355)
Sam, who owns a carpentry shop, discovered that with 4 laborers he could produce 18 cabinets per
day. With 5 laborers he produced 25 cabinets and with 6 laborers he produced 36 cabinets. What
was the MPP of the 6th laborer?
355)
A)
7 cabinets
B)
36 cabinets
C)
11 cabinets
D)
9 cabinets
356)
A profit maximizing monopolist will hire labor up to the point where
356)
A)
marginal revenue product is less than the wage rate.
B)
marginal revenue product is greater than the wage rate.
C)
marginal revenue product equals than the wage rate.
D)
marginal revenue product equals the price of the product.
C
357)
The additional revenue associated with hiring one additional unit of some factor input, such as
labor, is called
357)
A)
marginal cost.
B)
marginal physical product.
C)
marginal revenue product.
D)
marginal factor cost.
C
C
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
358)
What is the general rule for hiring for a perfectly competitive firm? Show it on a graph. What is the demand
curve for labor on the graph? Explain.
359)
“The market demand curve for labor is the horizontal summation of the labor demand curves of all firms.” Do
you agree or disagree? Why?
360)
Explain the efficiency wage theory.
361)
Suppose the market for autoworkers is initially in equilibrium, but then the automakers purchase capital goods
that are a substitute for workers. What happens in the market for autoworkers? Explain. Now, suppose the
automakers improve working conditions at the plants. What are the effects? Explain.
362)
For a firm that uses land, labor and capital as inputs, how should the inputs be utilized in order to minimize
total costs?
363)
What can cause the demand curve for labor to shift? Explain.
364)
What is marginal factor cost? How is it related to the supply curve of an input?
365)
“A firm should continue to hire more workers as long as wages are low.” Do you agree or disagree? Why?
366)
Suppose the price elasticity of demand for iPods is inelastic. What would you expect about the demand
elasticity for workers producing iPods? Explain.
367)
“Other things being equal, the monopolist hires fewer workers than would be hired than a perfectly competitive
industry.” Do you agree or disagree? Why?
368)
What would make the demand for labor more elastic?
369)
Explain what the profit–maximizing combination of resources is for the perfectly competitive firm.
370)
Show how the profit–maximizing rule for hiring resources is equivalent to the cost–minimizing rule.
371)
What does it mean for a firm to be a price taker in the labor market?
372)
Explain the implications of outsourcing for employment and wages in the domestic and foreign labor markets.
373)
What does a monopolist’s demand curve for labor look like? How does it compare to the market demand curve
for a competitive industry? What does the supply curve of labor to a monopolist look like? Explain.
374)
Explain how the equilibrium wage rate is determined for a perfectly competitive industry and how a firm in
that industry determines its profit maximizing employment level.
375)
What is the marginal revenue product of labor (MRP)? What shape does the MRP curve have? Why?
376)
Suppose a firm employs only capital and labor as inputs. Explain how the firm should allocate its inputs in
order to maximize profits in a perfectly competitive market.
Answer Key
Testname: C28
107
109
110
111