling iPods?
A)$140; 2
B)$160; 2
C)$140; 3
D)$180; 1
Table 17-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4.What are the price and quantity of workers that result in the maximum amount of profit Apple would earn from selling iPods?
A)$140; 2
B)$160; 2
C)$140; 3
D)$180; 1
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74
Labor demand is considered a derived demand because producers do not demand labor for itself but only because labor is used to produce output that consumers desire.
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75
An increase in a perfectly competitive firm's demand for labor could be caused by
A)a decrease in the market wage rate.
B)an increase in the amount of human capital among the labor force.
C)an increase in the supply of labor.
D)a decrease in the market price of the product the firm produces.
A)a decrease in the market wage rate.
B)an increase in the amount of human capital among the labor force.
C)an increase in the supply of labor.
D)a decrease in the market price of the product the firm produces.
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76
The market demand curve for labor
A)is determined by adding up the quantity of labor demanded by each firm at each wage, holding constant the other variables that affect the willingness of firms to hire workers.
B)is the same as the market demand curve for the product labor produces because it is a derived demand.
C)is determined by adding up the demand for labor by each firm at each wage, holding constant the other variables that affect the willingness of firms to hire workers.
D)is perfectly inelastic because there is a finite number of workers in the market for labor.
A)is determined by adding up the quantity of labor demanded by each firm at each wage, holding constant the other variables that affect the willingness of firms to hire workers.
B)is the same as the market demand curve for the product labor produces because it is a derived demand.
C)is determined by adding up the demand for labor by each firm at each wage, holding constant the other variables that affect the willingness of firms to hire workers.
D)is perfectly inelastic because there is a finite number of workers in the market for labor.
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77
Suppose a competitive firm is paying a wage of $12 an hour.Assume that labor is the only input.If hiring another worker would increase output by four units per hour, then to maximize profits the firm should
A)not change the number of workers it currently hires.
B)hire the extra worker.
C)layoff some workers.
D)There is not enough information to answer the question.
A)not change the number of workers it currently hires.
B)hire the extra worker.
C)layoff some workers.
D)There is not enough information to answer the question.
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78
An increase in the supply of capital, which is a complement to labor, will lead to
A)a decrease in the quantity of labor demanded.
B)an increase in the demand for labor.
C)a decrease in the demand for labor.
D)an increase in the quantity of labor demanded.
A)a decrease in the quantity of labor demanded.
B)an increase in the demand for labor.
C)a decrease in the demand for labor.
D)an increase in the quantity of labor demanded.
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79
The marginal product of labor curve is the demand curve for labor.
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80
Table 17-4
Table 17-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4.What are the price and quantity of workers that result in the maximum amount of revenue Apple would earn from selling iPods?
A)$180; 1
B)$140; 2
C)$120; 2
D)$120; 4
Table 17-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price.MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4.What are the price and quantity of workers that result in the maximum amount of revenue Apple would earn from selling iPods?
A)$180; 1
B)$140; 2
C)$120; 2
D)$120; 4
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