Exam 28: The Labor Market: Demand, Supply and Outsourcing

An increase in demand for Blu-ray disc players occurs. Which of the following statements is TRUE for individual firms that produce Blu-ray disc players?

If a firm faces perfectly competitive product and factor markets and the marginal product of labor and capital are 4 and 9, respectively, while the wage rate is $2 and the rental rate on capital is $4, the firm should

The marginal revenue product of labor declines as the number of workers increases because

A firm wanting to maximize profits should operate in such a way that

Which of the following is FALSE regarding the general rule for hiring?

"A firm should continue to hire more workers as long as wages are low." Do you agree or disagree? Why?

A firm that maximizes profits also

Coal and iron ore are complements in the manufacture of steel. An increase in the price of coal would lead to

Suppose a new technology allows firms to substitute mechanical flower pickers for farm laborers. As a result, the demand curve for farm laborers will

Suppose the market for autoworkers is initially in equilibrium, but then suppose the automakers improve working conditions at the plants. What happens in the market for autoworkers?

The change in total output due to the change in one variable input, while holding all other inputs constant, is the

In the long run, input demand becomes more

Suppose the market for tortillas is initially in equilibrium, but then the equilibrium wage rate and the equilibrium quantity of labor both increased. What happened in the market for tortilla?

The additional production resulting from hiring one more worker is

-Refer to the above table. If the price of the good produced is $8, the marginal revenue product of the 12th worker is

In constructing the monopolist's input demand curve, which of the statements is FALSE?

Marginal revenue product is

If workers in an industry become less productive, we would expect the

Assume that a perfectly competitive firm faces a fixed wage rate of $4 and a constant per-unit cost of capital of $2. If the marginal product of labor and capital are 16 and 6, respectively, then to maximize profits the firm should

Outsourcing is