Exam 19: The Markets for the Factors of Production

As the rental price of capital increases, less capital is used in production.

Because of diminishing returns, a factor in abundant supply has a:

Graph 18-2 -Refer to Graph 18-2. If the price of apples falls, which of the following will happen? (i) the equilibrium quantity of labour will exceed L₁ (ii) the equilibrium wage paid to apple pickers will exceed W₁ (iii) the demand curve will shift down

The recent earthquakes in Christchurch, New Zealand has destroyed much of the infrastructure used to manage the data entry of wages for teachers and a number of commercial operations in the country. Describe the effect of the earthquake on the marginal productivity of land, labour and capital. How would the earthquake affect the price of inputs? Provide some examples.

Which of the following could increase labour demand?

Which of the following could decrease labour demand?

To calculate a worker's contribution to a firm's revenue, a firm should:

Which of the following best illustrates the concept of 'derived demand'?

Changes in supply and demand in the labour market will cause changes in wages.

When a firm decides to retain its earnings instead of pay dividends, the shareholders are not being rewarded.

Competitive firms decide how much output to sell by producing output until the price of the good equals marginal:

When workers are able to augment their stock of human capital, they can expect to:

Table 18-1 -Refer to Table 18-1. A profit-maximising firm will hire workers as long as the value of the marginal product of labour equals or exceeds:

The contribution to profit from an additional worker can be measured by the change in:

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. -According to the information provided, if Amy takes fewer hours of leisure in the summer than in the winter we can assume that her labour supply curve:

When a labour market experiences a surplus of labour, there is downward pressure on:

Identify the conditions where the labour demand curve will shift? (i) there is a change in productivity (ii) there is a change in output prices (iii) there is a change in wage levels

Technological progress has led to a decrease in the demand for labour

What happens to the labour supply curves in both countries when New Zealand workers immigrate to the Australia?

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. If Gertrude is a competitor in both the fresh tuna market and the market for crew workers, she is called a price: