Exam 19: The Markets for the Factors of Production

Describe the difference between the purchase price of capital and the rental price of capital. If you know the value of marginal product from the flow of capital services, how would you determine the market price for the capital stock?

In a competitive labour market, wages will adjust to equal the marginal product of labour.

A profit-maximising competitive firm that experiences diminishing marginal product of labour must also be experiencing:

Bob has been a private school caretaker for 30 years. For practical purposes, assume that Bob's productivity never changes. What then, if anything, will decrease the value of the labour that Bob performs?

The South African government started to patrol the border and had a policy of returning all refugees to Zimbabwe. This policy would:

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. -Refer to the information provided. Suppose the price of fresh tuna suddenly increases, Gertrude is likely to react by:

The value of the marginal product of any input is equal to the marginal product of that input multiplied by the:

An example of capital would be:

The production function describes the relationship between the variables:

What does a firm's labour demand curve represent?

Factor market analysis could not be complete without some characterisation of:

As the rental price of capital decreases, less capital is used in production and the marginal product of capital increases.

During the Black Death, with fewer workers available to farm the land, an additional unit of land produced less additional output.

A competitive profit-maximising firm hires workers up to the point where the wage equals the price of the final good.

How much labour will a competitive, profit-maximising firm hire?

Grahame has a crocodile farm. He collects eggs from the wild which are hatched on the farm. Suppose flooding is very severe this year and eggs become much harder to find. As a result, Grahame should expect to see the marginal productivity of his land:

Owners of capital earn their income in the form of which of the following? (i) interest (ii) profit (iii) wages

When labour supply increases, the equilibrium wage falls and employment increases.

Which of the following factors of production are most likely to be used by a typical firm? (i) labour (ii) land (iii) equity

Diminishing marginal product is closely related to: