Exam 19: The Markets for the Factors of Production

Table 18-1 -Refer to Table 18-1. How many workers will a profit-maximising firm hire?

If workers respond to an increase in the opportunity cost of leisure by taking less of it, their labour supply curve is:

Land resources are compensated according to the:

A firm's demand for a factor of production is derived from its decision to supply a good in the market and is therefore referred to as a derived demand.

Amy has two jobs, one for the winter and one for the summer. In the winter, she works as a tour guide at a crocodile zoo and earns $15 an hour. During the summer, Amy works as an English tutor and earns $18 an hour. -Refer to the information provided. Assume that Amy has an upward-sloping labour supply curve. Amy's crocodile zoo employer is considering an increase in her wage. If Amy is offered $16 per hour, it is likely that she will:

Suppose there is a profit-maximising competitive firm. If it increases the number of workers it employs it will notice that the value of the marginal product of labour falling.

Firms pay out all of their earnings in the form of interest and dividend payments.

Marginal product of labour is defined as the change in:

Rent, interest and profit are all forms of income paid to the owners of:

If hiring more workers causes each additional worker to contribute less to the total output:

Gertrude Kelp owns three boats that participate in commercial fishing for fresh tuna. As part of her business she hires a captain and several crew members for each boat. In the market for fresh tuna, Gertrude is one of thousands of fishers. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of tuna is negligible relative to the size of the market. -According to the information provided, in the fresh tuna product market Gertrude only has control over the:

If land used for forestry loses its fertility, then over time the value of the marginal product of land will fall and the rental price on that land will fall.

Table 18-1 -Refer to Table 18-1. What is the fourth worker's contribution to total revenue?

The equilibrium rental income paid to the owners of capital at any point in time equals the:

The quantity available of one factor of production can affect the marginal product of other factors.

Factor markets are different from product markets in an important way, because:

Capital owners are compensated according to the value of the marginal product of that capital.

In the fishing industry, the capital stock includes the fishing-boats, nets and lines.

A competitive, profit-maximising firm hires workers until marginal product equals zero.

Gertrude Kelp owns three boats that participate in commercial fishing for fresh tuna. As part of her business she hires a captain and several crew members for each boat. In the market for fresh tuna, Gertrude is one of thousands of fishers. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of tuna is negligible relative to the size of the market. -According to the information provided, when Gertrude participates in the labour market to hire crew members for her boats, she is most likely considered a: