A firm uses both labor and machines in production. Explain why an increase in the average wage rate causes both a movement along the demand curve and a shift of the demand curve. An increase in the average wage causes a movement O A. up the labor demand curve because the wage becomes greater than the marginal cost of labor. O B. down the labor demand curve because the wage becomes greater than the marginal revenue product of labor. O C. up the labor demand curve because the marginal cost of labor becomes greater than the marginal revenue from an additional unit of output. O D. up the labor demand curve because the marginal cost of labor becomes greater than the marginal revenue product of labor. O E. down the labor demand curve because the marginal cost of labor becomes greater than the marginal product of labor.

A firm uses both labor and machines in production. Explain why an increase in the average wage rate causes both a movement along the demand curve and a shift of the demand curve. An increase in the average wage causes a movement O A. up the labor demand curve because the wage becomes greater than the marginal cost of labor. O B. down the labor demand curve because the wage becomes greater than the marginal revenue product of labor. O C. up the labor demand curve because the marginal cost of labor becomes greater than the marginal revenue from an additional unit of output. O D. up the labor demand curve because the marginal cost of labor becomes greater than the marginal revenue product of labor. O E. down the labor demand curve because the marginal cost of labor becomes greater than the marginal product of labor.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The demand for labor curve of nurses shifts rightward if the O A. supply of labor curve for nurses shifts rightward. O B. value of marginal product of nurses increases. OC. wage rate paid to nurses rises. O D. supply of labor curve for nurses shifts leftward. O E. wage rate paid to nurses falls.
A perfectly competitive firm's production function is Q=4LK where Q is the amount produced, L is the amount of labour hired and K is the amount of capital used. P is the price that the firm gets for its product. What is the marginal revenue product of labour? O 8PK O 4L O 4PK O PL
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Suppose demand for labor is given by the equation P = 75 – 20 and the supply for labor is given by the equation P = 15 + 4Q. Price is the hourly wage rate in dollars and quantity measures the number of workers. Imposing a minimum wage of $70 will result in O None of the above. O Unemployment of 0 and firms will hire 15 O Labor shortage of 0 and firms will hire 10 O Labor surplus of 15 and firms will hire 20 workers