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

-Refer to the above table. Suppose the price of the good sold is $10 and the marginal factor cost of labor is $700, how many units of labor will the firm hire?

If a firm faces perfectly competitive product and factor markets and the marginal product of labor and capital are 4 and 9, respectively, while the wage rate is $2 and the rental rate on capital is $4, the firm should

Suppose the MRP of the 49th worker at a firm is $25 and that the market wage rate is $15. We know that if this firm operates in perfectly competitive product and labor markets,

What does a monopolist's demand curve for labor look like? How does it compare to the market demand curve for a competitive industry? What does the supply curve of labor to a monopolist look like? Explain.

Suppose that in a computer factory, if there is 1 worker, 80 computers are produced per week. If there are 2 workers, 150 computers are produced per week. If there are 3 workers, 210 computers are produced per week. Given this information and the fact that the firm receives $200 per computer, the marginal revenue product of the third worker is

As the wage rate rises, other things constant, perfectly competitive firms will employ

When market wages increase in a perfectly competitive market, then

Ajax has just discovered that the marginal revenue product generated by the last worker hired was $75 while the marginal factor cost was $95. What should Ajax do?

Economic analysis indicates the net long-run effect of outsourcing for the United States is likely to be

If a firm hires 312 workers it produces 4,522 computers. If it hires 313 workers it produces 4,786 computers. If computers sell at a constant price of $1 and labor is hired at a constant wage rate of $65 per worker

The price elasticity of demand for labor will depend upon all but the

Which of the following statements is true?

-In the above figure, the competitive firm will employ the quantity of labor

If an increase in the price of one input causes an increase in demand for labor, the two inputs are

If the demand for online banking increases, we would expect to see the

As a firm hires more workers, holding capital and other factors constant, the marginal physical product of labor declines because

A 20 percent increase in the wage rate induces firms in an industry to reduce quantity demanded for labor by 5 percent in the first year. Five years later we would expect, other things constant,

Which of the following statements is FALSE about the long-run effects of outsourcing?

An increase in labor productivity will shift

Suppose a U.S. computer company outsources its technical-support services to India. This will cause