A
from the graph identify the equilibrium wage rate, the employment level, the
Concept Introduction:
Economic Rent: the extra amount earned by a resource (e.g. land, capital, or labor) by the quality of its current use
Opportunity Cost: the next best alternative forgone when making a decision between choices
Equilibrium wage rate: the intersection of demand and supply of labor
Demand for labor: this is a concept that defines the amount of demand for labor that an economy or firm is willing to employ at a given point of time.
B
the demand for labor, new equilibrium wage rate, employment level, Economic rent and opportunity cost in case there is an increase in the price of a substitute resource.
Concept Introduction:
Economic Rent: the extra amount earned by a resource (e.g. land, capital, or labor) by the quality of its current use
Opportunity Cost: the next best alternative forgone when making a decision between choices
Equilibrium wage rate: the intersection of demand and supply of labor
Demand for labor: this is a concept that defines the amount of demand for labor that an economy or firm is willing to employ at a given point of time.
C
The effect on the demand for labor when demand for the final product decreases, the new equilibrium wage rate and employment level and to determine whether there is a change in the economic rent and opportunity cost
Concept Introduction:
Economic Rent: the extra amount earned by a resource (e.g. land, capital, or labor) by the quality of its current use
Opportunity Cost: the next best alternative forgone when making a decision between choices
Equilibrium wage rate: the intersection of demand and supply of labor
Demand for labor: this is a concept that defines the amount of demand for labor that an economy or firm is willing to employ at a given point of time.
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Chapter 11 Solutions
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
- 1&2 are separate questions. 1. The marginal revenue product of a factor shows how much an additional unit of a factor adds to - the level of production - dollar revenue. - profitability. - unit costs. 2. A profit‑maximizing firm operating in a perfectly competitive market will add new units of a factor of production until - marginal revenue product equals factor price. - marginal product equals factor price. - marginal revenue product equals marginal product. - marginal revenue product equals marginal revenue.arrow_forward7 - : What is it called when the economy is deprived of the production and the gain of this factor if the labor is not employed? a) Ta employment B) Increase in crimes NS) Direct product and revenue loss D) loss of human capital TO) natural unemploymentarrow_forwardQ-1. How would you describe the relationship between labor productivity and labor earnings over the last several decades? A. Labor productivity declined after 1990, but labor compensation continued to grow. B. Labor compensation and productivity grew very similarly until the mid-1970s, and after that productivity grew faster than labor compensation. C. Labor compensation and productivity grew very similarly until the mid-1970s, and after that labor compensation grew more rapidly than productivity did. D. Labor productivity and labor compensation grew at the same rate, as they always must according to our model. Q-2. Which of the following will NOT result in a shift in the labor demand curve? A. New technology that raises the marginal physical product of labor. B. An increase in the wage. C. A decrease in the price of the good produced. D. All of these will shift the labor demand curve. PLEASE SOLVE BOTH QUETIONSarrow_forward
- Hydraulic fracturing (tracking) has the potential to significantly increase the amount of natural gas produced in the United States. If a large percentage of factories and utility companies use natural gas, what will happen to output, the price level, and employment as tracking becomes more widely used?arrow_forward1. Why does price minus extraction cost rise at the rate of interest in a competitive market for an exhaustible resource? In a competitive market for an exhaustible resource, the user cost of producing an exhaustible resource rises at the rate of interest because.. a. Exhaustible resources should be extracted if price minus marginal cost rises faster than the rate of interest. b. Exhaustible resources should be unextracted if price minus marginal cost rises faster than the rate of interest. c. Price minus marginal cost is less than marginal revenue minus marginal cost d. When price minus marginal cost rises at the rate of interest, marginal revenue minus marginal cost rises faster than the rate of interest.arrow_forwardH6. Your mother owns and runs an arts and craft store, and the business is doing well. She would have otherwise been employed as a high school geography teacher making $80,000 a year or as an interior decorator making $68,000 a year. She owns the building in which her shop is located, which she could have rented out for $24,000 a year. Her annual revenue from the shop is $430,000 and she employs four workers, each of whom earns $30,000 a year. On average, she spends $206,000 per year traveling, purchasing, and shipping unique merchandise for resale at her store. Based on this information, do you think you should encourage her to return to teaching? Explain your advice with the help of calculations on her opportunity costs, accounting profit, and economic profit.arrow_forward
- 5) The United States has an unemployment compensation program that provides income for those out of work. In this case, unemployment is not a problem, because the unemployment compensation program is not available to workers in all occupations until they find another job. still a problem, because the unemployment compensation program merely gives the unemployed enough funds for basic needs. still a problem, because the unemployment compensation program is not available to workers in the service occupations. not a problem, because the unemployment compensation program gives the unemployed enough funds for basic needs.arrow_forward6. Average nominal wages are higher in large cities than small cities. This is consistent withA. Large cities are more productive.B. Large cities are more skilled.C. Wages aside, large cities are less attractive places to live.D. All of the above.arrow_forward
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