Exam 15: Factor Markets

For the following, please answer "True" or "False" and explain why. -If a firm has market power in the output market but buys labor in a competitive market,it will hire the same quantity of labor that a competitive firm will.

The demand for a monopoly's output is p = 100 - Q.The firm's production function is Q = 2L.Which of the following is the firm's demand for labor?

In the long-run,a fall in the input price causes less of an increase in factor demand

Technological improvements in coal mining will

For the following, please answer "True" or "False" and explain why. -If the interest rate is positive,the future value of an interest bearing investment is always larger than the present value.

Suppose the marginal product of labor equals 1/L.If the wage is $1 per unit of labor,what is the short-run effect on the firm's labor demand if the price of output were to double?

You can put your $100 in Bank A that pays 8% at the end of the year.You can also put your $100 in Bank B that pays 4% at the end of six months and then 4% again at the end of the year.You will keep your $100 and all interest in the bank.At the end of the year

The increase in total revenue due to increasing the amount of labor employed by one unit is called the

As the interest rate increases,the present value of a future payment

If an exhaustible resource is priced at marginal cost that remains constant over time,then

A major corporation hires high school students on a part-time basis.It offers a reward of $5,000 to any of its high school seniors who graduate college in four years.What is the present value of that reward to a student who just finished her junior year of high school,assuming a nominal rate of interest of 8%?

The Net Present Value approach to investment results in an investment being undertaken only if

You invest an amount today for four years that pays 6% annually.The bank compounds annually.At the end of the four years you will have $150.What amount must you invest today?

You grow poplar trees.The lumber yard purchases cut trees from you.The trees grow 1 foot per year.Assuming a constant real price per foot for poplar and a real interest rate of 3%,would you sell a 20-foot tree today?

If the labor market is competitive,a monopoly output market will result in

The growth over time in the spread between price and marginal cost of an exhaustible resource is equal to

Suppose there are profit maximizing,competitive buyers and sellers of labor in an industry,and the amount of capital is fixed for each firm.Explain under what condition the output price will equal the wage rate.

If the interest rate is 10%,then $1 received one year from now is worth how much today?

For the following, please answer "True" or "False" and explain why. -To derive the labor market demand curve,the labor demand curves for each firm in the output market of interest are summed.

Show with a graph that an increase in the minimum wage can increase the level of employment in a monopsony market.