Exam 24: Resource Markets

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 According to Figure 14.6, what is the wage paid by a monopsonist?

After hiring 151 units of the variable input (say labor)a firm determines the MFC to be $0.33 and the MRP to be $0.30.The firm should:

A firm will demand more units of a resource if:

Why is the marginal revenue product curve of a factor negatively sloped?

If the resource market is perfectly competitive:

The marginal-revenue product (MRP)is the:

Monopsonists tend to exploit the resources as they are the sole employers of the resources.

Economic rent is the sum of actual earning and transfer earning.

The figure given below shows the marginal revenue product (MRP)of accountants in a firm. Figure 14.2 MRP = MP ´ MR According to Figure 14.2, if the marginal cost of the resource is $600:

Which of the following statements best illustrates the relationship between the market for products and the market for resources?

An automobile manufacturer uses land, labor, capital, and entrepreneurial ability to produce cars and trucks.If the price of trucks increases, the automobile manufacturer would not _____.

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 opportunity cost is:

Households' expenditure on goods and services are sources of revenue for the firms.

If the labor market is perfectly competitive the wage rate will be less than the marginal revenue product of labor.

A market is classified as a monopsony will arise when there is only one seller of the product.

Under perfect competition in the resource market, the marginal factor cost curve:

The producer can raise the level of profit by hiring more units of a resource if:

Which of the following goods is likely to have a derived demand?

During the recession witnessed in early 2001, many firms laid off their employees and downsized.The reason for this decrease in the demand for employees was:

As the total quantity of land is fixed the payment for land is termed as economic rent.