Exam 18: Markets for Factors of Production

What is the value of marginal product of labor? What is the formula that can be used to calculate it? How does the value of marginal product affect how much labor a firm hires?

As the quantity of labor employed by a firm decreases, labor's ________ increases.

-In the table above, the firm producing the product is

-The figure above shows a labor market. If this labor market is perfectly competitive, employment is

In a monopsony labor market, the employer hires the quantity of labor where the ________ equals the ________.

-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 price of lawn cutting rises to $60 per acre of lawn cut, the firm's demand for labor curve

If the wage that a competitive firm must pay its workers exceeds their value of marginal product, the firm will

If the income effect is larger than the substitution effect, then a wage hike will be accompanied by an increase in the quantity of labor supplied.

When the ________ effect dominates the ________ effect, the labor supply curve is ________.

The demand for the services of labor ________ a derived demand and the demand for the services of land ________ a derived demand.

A technological change that raises the value of marginal product of capital ________ the rental rate of capital because the ________.

Why does an increase in the minimum wage increase the demand for union labor?

Next year's expected price of oil is $88 per barrel and the interest rate is 10 percent per year. According to the Hotelling Principle the price of oil this year is

A decrease in the price of a firm's output

-Doug's Dog Grooming is a perfectly competitive firm charging $5 per dog grooming. Doug's Dog Grooming has the total and marginal product of labor schedules in the above table and can hire workers from a perfectly competitive labor market for $15 per hour. What is the value of marginal product of the third worker?

-The table above gives information about the labor market in Lantis, a community in which the labor market is perfectly competitive. The equilibrium wage rate is ________ an hour and the quantity of labor employed is ________ hours per day.

Lynn owns Dust Bunnies, a cleaning company. In one week, she is able to clean 9 houses. If she hires an employee, together they are able to clean 15 houses per week. If Lynn charges $100 to clean a house, what is the value of marginal product of her employee?

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

New technology

The demand for a good or service is called a derived demand because it is derived from the demand for the factors of production that produce this good or service.