Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 18, Problem 2QCMC
To determine
Determining factor of labor demand curve in a profit maximizing firm.
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The marginal product of labor is the increase in total product from a
Select one:
a.
one dollar increase in the wage rate, while holding the price of capital constant.
b.
one unit increase in the quantity of labor, while holding the quantity of capital constant.
c.
one unit increase in the quantity of labor, while also increasing the quantity of capital by one unit.
d.
one percent increase in the wage rate, while also increasing the price of capital by one percent.
As employment of labor increases, the marginal product of labor will eventually decrease because
A) profitable firms employ better workers first.
B) there's a limit to how product individual workers can be.
C) fixed capital means additional workers are less productive than the workers who were employed before.
Which 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 labor
Chapter 18 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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Similar questions
- Your enterprising uncle opens a sandwich shop that employs 11 people. The employees are paid $15 per hour, and a sandwich sells for $3. If your uncle is maximizing his profit, the value of the marginal product of the last worker he hired is , and that worker's marginal product is sandwiches per hour.arrow_forwardQ. 1 Analyze and graph the Product Effect and the Substitution Effect in labor demand in the face of an increase in labor price.arrow_forwardThe demand for labor depends on ______ and _______. a) the supply of labor; the marginal product of labor b) the supply of labor; the price of output produced c) the rate of price inflation; the price of the output produced d) the marginal product of labor; the price of output producedarrow_forward
- 1. Explain how a firm’s production function is related to its marginal product of labor, how a firm’s marginal product of labor is related to the value of its marginal product, and how a firm’s value of marginal product is related to its demand for labor. 2. Give two examples of events that could shift the demand for labor, and explain why they do so.arrow_forwardA change in wages causes a:(1) Shift in the marginal revenue product curve for labour;(2) Shift in the marginal physical product curve for labour;(3) Shift in the marginal revenue curve for labour;(4) Movement along the demand curve for labour. Q.1.20 An individual’s labour supply curve is positively sloped when:(1) The substitution effect of a wage increase is positive;(2) The substitution effect is greater than the income effect;(3) The income effect of wage increase is negative;(4) The substitution effect is less than the income effect.arrow_forwardAssume the labor and kapital are purchase in a perfectly competitive market and the final product is sold in a perfectly competitive market. LABOR P= $4 KAPITAL P=$6 ________________________________________________________________________________________________ resource total prod marg prod total rev MRP resource total prod marg prod total rev MRP LABOR KAPITAL 0 0 0 0 1 16 $32 1 24 $48 2 28 $56 2 41…arrow_forward
- True or false explain this a) In a competitive labor market, the price of labor is determined by the industry that hires the labor. b) In a competitive labor market if the wage is $10.00 than the MRC of labor is $10.00. c) labor and capital can never be substituted for each other. Explain it earlyarrow_forwardIllustrate and examine how the individual supply of labor curve demonstrate the way an individual divides his/her time between work and leisurearrow_forwarddemand curve for labor is determined bya. the opportunity oost of wO<kers' time. b. the value of the marginal product of labor.c. offsetting income and substi tution effects.d. the value of the marginal product of capital.arrow_forward
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