Exam 11: Markets for Factors of Production

Scenario: Mark grows herbs in his backyard. The following table shows his output as a function of the square feet of land used. -Refer to the scenario above.If Mark can sell his herbs at the price of $2.50 per pound,what is the value marginal product of land when the second square foot of land is used?

Scenario: The labor market in Delaware is depicted in the following figure. Suppose 10,000 out-of-state workers move to Delaware. -Refer to the scenario above.Before this migration,the employment in Delaware was equal to ________,and after this migration the employment will equal ________.

Sara is a high school graduate,and James is a college graduate.Which of the following statements is true?

Other things remaining the same,which of the following is likely to increase both the wage rate and the number of workers hired on a rice farm?

Scenario: This problem applies the principle of optimization covered in Chapter 5 to the problem of choosing how many hours to work. Paul has to decide how many hours to work per day. His boss is willing to give Paul whatever hours Paul wants up to 8 hours. All else being equal, he would rather not work, that is, Paul has positive marginal benefit from each hour of leisure. But he is an avid collector of presidential campaign buttons. The more leisure he takes, the fewer buttons he can afford. So Paul faces a trade-off between leisure and buttons. Each button costs $1.00. The table below shows Paul's marginal benefits from leisure (MBlₑᵢsᵤᵣₑ) and buttons (MBbᵤttₒn). -Refer to the scenario above.If the hourly wage increases from $1.00 to $1.60,Paul would choose to work ________.

A firm has to decide on the kind of technology it wants to invest in.It has two options: Technology A,which is labor-saving,and Technology B,which is labor-complementary.Illustrate graphically how the equilibrium wage and employment level in the firm will change if it decides to invest in the following. a) Technology A b) Technology B

The condition determining the optimal amount of leisure is that the ________.

Scenario: Mark grows herbs in his backyard. The following table shows his output as a function of the square feet of land used. -Refer to the scenario above.What is the marginal product of land when the second square foot of land is used?

The following figure shows price versus demand in a given market. -Refer to the figure above.What is the optimal number of machines rented if the market rental price is $5 per month?

Suppose that,on average,women are less likely to ask for a raise or aggressively negotiate for conditions of employment.All else being equal,employers who use statistical discrimination would ________.

The following figure depicts a specific firm's production with respect to the number of machine used. -Refer to Charles and Guryan's study of wage data reported in Evidence-Based Economics segment in the textbook.They have found that there is a gap in wages between African-Americans and Caucasian-Americans. a)How much of the gap is attributed to discrimination? b)What other factors did the economists consider as possible causes for the gap? Why is it important to consider other factors? c)Is the discrimination found in the study taste-based or statistical?

The following figure depicts an individual's supply of labor. -Refer to the figure above.The income effect dominates the substitution effect only between ________.

Assume that both the goods and the labor market are perfectly competitive.If at equilibrium,the marginal cost faced by a firm is $3 and the market wage rate is $6,the marginal product of the last unit of labor hired by the firm must be ________.

Suppose the market wage facing a firm in the perfectly competitive candle-making industry is $20 per hour,and the firm sells its candles for $2 each.Given this information,the firm should hire workers until the marginal product of labor equals ________.

Technological changes that increase the productivity of skilled workers relative to that of unskilled workers are referred to as ________ technological changes.

The following figure shows price versus demand in a given market. -Refer to the figure above.If the optimal number of machines rented is 100,the market rental price must be ________.

The following table shows the output of chairs produced by a firm at different units of capital rented. The price per chair is $10. -Refer to the table above.If the rental price of machines is $140 per day,how many machines should the firm rent?

How does the price of a final good that is produced using labor affect the demand for labor?

Which of the following is likely to cause a decrease in both the wage rate and the level of employment in an industry?

The market implications of taste-based discrimination were in part developed by ________.