1: The short-run demand curve slopes downward because: A: The labour supply curve slopes upward B: of the law of diminishing marginal returns to labour C: As employment levels increase, firms are forced to employ workers of lower quality D: Of the law of diminishing marginal utility E: Of the wage elasticity of labour demand
3
1: The short-run
A: The labour supply curve slopes upward
B: of the law of diminishing marginal returns to labour
C: As employment levels increase, firms are forced to employ workers of lower quality
D: Of the law of diminishing
E: Of the wage
2: With respect to labour demand choice in the long run, which of the following statements is false? MPPL = marginal physical product of labour, MPPK = marginal physical product of capital, w = wage, and r =
A: The rate at which capital can be substituted for labour in the technology of production is equal to the rate at which capital and labour can be exchanged in the market
B: MPPL/MPPK = w/r
C: MPPL * r = MPPK* w
D: The profit made per worker is maximized
E: The
3: With respect to the labour demand choice in the long run, which of the following statements is false? MPPL = marginal physical product of labour, MPPK = marginal physical product of capital, w = wage, and r = rate of return on capital
A: MPPL/MPPK = w/r.
B: W = VMPL and r = VMPK
C: VMPL/VMPK = w/r.
D: The equilibrium is situated at the point of tangency between the highest isoquant and the isocost curve
E: Profits are maximized.
4:Suppose that the wage elasticity of labour demand is -0.55. Which of the following statements is true?
A: A $ 1 increase in wages corresponds to a 0.55 unit decrease in quantity demanded of labour
B: A $ 0.55 increase in wages corresponds to a 1 % decrease in quantity demanded of labour
C: A 0.55 % increase in wages corresponds to a 1 % decrease in quantity demanded of labour
D: A $ 1 increase in wages corresponds to a 0.55 % decrease in quantity demanded of labour
E: A 1 % increase in wages corresponds to a 0.55 % decrease in quantity demanded of labour
Step by step
Solved in 2 steps
