Econ Chapter 8 Smart Book

_______ demand is demand for labor inputs to be used indirectly to satisfy consumer demand in the production of final goods and services.

Blank 1: Derived

Rates of pay must increase to compensate for the increasing _________ cost of labor

Blank 1: opportunity

The marginal revenue product measures how much each additional unit of labor adds to _________ revenue

Blank 1: total

______ refers to the fact that demand for labor and other factors of production depends on the demand for final goods and services.

Derived demand

Match the determinants of labor demand and labor supply.

Labor Demand <---> Depends on the number of employers Labor Supply <---> Depends on the number of available workers

Match the determinants of labor demand and labor supply.

Labor Demand <---> depends on the marginal revenue product of labor in each firm and industry Labor Supply <---> depends on each worker's willingness to work at alternative wage rates

Wages can increase without sacrificing jobs if:

MPP rises

______ tends to decline as additional workers are hired.

Marginal physical product

What determines the equilibrium wage rate and level of employment in a competitive labor market?

The intersection of the market labor demand curve and the market labor supply curve

What determines the equilibrium wage rate and level of employment in a labor market?

The intersection of the market labor demand curve and the market labor supply curve

The quantities of labor that employers are willing and able to hire at alternative wage rates in a given time period, ceteris paribus, is the

demand for labor

If the price of a product were to double, marginal revenue product associated with the production of the product will

double

In a labor market, the intersection of labor supply and labor demand determines the prevailing wage rate and also the level of Blank______ as well.

employment

Each firm will hire labor up to the point where the marginal revenue product is

equal to the wage rate.

The intersection of market supply and demand determines the Blank______ in a competitive labor market.

equilibrium wage

The point at which the market labor demand curve and the market labor supply curve intersect determines the Blank______ wage rate and level of labor Blank______ in a labor market.

equilibrium; employed

To get and maintain an above-equilibrium wage, a union must

exclude some workers from the market

Marginal physical product tends to Blank______ as additional workers are hired.

fall

A minimum wage

increases the quantity of labor supplied reduces the quantity of labor demanded

Wages must increase to compensate for the

increasing opportunity cost of labor

Increasing productivity (MPP) can lead to:

increasing wages without sacrificing jobs

The marginal revenue product schedule is also the firm's demand schedule for labor or any production input because:

it shows the quantity of labor that will be hired (demanded) based upon the revenues each additional unit of labor hired produces.

In a Blank______ market the intersection of market demand and market supply determines the equilibrium wage.

labor

Which term refers to the quantities of labor that employers are willing and able to hire at alternative wage rates?

labor demand

The willingness and ability to work specific amounts of time at alternative wage rates in a given time period is called:

labor supply

Through the exclusion of workers, a union is able to

maintain an above-equilibrium wage

A firm will hire workers up to the point at which the wage rate is equal to its:

marginal revenue product

The Blank______ measures the change in total revenue associated with one additional unit of input.

marginal revenue product

The Blank______ schedule is also the firm's demand schedule for labor or any production input because it shows the quantity of labor that will be hired (demanded) based upon the revenues each additional unit of labor hired produces.

marginal revenue product

The total quantity of labor that workers are willing and able to supply at alternative wage rates in a given time period, ceteris paribus, is the

market supply of labor

The Blank______ creates a labor market surplus by reducing the quantity of labor demanded and increasing the quantity of labor supplied

minimum wage

Rates of pay must increase to compensate for the increasing ______ cost of labor.

opportunity

Most universities tend to pay college professors according to their Blank______ — that is, the amount the professors could earn elsewhere.

opportunity wage

The highest wage an individual would earn in the best alternative job is known as the

opportunity wage

A minimum wage Select all that apply

reduces the quantity of labor demanded increases the quantity of labor supplied creates a labor market surplus

The total quantity of labor that workers are willing and able to supply at alternative wage rates in a given time period, ceteris paribus, is the market ______ of labor

supply

The willingness and ability to work specific amounts of time at alternative wage rates in a given time period is called labor _______

supply

If the price of a product were to triple, marginal revenue product associated with the production of the product will

triple

Every firm will hire labor up to the point where the marginal revenue product is equal to the market _______ rate

wage

Every firm will hire labor up to the point where the marginal revenue product is equal to the market _______ rate.

wage

The demand for labor is the quantities of labor that employers are willing and able to hire at alternative _________

wage rates

The demand for labor is the quantities of labor that employers are willing and able to hire at alternative __________

wage rates