Exam 18: Markets for Factors of Production

-A worker has a marginal product of 15 units a day, each of which can be sold for $10. Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer.

If a nonrenewable natural resource's price is expected to increase at a rate faster than the interest rate, then the supply today will

Because a monopsony is the only buyer in a particular market, the

A firm's demand for labor

-In the above figure, the curve labeled MCL is the marginal cost of labor curve and is used in a

Which of the following increases the demand for U.S. union labor?

-City-Mart is the only employer of sales clerks in Panburg. In the figure above S is the labor supply curve faced by City-Mart, VMP is City-Mart's value of marginal product curve, and MCL is its marginal cost of labor curve. City-Mart maximizes its profit if it hires ________ hours of labor and pays ________ per hour.

When a firm faces a labor supply curve that is upward sloping, the firm must

In order to spend more time with her children, a young mother decides to work less hours as her pay increases. What does her labor supply curve look like?

For a monopsony, the marginal cost of labor exceeds the wage rate because the firm must increase the wage it pays to all of its workers if it wishes to increase its employment.

A rise in the minimum wage increases the demand for union labor because this policy change

The existence of a union

-If there is a monopsony operating in the labor market illustrated in the figure above and the federal government decides to institute a minimum wage of $8 an hour then the wage paid will ________ and the quantity of labor hired will ________.

A household's reservation wage is the ________.

In the short run, ________ increases the quantity of labor demanded by the firm.

-Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $4, and Winnie maximizes his profit when he employs 3 workers, the wage rate is

If Joe receives an increase in his wage rate and decides to decrease his hours worked, the

The loan market is in equilibrium. If the demand for land decreases, the rental rate of land ________.

With respect to labor supply, the substitution effect means a

Whenever you discount a future sum of money into its present value, you must know I. the interest rate. II) the number of years in the future in which the money will be received.