The output of workers at a factory depends on the number of supervisors employed.The factory sells its good in a competitive product market at a price of P = $5.The daily wage of supervisors is W = $600.Fill in the MPL and MRPL columns in the table below. \[\begin{array} { | c | c | c | c | } \hline \text { Supervisors } & \begin{array} { c } \text { Output (units } \\ \text { per day) } \end{array} & \begin{array} { c } \text { Marginal } \\ \text { Product } \\ \left( M _ { \mathrm { L } } \right) \end{array} & \begin{array} { c } \text { Marginal } \\ \text { Revenue Product } \\ \left( \mathrm { MRP } _ { \mathrm { L } } \right) \end{array} \\ \hline 0 & 100 & & \\ \hline 1 & 500 & & \\ \hline 2 & 860 & & \\ \hline 3 & 1160 & & \\ \hline 4 & 1400 & & \\ \hline 5 & 1560 & & \\ \hline 6 & 1640 & & \\ \hline 7 & 1680 & & \\ \hline 8 & 1680 & & \\ \hline \end{array}\] How many supervisors should the firm employ? Explain why.

@#IMG-DLM&_TB3580_00_TB3580_00_TB3580_00_TB3580_00

Table 3.1 \[\begin{array} { c c } \text { Number of Workers } & \begin{array} { c } \text { Total \# of Pots } \\ \text { Produced Per Day } \end{array} \\ \hline 0 & 0 \\ 1 & 6 \\ 2 & 13 \\ 3 & 18 \\ 4 & 21 \\ 5 & 23 \\ 6 & 22 \\ \hline \end{array}\] -Referring to Table 3.1,if wages are $50.00 per day and pots sell for $20.00 each,how many potters will the firm hire?

A) two B) three C) four D) five A) two B) three C) four D) five

Table 3.1 \[\begin{array} { c c } \text { Number of Workers } & \begin{array} { c } \text { Total \# of Pots } \\ \text { Produced Per Day } \end{array} \\ \hline 0 & 0 \\ 1 & 6 \\ 2 & 13 \\ 3 & 18 \\ 4 & 21 \\ 5 & 23 \\ 6 & 22 \\ \hline \end{array}\] -Referring to Table 3.1,diminishing marginal returns begins with the ________ employee.

A) first B) second C) third D) sixth A) first B) second C) third D) sixth

Exam 3: The Demand for Labor

Suppose that the marginal revenue product function for the firm is MRPL = 40 - .75L.Assume that the firm hires labor in a competitive labor market at a wage of W = $10 per hour.Explain why employment of L = 20 is not profit maximizing (show exactly how profit could be increased).What is the profit maximizing level of employment for this firm?

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(Essay)

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Question 1

Correct Answer:

Verified

L = 20 is not profit maximizing because MRP > W at this employment level.Given L = 20,MRP = $25 while W = $10.Hence the marginal worker contributes considerably more to revenue than to cost at L = 20.The firm should expand employment as long as MRP > W = $10,as employment of all such workers is profit increasing.The profit maximizing level of employment occurs where MRP = W,which is at L = 40 in this problem.

If a tax is placed on an employer,

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Question 2

Correct Answer:

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B

If the hourly wage is $50 and the price of output is $25,then,in the short run,

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(Multiple Choice)

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Question 3

Correct Answer:

Verified

B

Workers will bear less of a payroll tax if

(Multiple Choice)

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Question 4

Declining marginal product of labor

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Question 5

If two inputs are substitutes in production,and an increase in the price of one input shifts the demand curve for the other input to the left,then

(Multiple Choice)

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Question 6

The firm's labor demand curve in the short run

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Question 7

If employers are paid a subsidy of $0.75 per hour for hiring teenaged workers,then

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Question 8

Consider a firm using three inputs: unskilled labor,skilled labor,and capital.Unskilled labor and capital are substitutes in production,while skilled labor and capital are complements in production.If the price of capital decreases,then

(Multiple Choice)

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Question 9

Consider the short run production function for a hypothetical restaurant shown in the table.Cooks are equally talented and hardworking.The MPL column in the table illustrates

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Question 10

The marginal product of labor tells us

(Multiple Choice)

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Question 11

A competitive industry hires 1000 workers.The 1000th worker adds $500 a week to their employer's revenue.If a monopoly took over the industry,then the 1000th worker would likely

(Multiple Choice)

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Question 12

Suppose that a firm rents labor services in a competitive labor market where the equilibrium wage rate is $15 per hour.Sketch the labor supply curve that the firm faces (label the axes of your graph and relevant numeric reference points appropriately).Explain why the graph looks as you have drawn it.

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Question 13

When a firm moves to a higher isoquant,

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Question 14

State and discuss the two kinds of objections raised to the marginal productivity theory of labor demand.

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Question 15

If a payroll tax of $X per hour is collected from employers,then the

(Multiple Choice)

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Question 16

The output of workers at a factory depends on the number of supervisors employed.The factory sells its good in a competitive product market at a price of P = $5.The daily wage of supervisors is W = $600.Fill in the MPL and MRPL columns in the table below. Supervisors Output (units per day) Marginal Product Marginal Revenue Product 0 100 1 500 2 860 3 1160 4 1400 5 1560 6 1640 7 1680 8 1680 How many supervisors should the firm employ? Explain why.

(Essay)

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Question 17

Table 3.1 Number of Workers Total \# of Pots Produced Per Day 0 0 1 6 2 13 3 18 4 21 5 23 6 22 -Referring to Table 3.1,if wages are $50.00 per day and pots sell for $20.00 each,how many potters will the firm hire?

(Multiple Choice)

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Question 18

For two substitutes in production,if the scale effect dominates,

(Multiple Choice)

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Question 19

Table 3.1 Number of Workers Total \# of Pots Produced Per Day 0 0 1 6 2 13 3 18 4 21 5 23 6 22 -Referring to Table 3.1,diminishing marginal returns begins with the ________ employee.

(Multiple Choice)

4.9/5

(79)

Question 20

If a tax is placed on an employer,

If the hourly wage is $50 and the price of output is $25,then,in the short run,

Workers will bear less of a payroll tax if

Declining marginal product of labor

If two inputs are substitutes in production,and an increase in the price of one input shifts the demand curve for the other input to the left,then

The firm's labor demand curve in the short run

If employers are paid a subsidy of $0.75 per hour for hiring teenaged workers,then

Consider a firm using three inputs: unskilled labor,skilled labor,and capital.Unskilled labor and capital are substitutes in production,while skilled labor and capital are complements in production.If the price of capital decreases,then

Consider the short run production function for a hypothetical restaurant shown in the table.Cooks are equally talented and hardworking.The MPL column in the table illustrates

The marginal product of labor tells us

A competitive industry hires 1000 workers.The 1000th worker adds $500 a week to their employer's revenue.If a monopoly took over the industry,then the 1000th worker would likely

When a firm moves to a higher isoquant,

State and discuss the two kinds of objections raised to the marginal productivity theory of labor demand.

If a payroll tax of $X per hour is collected from employers,then the

Table 3.1 Number of Workers Total \# of Pots Produced Per Day 0 0 1 6 2 13 3 18 4 21 5 23 6 22 -Referring to Table 3.1,if wages are $50.00 per day and pots sell for $20.00 each,how many potters will the firm hire?

For two substitutes in production,if the scale effect dominates,

Table 3.1 Number of Workers Total \# of Pots Produced Per Day 0 0 1 6 2 13 3 18 4 21 5 23 6 22 -Referring to Table 3.1,diminishing marginal returns begins with the ________ employee.

Introduction

Overview of the Labor Market

Labor Demand Elasticities

Frictions in the Labor Market

Supply of Labor to the Economy: The Decision to Work

Labor Supply: Household Production, the Family, and the Life Cycle

Compensating Wage Differentials and Labor Markets

Investments in Human Capital: Education and Training

Worker Mobility: Migration, Immigration, and Turnover

Pay and Productivity: Wage Determination within the Firm

Gender,Race,and Ethnicity in the Labor Market

Unions and the Labor Market

Unemployment

Inequality in Earnings

The Labor-Market Effects of International Trade and Production Sharing

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