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CHAPTER 18 - Chapter18 TheMarkets 1 Thedemand forlabor...

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Chapter 18/The Markets for the Factors of Production 105 Chapter 18 The Markets for the Factors of Production 1. The demand for labor by a particular firm is ultimately derived from a. the productivity of labor. b. the productivity of the firm’s other inputs. c. demand for the firm’s output. d. the market supply of labor. ANSWER: c the demand for the firm’s output. SECTION: INTRO OBJECTIVE: 1 2. If the demand for automobiles increases, which of the following markets would also experience an  increase in demand? 3. Which of the following is an assumption made about a competitive labor market? 4. If eight workers can manufacture 70 tables per day and nine workers can manufacture 90 tables per day, and if tables can be sold for $10 each, the value of marginal product of the ninth worker is SECTION:1 OBJECTIVE: 1 5. An increasing marginal product of labor would be most commonly found a. at high levels of employment. b. in perfect competition. c. at low levels of employment. d. when prices are rising. ANSWER: c at low levels of employment. SECTION:1 OBJECTIVE: 1
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106 Chapter 18/The Markets for the Factors of Production 6. If a firm is a price taker in the labor market, then the value of the marginal product of labor equals  labor’s marginal
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