Exam 11: Factor Markets

Because in the long run, demand for labor is relatively more _____, an increase in the minimum wage in the long run leads to ____ job losses than in the short run.

A firm will be willing to hire additional workers if the marginal _____ is _____ than the wage.

All else equal, if the price of the good that a firm produces decreases, then the marginal revenue product of workers will _____, and the marginal revenue product curve will shift:

A minimum wage acts as a price _____ so that firms cannot pay a wage that is _____ than the minimum wage set by the government.

A firm will be willing to hire additional workers if the _____ is greater than the:

Which one of the following leads to an increase in the quantity of labor supplied and therefore a movement along the labor supply curve?

All else equal, an increase in the immigration rate in the economy will lead to _____ in the quantity of labor hired and _____ in the wage rate.

Anna and Bob are workers in two different industries. Anna's industry has a relatively lower supply of workers than Bob's for a given demand for workers. If Bob's wage is $12 per hour and the compensating wage differential is $2 per hour, then Anna's wage is _____ per hour.

Use Figure: Minimum Wage and Job Loss II. At the competitive equilibrium, the quantity of labor demanded is _____, and the quantity of labor supplied is: ​ Minimum Wage and Job Loss II

Because the quantity of land cannot be increased easily in the short run, the _____ curve for land is relatively more _____ compared to that of labor.

Use Figure: Equilibrium in the Labor Market. Which one of the following can shift the equilibrium from point B to point A? Figure: Equilibrium in the Labor Market

If a technological improvement increases the marginal product of all workers, then the marginal revenue product of workers will _____, and the market demand curve for labor will shift:

Mike and Alice work in different industries that have an identical demand for workers. Mike receives a wage of $12 per hour, and Alice receives a wage of $18 per hour. Based on this, we can conclude that the industry in which Mike works has a relatively ______ supply of workers and that the compensating wage differential for Alice is:

A premium that compensates workers for the burdens that are associated with a job is known as the:

Use Figure: Marginal Revenue Product and Labor Demand. The figure shows the marginal revenue product per hour of labor for a competitive firm. If the firm currently is hiring 30 workers and the competitive wage is $8, then the firm should _____ the number of workers to ______ in order to maximize profit. ​ Figure: Marginal Revenue Product and Labor Demand

Use Figure: Marginal Revenue Product and Labor Demand. The figure shows the marginal revenue product per hour of labor for a competitive firm. If the firm employs between 30 and 40 workers per hour, then the wage must be between: ​ Figure: Marginal Revenue Product and Labor Demand

Use Figure: Marginal Revenue Product and Labor Demand. The figure shows the marginal revenue product per hour of labor for a competitive firm. If the wage that is determined in a competitive labor market is $8 per hour, then how many workers per hour will the firm hire? ​ Figure: Marginal Revenue Product and Labor Demand

Irrespective of the type of market, the marginal revenue product curve of a firm is:

The _____ curve for a firm in a perfectly competitive labor market is:

Mike's Lemonade hires workers from a perfectly competitive labor market. Suppose that the labor market equilibrium occurs at an equilibrium wage rate of $8 per hour. Given this, draw the labor demand curve and labor supply curve for Mike's Lemonade, and explain why the demand curve and supply curve take the shape that you have drawn. Then explain the impact of an increase in the price of lemonade on the equilibrium wage and quantity of workers hired by Mike's Lemonade. Justify your answer.