Exam 15: Factor Markets

For a monopoly,the value of the next worker equals

You place $100 in a bank account that pays 8%.If you remove the interest you receive each year you can turn your stock into a flow of

-The above figure shows a competitive firm's demand for labor assuming that the firm's output sells for $1 per unit.If the wage is $5 per hour,a ten cent specific tax on the good sold by the firm will cause the firm to

A firm's demand for labor is downward sloping because of

Suppose a person has a discount rate of zero.This implies she

Why does a monopsonist's marginal expenditure curve lie above the labor supply curve?

Jon runs a bar in New York City.A city law prevents smoking in New York bars,but Jon is able to convince a friend in city hall to grant his bar a smoking permit by exploiting some fancy loopholes in the law.While smoking enables Jon to charge a premium to the customers (higher drink prices),his workers are subject to second-hand smoke.Therefore Jon has to pay his workers a wage higher than he otherwise would.Assuming Jon's production function is f(L,K)= LᵃK¹⁻ᵃ,where L is the quantity of workers and K is the quantity of capital,how does Jon's optimal capital-to-labor ratio compare to similar bars without smoking?

At age 40,Joe is considering quitting his job and going back for a college degree.He needs two more years full-time.Tuition is $10,000 per year.He earns $30,000 per year.A college degree would raise his annual income by $10,000 per year.He will retire at age 70.If these are real amounts (adjusted for inflation),then the discount rate to be used should be

To calculate the internal rate of return on a factory that would yield a perpetual future stream of income,one would divide

At age 40,Joe is considering quitting his job and going back for a college degree.He needs two more years full-time.Tuition is $10,000 per year.He earns $30,000 per year.A college degree would raise his annual income by $10,000 per year.He will retire at age 70.His cost of going back to college is

Suppose the labor market is competitive,the supply curve of labor is upward sloping,and the amount of capital is fixed.If the output market changes from a competitive market to a monopoly,what is the effect on its demand for labor? Explain.

Suppose two people with the same level of income and wealth have different discount rates.Joe has a very high discount rate and Jim has a very low discount rate.Which one of the following is TRUE?

What is the internal rate of return on a new $2,000 heater that would reduce your heating costs by $200 a year forever? Under what conditions would you make the purchase?

The long-run labor demand curve is relatively flatter than the short-run labor demand curve because,in the short run,

For the following, please answer "True" or "False" and explain why. -If the competitive firm maximizes profit by selecting labor rather than output,it will earn greater economic profit.

Why is the short-run demand curve for labor downward sloping?

The amount of labor a firm employs depends on

For the following, please answer "True" or "False" and explain why. -Interest rates are positive because inflation makes purchases more expensive in the future than today.

If a non-renewable resource is scarce,has constant marginal cost of production,and is sold in a competitive market,

Four banks are offering the same interest rate of 4%.Where do you invest?