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Basic review questions over demand for labor
Flashcards
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Questions
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Answers
1
MP of Labor = 20, wage = $5, MP of capital = 80, what is the rental rate?
20
100
40
.25
2
Any firm maximizing profit will hire labor until
MCL = MC
MRP falls to zero
Wage is equal to MRP
Wage exceeds MRP
3
The hiring firm in the diagram is a
Bilateral monopoly
Monopolist
Wage Taker
Monoposony
4
The production function gets flatter as output rises because of
Increasing MCL
Diminishing marginal product
Increasing MRP
Decreasing MCL
5
In a monopsony
MCL is not related to wage
MCL > Wage
MCL = Wage
MCL < Wage
6
An increase in revenue resulting from the addition of one more worker is known as
Marginal Product
Marginal Revenue
Marginal Revenue Product
Marginal Cost of Labor
7
A firm is maximizing profits. MP of labor is 10 and the wage is $20. Which is true?
ATC = $.50
MCL = $10
MRP = 10
Product price = $2
8
A labor market is perfectly competitive. An increase in the product price will cause
MCL to increase
MRP to decrease
MCL to decrease
MRP to increase
9
Diminishing marginal product occurs when the next worker generates__________ the prior worker
An amount equal to
An amount dependent on
More than
Less than
10
When the labor supply in a competitive market increases, what happens to wages and employment?
Increase/Decrease
Increase/Increase
Decrease/Increase
Decrease/Decrease
11
The product price is $2 and the last worker hired had an MP of 5. At a competitive wage of $5
The last worker increased profit
The last worker decreased profit
MRP wil rise with the next worker hired
MCL will rise with the next worker hired
12
MP of the last worker is 10, price is $10 and wage is $125.
Profit will rise with the next worker
Wage will rise with the next worker
The last worker decreased profit
The last worker increased profit
13
Which of the following would cause the firm's labor demand curve to shift left?
An increase in worker productivity
An increase in labor supply
A decrease in worker productivity
A decrease in the supply of labor
14
If a firm can sell its output for $5 and it must pay workers $10 per hour, workers must produce
At least 5 units
No more than 1 unit
Zero units compared to the prior worker
At least 2 units
15
An increase in the market wage for a perfectly competitive firm will
Cause the profit maximizing quantity of labor to fall
Have no effect on the profit maximizing quantity of labor
Shift the firm's labor supply curve down
Shift the firm's labor demand to the left
16
Compared to a perfect labor market, a monopsony
Hires fewer workers at a higher wage
Hires more workers at a lower wage
Hires more workers at a higher wage
Hires fewer workers at a lower wage
17
The market demand curve for labor shifts to the right.
Worker MRP will increase
Product price will increas
Quantity of labor demanded will increase
MCL will increase
