Exam 12: The Factors of Production

An employer operating under conditions of a perfectly competitive labour market will hire labour up to the point where the marginal product of labour equals the wage rate.

The real wage is defined as the nominal wage divided by labour productivity.

-What does the term economic rent mean?

Suppose the marginal product of capital is 80 and the marginal product of labour is 30.If the price of capital is $10 and the price of labour is $3,how should the firm substitute factors?

What is the most likely consequence if a monopsonist hires more labour?

Some form of regulation is needed to ensure that a common property resource is not over extracted.

Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market. -What is the term for the wage rate expressed as a dollar and cents figure?

Which of the following best illustrates the factor market?

What is meant by the term transfer earnings?

What is the engine of economic growth according to Joseph Schumpeter?

What is marginal revenue product and how is calculated?

The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm. -What has happened to the size of Canada's labour force over the last thirty years?

What is meant by the term common property resource?

The world's supply of oil is:

Marginal revenue product is the increase in a firm's total revenue that results from the use of one more unit of input.

What do most economists think is the socially optimum extraction rate of a natural resource such as oil?

-Refer to the graph above to answer this question.Suppose that the original supply and demand curves for labour are S₁ and D₁ and that the market is in equilibrium at point e.What can you conclude has happened if a new equilibrium at b occurs?

Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market. -What is meant by the labour force supply?

All of the following statements,except one,are correct concerning the explanation of wage rate differentials.Which is the exception?

What is the term for the increase in a firm's total revenue which results from the use of one more unit of input?