Exam 4 - When VMP = MRP, there is Correct Answer: Correct...

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Unformatted text preview: When VMP = MRP, there is Correct Answer: Correct perfect competition in the product market. The addition to revenue that a firm receives from adding an additional unit of labor is the Correct Answer: Correct marginal revenue product of labor. A monopsony consists of Correct Answer: Correct a single purchaser. When workers receive a lower wage than they would receive in a competitive market because there is only one employer, they are experiencing Correct Answer: Correct monopsonistic exploitation. The marginal productivity theory holds Correct Answer: Correct that more productive resources will be paid more in a market system. The effect of monopsony is to Correct Answer: Correct restrict inputs. Which of the following is false? Correct Answer: Correct An increase in the demand for the product labor produces will decrease the demand for labor. Perfect competition in the product and resource markets means that a firm Correct Answer: Correct must take the price of inputs and its product as given. The demand for labor is downward sloping for a perfectly competitive firm because of Correct Answer: Correct declining marginal product of labor. After hiring 151 units of the variable input labor, a firm determines that MRC = 27 cents and MRP = 23 cents. The firm should Correct Answer: Correct decrease the use of labor. To attract more workers, a monopsony must Correct Answer: Correct pay all workers a higher wage. If a firm is a monopolist and a perfect competitor in the resource market, then Correct Answer: Correct the firm will restrict output, and therefore employ fewer workers than a competitive industry would. When you decided to attend college, you engaged in Correct Answer: Correct human capital investment. Derived demand is a demand for Correct Answer: Correct productive resources. The elasticity of demand for labor will be lower Correct Answer: Correct all of the above If a firm is small relative to the labor market in which it operates, it will face a labor supply curve that Correct Answer: Correct is perfectly elastic. The extra cost to a firm of employing another unit of an input is the Correct Answer: Correct marginal resource cost. Suppose that the marginal product of labor falls from 21 units of output to zero as the amount of labor employed increases by 1. Which of the following is true? Correct Answer: Correct Total product cannot be increased by employing additional workers. The demand for labor is a function of all but which one of the following? Correct Answer: Correct the number of workers available People invest in human capital because Correct Answer: Correct they hope to generate a higher income in the future. When the demand for an input depends on the demand for the good that uses that input in production, it is referred to as Correct Answer: Correct derived demand....
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This note was uploaded on 01/13/2012 for the course ECON 2306 taught by Professor Kamara during the Spring '11 term at University of Texas.

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Exam 4 - When VMP = MRP, there is Correct Answer: Correct...

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