Question 1

The additional revenue a firm obtains when it hires an additional worker (holding other inputs constant) is the

Accepted Answer

A)  marginal revenue product (MRP) of labor. 
B)  total factor cost (TF
C)  per worker. 
C)  general rule for hiring. 
D)  marginal physical product (MPP) of labor. 
A)  marginal revenue product (MRP) of labor. 
B)  total factor cost (TF
C)  per worker. 
C)  general rule for hiring. 
D)  marginal physical product (MPP) of labor.

Question 2

What is the general rule for hiring for a perfectly competitive firm? Show it on a graph. What is the demand curve for labor on the graph? Explain.

Accepted Answer

@#IMG-DLM& The firm hires workers up to the point

Question 3

The cost of hiring one more worker, ceteris paribus, is known as

Accepted Answer

A)  marginal revenue product. 
B)  marginal physical product. 
C)  marginal factor cost. 
D)  marginal wage. 
A)  marginal revenue product. 
B)  marginal physical product. 
C)  marginal factor cost. 
D)  marginal wage.

Question 4

In the long run, input demand becomes more

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  unit-elastic. 
D)  cost efficient. 
A)  elastic. 
B)  inelastic. 
C)  unit-elastic. 
D)  cost efficient.

Question 5

-Refer to the above table. If the price of the product is $1.50, and the marginal factor cost of an additional unit of an input is $105, how many units of labor should be hired?

Accepted Answer

A)  11 
B)  12 
C)  13 
D)  14 
A)  11 
B)  12 
C)  13 
D)  14

Question 6

What would make the demand for labor more elastic?

Accepted Answer

The demand for labor will be more elasti

Question 7

If the marginal productivity of labor decreases, then

Accepted Answer

A)  the quantity of labor demanded at every possible wage rate will be less. 
B)  the quantity of labor demanded at every possible wage rate will be higher. 
C)  the quantity of labor demanded will not be affected. 
D)  the demand curve for labor will shift upward and to the right. 
A)  the quantity of labor demanded at every possible wage rate will be less. 
B)  the quantity of labor demanded at every possible wage rate will be higher. 
C)  the quantity of labor demanded will not be affected. 
D)  the demand curve for labor will shift upward and to the right.

Question 8

The additional revenue associated with hiring one additional unit of some factor input, such as labor, is called

Accepted Answer

A)  marginal cost. 
B)  marginal revenue product. 
C)  marginal factor cost. 
D)  marginal physical product. 
A)  marginal cost. 
B)  marginal revenue product. 
C)  marginal factor cost. 
D)  marginal physical product.

Question 9

The change in output resulting from the addition of one more worker is

Accepted Answer

A)  marginal physical product. 
B)  marginal revenue product. 
C)  average physical product. 
D)  average revenue product. 
A)  marginal physical product. 
B)  marginal revenue product. 
C)  average physical product. 
D)  average revenue product.

Question 10

In a perfectly competitive labor market, the labor supply curve facing the firm will be

Accepted Answer

A)  upward sloping. 
B)  downward sloping. 
C)  horizontal. 
D)  vertical. 
A)  upward sloping. 
B)  downward sloping. 
C)  horizontal. 
D)  vertical.

Question 11

When the price of a product decreases, the marginal revenue product curve in a perfectly competitive market

Accepted Answer

A)  does not change. 
B)  becomes flatter. 
C)  shifts to the right. 
D)  shifts to the left. 
A)  does not change. 
B)  becomes flatter. 
C)  shifts to the right. 
D)  shifts to the left.

Question 12

When 5 units of labor are employed, total product is 9 units; when 6 units of labor are employed, total product is 11 units of output. If the price of output is $5 per unit, what is the marginal revenue product of the 6th unit of labor?

Accepted Answer

A)  $10 
B)  $5 
C)  $15 
D)  $55 
A)  $10 
B)  $5 
C)  $15 
D)  $55

Question 13

If a firm employs an extra unit of labor, the additional product generated by employing the extra unit of labor is

Accepted Answer

A)  the marginal physical product of labor. 
B)  the diminished marginal product. 
C)  the outside edge. 
D)  total product. 
A)  the marginal physical product of labor. 
B)  the diminished marginal product. 
C)  the outside edge. 
D)  total product.

Question 14

Whenever an input makes up a large percentage of a good's final cost, an increase in that input's price will

Accepted Answer

A)  affect total cost relatively more. 
B)  not affect total revenues. 
C)  affect only accounting profits. 
D)  cause the firm to shutdown. 
A)  affect total cost relatively more. 
B)  not affect total revenues. 
C)  affect only accounting profits. 
D)  cause the firm to shutdown.

Question 15

We would expect that a fall in labor supply will have a proportionately smaller effect on the market wage rate when

Accepted Answer

A)  workers can easily be replaced by capital goods. 
B)  the product produced in the industry has very few substitutes. 
C)  the product is produced in a perfectly competitive industry. 
D)  labor represents a relatively small portion of total costs. 
A)  workers can easily be replaced by capital goods. 
B)  the product produced in the industry has very few substitutes. 
C)  the product is produced in a perfectly competitive industry. 
D)  labor represents a relatively small portion of total costs.

Question 16

The equilibrium wage rate in an industry is found by

Accepted Answer

A)  the intersection of the market demand curve for labor and the marginal revenue product curve of labor. 
B)  the intersection of the firm's demand curve for labor and the firm's supply curve of labor. 
C)  the intersection of the market demand curve for labor and the market supply curve of labor. 
D)  negotiations between the union leadership and the managers of the firms. 
A)  the intersection of the market demand curve for labor and the marginal revenue product curve of labor. 
B)  the intersection of the firm's demand curve for labor and the firm's supply curve of labor. 
C)  the intersection of the market demand curve for labor and the market supply curve of labor. 
D)  negotiations between the union leadership and the managers of the firms.

Question 17

The monopolist's input demand curve is the

Accepted Answer

A)  marginal revenue curve. 
B)  marginal revenue product curve. 
C)  marginal physical product curve. 
D)  marginal factor cost. 
A)  marginal revenue curve. 
B)  marginal revenue product curve. 
C)  marginal physical product curve. 
D)  marginal factor cost.

Question 18

The cost of using an additional unit of an input is called the

Accepted Answer

A)  marginal revenue product. 
B)  marginal physical product cost. 
C)  marginal factor cost. 
D)  marginal product of labor. 
A)  marginal revenue product. 
B)  marginal physical product cost. 
C)  marginal factor cost. 
D)  marginal product of labor.

Question 19

The addition to revenue obtained from firing an additional unit of labor is

Accepted Answer

A)  total product. 
B)  marginal revenue product. 
C)  marginal factor cost. 
D)  marginal physical product of labor. 
A)  total product. 
B)  marginal revenue product. 
C)  marginal factor cost. 
D)  marginal physical product of labor.

Question 20

When a firm is hiring an input such that the marginal revenue product of the input is equal to the marginal factor cost of the input, the firm

Accepted Answer

A)  should be expanding output. 
B)  is hiring too little of the input. 
C)  is maximizing economic profit. 
D)  is producing too much output. 
A)  should be expanding output. 
B)  is hiring too little of the input. 
C)  is maximizing economic profit. 
D)  is producing too much output.

Exam 28: The Labor Market: Demand, Supply and Outsourcing

The additional revenue a firm obtains when it hires an additional worker (holding other inputs constant) is the

What is the general rule for hiring for a perfectly competitive firm? Show it on a graph. What is the demand curve for labor on the graph? Explain.

The cost of hiring one more worker, ceteris paribus, is known as

In the long run, input demand becomes more

-Refer to the above table. If the price of the product is $1.50, and the marginal factor cost of an additional unit of an input is $105, how many units of labor should be hired?

What would make the demand for labor more elastic?

If the marginal productivity of labor decreases, then

The additional revenue associated with hiring one additional unit of some factor input, such as labor, is called

The change in output resulting from the addition of one more worker is

In a perfectly competitive labor market, the labor supply curve facing the firm will be

When the price of a product decreases, the marginal revenue product curve in a perfectly competitive market

When 5 units of labor are employed, total product is 9 units; when 6 units of labor are employed, total product is 11 units of output. If the price of output is $5 per unit, what is the marginal revenue product of the 6th unit of labor?

If a firm employs an extra unit of labor, the additional product generated by employing the extra unit of labor is

Whenever an input makes up a large percentage of a good's final cost, an increase in that input's price will

We would expect that a fall in labor supply will have a proportionately smaller effect on the market wage rate when

The equilibrium wage rate in an industry is found by

The monopolist's input demand curve is the

The cost of using an additional unit of an input is called the

The addition to revenue obtained from firing an additional unit of labor is

When a firm is hiring an input such that the marginal revenue product of the input is equal to the marginal factor cost of the input, the firm

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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