Exam 18: Markets for Factors of Production

If the wage rate paid in the fast-food outlets in a small town is greater than the reservation wage of all the teenagers in the town and less than the reservation wage of all the adults, then the fast-food outlets will hire ________.

A professional tennis player enters fewer tournaments each year as the prize money she won increased. This observation indicates that the tennis player

In order to change the demand for union labor, unions favor all of the following EXCEPT increasing

-The table above shows the total product schedule for Shines Car Wash. The market for car washes is perfectly competitive and car washes sell for $5 each. The labor market is competitive and the wage rate is $50 per day. What is the value of marginal product for each worker? How many workers does the firm hire to maximize profit?

-The table above shows the number of pounds of bricks that can be produced by the Red Brick Company as the number of workers hired increases. The brick market is perfectly competitive and each pound of bricks sells for $20. The labor market is competitive and the wage rate is $30 an hour. When the Red Brick Company maximizes its profit, it produces ________ bricks an hour.

Which of the following increases the demand for U.S. union labor?

If a firm finds that the wage rate (W) is less than the value of marginal product (VMP), then to maximize its profit the firm should hire

-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. City-Mart maximizes its profit if it hires ________ hours of labor and pays ________ per hour.

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

-Based on the production and revenue data in the above table, if the wage rate is $20 per worker, how many workers will be hired?

Which answer below correctly describes the relationship between the demand for labor curve and the value of marginal product curve?

Explain why a monopsony's marginal cost of labor is greater than the wage rate.

-The above table has the marginal product schedule for Nick's Dry Cleaners, a perfectly competitive dry cleaning firm. a) If the price to dry clean a blouse is $8 each, complete the last column of the table. b) If Nick can hire workers at the going wage rate of $16 an hour, how many workers does Nick hire?

The demand for a product produced by a union becomes more elastic. After this change, how does an increase in the wage rate paid its members affect their employment?

-Tom and Mary own a perfectly competitive tomato farm. They can hire different numbers of college students to help plant, cultivate, and harvest the tomatoes. The above table gives their marginal product schedule. a) If the price of a pound of tomatoes is $2 a pound, complete the first value of marginal product column in the table. If Tom and Mary must pay their workers $10 an hour, how many workers do they hire? b) If the price of a pound of tomatoes falls to $1 a pound, complete the second value of marginal product column in the table. If Tom and Mary still must pay their workers $10 an hour, how many workers do they hire? c) When the price of a pound of tomatoes falls, what happens to Tom and Mary's demand for labor curve?

-The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. If the market wage is $300 per day, the firm will NOT hire a fourth worker because the fourth worker would create

-The figure above shows a labor market. If this labor market is perfectly competitive, the wage rate is

"As the quantity of labor hired increases, the value of marginal product stays constant as long as the wage rate is constant for all workers." Is the previous statement correct or incorrect? Explain your answer.

Homer has been saving to buy a new car in five years and expects that the car of his dreams will cost $35,000. If the interest rate is 8 percent per year, how much money should Homer have in his bank account today in order to have enough money to buy the car in 5 years?

At an interest rate of 5 percent, the present value of $1,000 to be received three years from today is