Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 19, Problem 1MCQ
To determine
To choose:
The option that correctly explains about the way in which the
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What is the elasticity of demand for labor?
A measure of how upset your boss is when his employees ask for more money.
O A measure of how responsive firms' supply of labor is to changes in the wage rate.
A measure of the extra revenue earned by the firm resulting from hiring one more unit of labor.
A measure of how much firms' profits are affected by changes to wages.
A measure of how sensitive the amount of labor firms will hire is to changes in the wage rate.
A measure of the sensitivity of wage rates to the unemployment rate.
Suppose you discover that your boss has a demand for labor that is very elastic. What does this imply in terms of
y
requesting a raise?
Your boss may likely eliminate some positions (fire some people) if wages rise.
Your boss will maintain the exact same labor force (not fire or hire anyone) if wages rise.
Your boss is a flexible and undertanding person, so he or she is likely to accomodate any request…
6. The demand for will decrease in response to an Increase productivity b. better training of all laborers c. a decrease in the supply of labor d. decreased demand in markets for consumer goods and services 7. In a purely competitive market for economic resources, a firm's marginal revenue product curve for a factor could decrease as a result of an increase in the resource's marginal product b. decrease in the demand for the firm's product Cincrease in the prices of all other resource inputs d. decrease in the supply curve for the economic resource 8. Other things being equal. If a once - competitive firm attains a high degree of monopoly power. its resource demand curve will a. become perfectly inelastic b. remains perfectly elastic c. become more elastic d. become more inelastic 9. Other things being the same if the demand for labor is inelastic a decreases in wage rates will result in greater payrolls b. increases in wage rates will result in greater payrolls c. decreases in wage…
QUESTION 9
A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of soybeans is $1 a bushel, the
wage rate is $12, the farmer employs six workers and the marginal product of the sixth worker is 10. What would you advise this farmer to do?
O Increase employment because the wage paid is less than the marginal revenue product.
O Reduce employment because the wage paid is greater than the marginal revenue product.
O Do nothing because the wage rate and the marginal product of the last worker hired are equal.
O Reduce the product price so that the wage and marginal revenue product will be equal.
Chapter 19 Solutions
Foundations of Economics (8th Edition)
Ch. 19 - Prob. 1SPPACh. 19 - Prob. 2SPPACh. 19 - Prob. 3SPPACh. 19 - Prob. 4SPPACh. 19 - Prob. 5SPPACh. 19 - Prob. 6SPPACh. 19 - Prob. 7SPPACh. 19 - Prob. 8SPPACh. 19 - Prob. 9SPPACh. 19 - Prob. 10SPPA
Ch. 19 - Prob. 1IAPACh. 19 - Prob. 2IAPACh. 19 - Prob. 3IAPACh. 19 - Prob. 4IAPACh. 19 - Prob. 5IAPACh. 19 - Prob. 6IAPACh. 19 - Prob. 7IAPACh. 19 - Prob. 8IAPACh. 19 - Prob. 9IAPACh. 19 - Prob. 1MCQCh. 19 - Prob. 2MCQCh. 19 - Prob. 3MCQCh. 19 - Prob. 4MCQCh. 19 - Prob. 5MCQCh. 19 - Prob. 6MCQCh. 19 - Prob. 7MCQ
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- Question 37 A firm's demand curve for labor shifts when the wage rate changes O the cost of its material changes none of the answers are correct. the number of available workers changes O The price of its product changesarrow_forwardWhich of the following can reduce the marginal revenue product of labor? Select one: a. A reduction in the demand for firms– products. b. A reduction in workers– supply of labor to firms. c. A decrease in firms– demand for inputs that substitute for labor. d. An increase in the extra output firms gain from adding another unit of labor.arrow_forwardDiscuss, thank you What does the Law of Supply state? Why do supply and demand curves slope in opposite directions? How is the elasticity of supply affected by the way a product is produced? Explain the difference between a total product and a marginal product. What is the difference between a fixed cost and a variable cost? Note: use references from published scientific articlesarrow_forward
- Question 40 A firm's demand curve for labor shifts to the right when? the number of available workers increases. none of the answers are correct. the demand for the firm's product increases. O the supply curve of labor shifts the price of its product decreases.arrow_forward56 48 40 32 24 16 0 - Total Cost is $ 2400 4800 7200 The graph shows the short-run cost curves for a firm in a perfectly competitive market. The firm's only variable input is labour and the wage rate is $36. If market price is $48: - profit-maximizing level of output is - Total Fixed Cost is $ - for the profit maximizing output the firm should hire - the firm's profit is $ If market price is $16: - profit-maximizing level of output is 9600 - the firm's profit is $ SMC ATC units of labour. AVCarrow_forwardAn increase in the price of the firm's output leads to a movement upward along the demand for labor curve. b. rightward shift of the demand for labor curve. movement downward along the demand for labor curve. d. leftward shift of the demand for labor curve.arrow_forward
- Why is the long run labor demand curve more elastic than the demand for labor in the short run? Group of answer choices a. In the long run, firms are better able to substitute capital for labor than in the short run. b. Firms are more likely to shut down in the long run c. Firms face diseconomies of scale in the short run, but economies of scale in the long run d. The demand for labor is perfectly inelastic in the short run, but perfectly elastic in the long runarrow_forwardWhich of the following determines the firm's demand curve for labor? a.The size of the labor force b.The marginal product of labor c.The total product of labor d.The average product of laborarrow_forwardPlease fully explainarrow_forward
- The demand for a factor of production (productive resource) is derived from the demand for the good the factor produces True Falsearrow_forwardFor each of the following determine the impact on the demand or the supply of labor and the effect on the equilibrium wage and quantity of labor employed. a. An increase in the price of capital. b. A union is formed which uses collective bargaining to obtain higher wages for its members. c. The marginal productivity of workers rises. d. People desire leisure more than ever before (e.g. it is Christmas Day). e. The wages offered in other labor markets requiring similar skills are now offering substantially higher wages. f. The fringe (non-monetary) benefits offered in this market have increased substantially. g. The government has just adopted an "open-door' immigration policy?arrow_forwardWill decrea n he fong run, assume a firm uses both labor and capital to produce 25 units of output. The marginal product of the last unit of labor being employed is 100; the marginal product of the last unit of capital being employed is 500. The wage rate of labor is $10. If the firm is minimizing the cost of producing 25 units of output, what must be the unit price of capital?arrow_forward
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