HW4 - ECO 201 Homework #4 Topics 20 through 24: 50 Points...

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ECO 201 – Homework #4 Topics 20 through 24: 50 Points The homework is due by 10PM on Tuesday, July 29. 1. A market in which resources are traded is known as a(n): a. factor market b. perfectly competitive market c. open market d. closed market e. equilibrium market 2. In factor markets, firms __________ and households __________. a. demand resources; supply resources b. supply resources; demand resources c. demand resources; demand goods d. supply resources; demand goods e. supply resources; supply goods 3. The demand for labor by a particular firm is ultimately derived from: a. the productivity of the firm's other inputs b. demand for the firm's output c. the market supply of labor d. the equilibrium wage rate 4. Firms have an incentive to substitute labor for capital as the: a. price of labor decreases. b. marginal product of labor decreases. c. price of labor increases. d. price of capital decreases. 5. The additional output produced when one additional unit of labor is hired is referred to as the __________ of labor. a. marginal revenue product b. marginal revenue c. supply d. marginal product e. total revenue product 6. The marginal revenue product of labor is: a. how much a firm's total profits change as a result of producing one more unit of output. b. how much a firm's total profits change as a result of hiring one more unit of labor. c. how much a firm's total costs change as a result of hiring one more unit of labor. d. how much a firm's total revenues change as a result of hiring one more unit of labor. e. the same as marginal product. 7. As more labor is hired, marginal revenue product of a competitive firm: a. declines because output price declines. b. declines because marginal product of labor declines. c. increases because total revenue increases. d. does not change because marginal revenue is constant.
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8. A profit-seeking firm will hire more labor up to the point where the: a. marginal product of labor equals the wage rate. b. last worker hired adds equally to total revenue and total cost. c. marginal product of labor is at its maximum value. d. value of additional output most greatly exceeds labor's marginal factor cost. 9. The wage rate in a competitive labor market is determined by: a. the skills of workers. b. union contracts. c. the interaction of supply and demand. d. firm’s demand for workers. 10. A firm can maximize profit by hiring labor up to the point where: a. the marginal revenue product equals the wage rate b. the marginal product equals marginal cost c. total revenue equals total cost d. the marginal revenue product equals marginal product e. the marginal revenue product is zero 11. Suppose a competitive firm that is profit maximizing pays a wage of $750 per week and the price of its output is $15. Based on this information, you may surmise that the firm's marginal product is: a. 50 units. b.
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This note was uploaded on 06/23/2008 for the course ECO 201 taught by Professor Mikeadkins during the Spring '08 term at KCTCS.

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HW4 - ECO 201 Homework #4 Topics 20 through 24: 50 Points...

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