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# Ch14 - CHAPTER 14 Markets For Factor Inputs MULTIPLE CHOICE...

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CHAPTER 14 Markets For Factor Inputs MULTIPLE CHOICE Section 14.1 easy 1. A firm should hire more labor when the marginal revenue product of labor a. equals the wage rate. b. exceeds the wage rate. c. is less than the wage rate. d. Any of these can be true. e. None of these are true. easy 2. The marginal revenue product of labor is equal to easy 3. The marginal revenue product can be expressed as the easy 4. Other things being equal, the marginal revenue product (MRP) curve for a competitive seller easy 5. What can account for the negative slope of the marginal revenue product curve? a. Diminishing marginal utility. b. Diminishing marginal returns. c. Monopsony power. d. All workers eventually begin slacking. e. None of the above. easy 6. In the competitive output market for good Q, marginal revenue product for an input X can be expressed as 242

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CHAPTER 14 TEST BANK MARKETS FOR FACTOR INPUTS SIXTH EDITION easy 7 If the market for labor is perfectly competitive, the profit maximizing level of labor occurs where a. MRP L < W (the wage). b. MRP L = P (the output price). c. MRP L just exceeds W. d. MRP L = W. e. none of the above. Scenario 1: You are the manager of a firm producing green chalk. The marginal product of labor is: MP L = 24L -1/2 Suppose that the firm is a competitor in the green chalk market. The price of green chalk is \$1 per unit. Further suppose that the firm is a competitor in the labor market. The wage rate is \$12.00 per hour. easy 8. Given the information in Scenario 1, what is the marginal revenue product of labor? moderate 9. Given the information in Scenario 1, how much labor will be hired to maximize profit? easy
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Ch14 - CHAPTER 14 Markets For Factor Inputs MULTIPLE CHOICE...

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