Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 19, Problem 2MCQ
To determine
To choose:
The option that correctly explains the cause for the increase in the value of the marginal product of labor.
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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…
For 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?
A firm in a competitive market should hire workers up to the point where the value of the marginal product of labor =
a. the wage
b. total revenue
c. total cost
d. total profit
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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- If the marginal revenue earned by a firm due to an additional unit of worker is less than the marginal cost of hiring him, _____. a.the firm should not hire the worker b.the firm should hire the worker c.the firm should not operate in the long run d.the firm should not differentiate its productsarrow_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_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_forward
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- 10. The following is a total cost curve. Sketch the corresponding marginal cost curve. If the price of output is $3 and there are no fixed costs, what is the profit-maximizing level of output?arrow_forwardDon't answer by pen paperarrow_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_forward
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