Exam 11: Markets for Factors of Production

The figure below shows output of a firm at different number of workers. Payment to workers is the only variable cost of the firm. -Refer to the figure above.If the price of the output is $5.00 per unit and the wage is $10 per worker,the firm's optimal choice in the short run is to hire ________ workers.

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 is $1.00,how many hours would Paul choose to work? How many buttons would he buy?

Refer to the scenario above.Trevor argues that increases in the demand for labor throughout the entire economy bid up wages received by everyone in the economy.As a result,some women who previously had not been working at the market wage entered the labor force.According to Trevor,________.Explain your answer.

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 price of a chair increases to $15 and the rental price of machines is $90 per day,how many machines should the firm rent to maximize profits?

Since 1967,there has not been much of a change in the income of the bottom 10 percent of earners in the U.S.economy.This can be attributed to the ________.

If both the goods and the labor market are perfectly competitive,a firm hires labor up to the point where the value of the marginal product of labor equals the wage rate and produces at a point where price is ________.

Suppose a firm uses land,labor,and capital for its production process.If it is renting the equilibrium quantity of all three factors of production,then which of the following conditions will be true?

Labor demand is described as a derived demand because ________.

The market supply curve of labor in a perfectly competitive labor market ________.

Scenario: Consider a firm that produces and sells a good for the price of $2 in a perfectly competitive market. The following table shows the relationship between the number of workers and the output of this firm. Suppose the labor market from which this firm hires its employees is competitive. -Refer to the scenario above.If the wage rate in this market is equal to $18,this firm will hire ________ workers.

Meryl works 10 hours a day in an hourly job that pays $15 per hour.Suppose Meryl's wage rate increases to a really high rate of $10,000 per hour.Your friend argues that Meryl will supply more than 10 hours of work,because her wage rate is much higher.You argue than Meryl will supply less than 10 hours of work,because she can now afford the time off.Your friend is referring to the ________,and you are referring to the ________ of Meryl's wage increase.

Which of the following statements is true?

Suppose the market for labor consists of only three workers: Alex, Anna, and Jim. The following table shows the labor supplied by the three workers at different wage rates. -Refer to the table above.What is the market supply of labor per week when the wage rate is $75?

If a firm offers higher starting salaries to Asian job candidates than to white job candidates because Asians as a group have higher SAT scores,this is an example of ________.

Suppose the market for labor consists of only three workers: Alex, Anna, and Jim. The following table shows the labor supplied by the three workers at different wage rates. -Refer to the table above.What is the market supply of labor per week when the wage rate is $50?

The figure below shows output of a firm at different number of workers. Payment to workers is the only variable cost of the firm. -Refer to the figure above.If it is optimal for the firm to hire 2 workers in the short run,then the wage per worker must be ________.

The value of the marginal product of labor for a firm is the ________.

The following figure depicts the production of a firm. -Refer to the figure above.If the current wage rate per worker is $35 and the price of the output is $2,what is the profit-maximizing level of labor use?

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

The following figure depicts a specific firm's production with respect to the number of machine used. -Refer to the table above.If the rental price of machines is $180 per day and the firm decides to use 3 machines,what must be the value of a unit of output?