Study for Econ
Which of the following is an example of a factor of production?
land
Which of the following is not an example of a factor of production?
interest
Because a firm's demand for a factor of production is derived from its decision to supply a good in the market, it is called a
derived demand.
The basic tools of supply and demand apply to
both markets for goods and services and markets for labor services
The marginal product of labor is defined as the change in
output per additional unit of labo
Diminishing marginal product is closely related to
increasing marginal cost.
Diminishing marginal product occurs when
the marginal product of an input decreases as the quantity of the input increases.
Sally runs a hair styling salon. Sally is a profit-maximizing owner whose firm operates in a competitive market. The marginal cost of a haircut is $11. What is the maximum wage that Sally will pay her stylists?
There is insufficient information to answer this question
Diane's Auto World installs tires on automobiles, light trucks, and sport utility vehicles. She is a profitmaximizing business owner whose firm operates in a competitive market. The marginal cost of installing a tire is $10. The marginal productivity of the last worker that Diane hired was 2 tires per hour. What is the maximum hourly wage that Diane was willing to pay the last worker hired?
$20
To maximize profit, a competitive firm hires workers up to the point of intersection of the
value of marginal product curve and the wage line
To maximize profit, a competitive firm hires workers up to the point of intersection of the
value of marginal product curve and the wage line
The negative slope of the value of marginal product curve is most easily explained by
diminishing marginal product.
If the value of the marginal product of labor exceeds the wage, then hiring another worker increases the firm's
profit.
total cost.
total revenue. All of the above are correc
Competitive firms that maximize profits will hire workers until the value of the marginal product of labor
equals the wage
A competitive firm sells its output for $30 per unit. The marginal product of the 10th worker is 20 units of output per day; the marginal product of the 11th worker is 16 units of output per day. The firm pays its workers a wage of $150 per day. For the 11th worker, the value of the marginal product of labor is
$480.
Refer to Figure 18-4. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the price of breakfast pastries falls, what happens in the market for bakers?
Demand decreases from D2 to D1.
Refer to Figure 18-4. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the price of breakfast pastries rises, what happens in the market for bakers?
Demand increases from D1 to D2.
Refer to Figure 18-4. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If bakeries adopt new labor-saving technologies, what happens in the market for bakers?
Demand decreases from D2 to D1.
Refer to Figure 18-4. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If bakeries adopt new labor-augmenting technologies, what happens in the market for bakers?
Demand increases from D1 to D2
Refer to Figure 18-4. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the supply of commercial-grade ovens in which the bakers bake their breads and pastries increases, what happens in the market for bakers?
Demand increases from D1 to D2.
Refer to Figure 18-4. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the supply of commercial-grade ovens in which the bakers bake their breads and pastries decreases, what happens in the market for bakers?
Demand decreases from D2 to D1.
For a competitive, profit-maximizing firm, the labor demand curve is the same as the
value of marginal product curve.
Which of the following events could increase the demand for labor?
An increase in the marginal productivity of workers
Which of the following events could decrease the demand for labor?
A decrease in demand for the final product produced by labor
When we focus on the firm as a supplier of a good or a service, we assume that the firm is a profit maximizer. When we focus on the firm as a demander of labor, we assume that the firm's objective is to
maximize profit.