Exam 15: Resource Markets

Scenario 14.1 A worker in Firm A earns an income of $5,000 per month. He has been offered a job in Firm B where he will be paid a salary of $7,000 per month. -The greater the elasticity of supply of a resource the greater is its economic rent.

Scenario 14.1 A worker in Firm A earns an income of $5,000 per month. He has been offered a job in Firm B where he will be paid a salary of $7,000 per month. -Refer to Scenario 14.1. If the worker joins Firm B, his economic rent is:

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6 In the figure, D = MRP implies demand for labor = Marginal Revenue Product MFC represents Marginal Factor Cost curve S represents the supply curve of labor -If a resource can be put to a single use and has no alternative uses then:

Scenario 14.1 A worker in Firm A earns an income of $5,000 per month. He has been offered a job in Firm B where he will be paid a salary of $7,000 per month. -The negative slope of the demand curve of a resource indicates an inverse relationship between the price of the resource and the quantity demanded.

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6 In the figure, D = MRP implies demand for labor = Marginal Revenue Product MFC represents Marginal Factor Cost curve S represents the supply curve of labor -Which of the following statements is not true?

The table below shows the total output produced by different units of a resource. Assume that the resource and output markets are both perfectly competitive. The equilibrium price of the resource is $15.00, and the equilibrium price of the product is $0.50.Table 14.2 Marginal revenue product (MRP) of a resource is the product of the marginal product of the resource and the marginal revenue. -Refer to Table 14.2. What is the marginal revenue product of the third unit of the resource?

The following table shows output per hour produced by the different units of labor.Table 14.1 The marginal revenue product of a resource is equal to the product of the marginal product of an input and marginal revenue. -According to Table 14.1, if the wage rate is $9 per hour, how many workers should this firm hire?

Scenario 14.1 A worker in Firm A earns an income of $5,000 per month. He has been offered a job in Firm B where he will be paid a salary of $7,000 per month. -If the marginal factor cost is greater than the marginal revenue product of a resource, the producer can increase profits by laying off some units of the resource.

The following figure represents the equilibrium in the labor market.Figure 14.4 In the figure, MFC: Marginal Factor Cost curve D: Demand or the Marginal Revenue Product curve S: Supply curve -A monopsonist firm pays a price to a factor that is:

In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2 In the figure, D: Demand curve for automobiles S₁: Supply curve of automobiles prior to regulation S₂: Supply curve of automobiles after regulation FG: Clean up cost per unit -The marginal factor cost (MFC) is the:

The following figure represents the equilibrium in the labor market.Figure 14.4 In the figure, MFC: Marginal Factor Cost curve D: Demand or the Marginal Revenue Product curve S: Supply curve -According to Figure 14.4, if the government imposes a minimum wage of W₁, what quantity of labor will a competitive labor market hire?

Scenario 14.1 A worker in Firm A earns an income of $5,000 per month. He has been offered a job in Firm B where he will be paid a salary of $7,000 per month. -As the total quantity of land is fixed the payment for land is termed as economic rent.

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6 In the figure, D = MRP implies demand for labor = Marginal Revenue Product MFC represents Marginal Factor Cost curve S represents the supply curve of labor -Transfer earnings of a factor is equal to its:

The figure given below shows the marginal revenue product (MRP) of accountants in a firm.Figure 14.2 MRP = MP X MR -If the resource market is perfectly competitive:

The following figure represents the equilibrium in the labor market.Figure 14.4 In the figure, MFC: Marginal Factor Cost curve D: Demand or the Marginal Revenue Product curve S: Supply curve -Refer to Figure 14.4. A competitive labor market will pay the wage rate _____ and hire _____ units of labor.

The figure given below shows the marginal revenue product (MRP) of accountants in a firm.Figure 14.2 MRP = MP X MR -According to Figure 14.2, the:

Scenario 14.1 A worker in Firm A earns an income of $5,000 per month. He has been offered a job in Firm B where he will be paid a salary of $7,000 per month. -If the price of a product increases, the demand for the resource used in producing that product decreases.

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6 In the figure, D = MRP implies demand for labor = Marginal Revenue Product MFC represents Marginal Factor Cost curve S represents the supply curve of labor -If a resource has a perfectly elastic supply curve then its income is termed as:

Scenario 14.1 A worker in Firm A earns an income of $5,000 per month. He has been offered a job in Firm B where he will be paid a salary of $7,000 per month. -If a particular factor has a specific use, its transfer earning is very high.

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6 In the figure, D = MRP implies demand for labor = Marginal Revenue Product MFC represents Marginal Factor Cost curve S represents the supply curve of labor -The demand for capital, as an input in production, will decrease if: