Econ 2302 SB 11

surplus of 32 workers.

(Figure 30.2) A minimum wage of $20 will result in a

160.

(Figure 30.2) The number of people employed in the competitive market at a wage of $20.00 per hour is

less than or equal to the MRP.

A firm should hire an additional worker as long as the wage rate is

fewer

According to the income effect, higher wages will induce people to work _____ hours

more

According to the substitution effect, higher wages will induce individuals to work _____ hours.

falls

As marginal physical product (MPP) _______, marginal revenue product (MRP) diminishes.

decreases

As we earn more, the marginal utility of income (increases/decreases).

more

Compared to their regular jobs, workers have ____ flexibility in choosing work hours when it comes to overtime work or secondary jobs.

an above-equilibrium minimum wage

Critics of increasing the minimum wage contend that ______ will simply cause job loss.

marginal utility of income decreases

If Ariana declines to work extra hours because she earns enough and instead wants to spend time with her friends, then Ariana is behaving as if the

decreases

If Carlos declines to work extra hours because he earns enough to pay for all of his expenses and instead wants to spend time with his family, then Carlos is behaving as if the marginal utility of income:

$4 per hour.

If a chair can be sold for $20 and it takes a worker five hours to make a chair, the marginal revenue product of this worker is

9.0 percent increase in the quantity of labor supplied.

If the elasticity of labor is 0.60, a 15 percent increase in the wage rate will induce a

market wage rate

In a perfectly competitive industry, firms will continue to hire until the MRP has declined to the level of the _______.

small; wage rate

In a perfectly competitive labor market, each firm employs such a ______ fraction of the total available supply of a specific type of labor that no firm can influence the ______.

wage

In a perfectly competitive labor market, each firm employs such a small fraction of the total available supply of a specific type of labor that no single firm can influence the _ (output/wage) rate.

increase, decrease

Other things equal, an increase in the demand for a product will (increase/decrease) the demand for labor used in its production, whereas a decrease in product demand will (increase/decrease) the demand for that labor.

marginal revenue product

Perfectly competitive firms will continue to hire until the ______ has declined to the level of the market wage rate.

the value of leisure time increases the marginal utility of income decreases

Select all that apply The upward slope of an individual's labor supply curve is explained by the fact that as hours worked increase ______.

1000

Suppose a firm has 10 employees and its revenue increases by $1,000 when it hires its 11th employee. What is the marginal revenue product for this 11th worker?

$100

Suppose a firm has 4 employees and its revenue increases by $100 when it hires its fifth employee. What is the marginal revenue product for this fifth worker?

marginal

The _ physical product is the additional output that results from using one additional unit of input.

marginal revenue product

The ______ is the change in total revenue associated with one additional unit of input.

elasticity

The ______ of labor supply is the sensitivity of labor quantity to changes in wage rate.

upward

The _______ slope of an individual's labor supply curve is explained by the fact that as hours worked increase, the value of leisure time increases and the marginal utility of income decreases.

opportunity cost of work

The amount of leisure time that is given up in order to work is commonly thought of as the _____.

mrp

The change in total output that is produced as a result of adding one more unit of labor or variable input is called ______.

rigid

The choices most workers have regarding the hours they will work are relatively ______

very much like

The demand curve for labor looks _____ the demand for any good or service.

diminishing returns to labor.

The demand for labor is downward-sloping because of

labor

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

the product is selling poorly

The derived demand for resources by producers for a product will be low when ______.

total

The marginal revenue product measures how much each additional unit of labor adds to (total/average/marginal) revenue.

sum of all individual labor supply decisions

The market supply of labor is the ______.

price

The quantity demanded of labor, or for any other resource, depends on its

0

The table shows how many hairstyling appointments a hair salon can schedule per week based on the number of stylists. In the spaces provided, compute the marginal physical product (MPP) of the hair stylists, total revenue, and marginal revenue product of the stylists, assuming that a hair stylist charges $60 per appointment. What is the marginal physical product of the fourth hairstylist?

$1,200 per week

The table shows how many hairstyling appointments a hair salon can schedule per week based on the number of stylists. In the spaces provided, compute the marginal physical product (MPP) of the hair stylists, total revenue, and marginal revenue product of the stylists, assuming that a hair stylist charges $60 per appointment. What is the marginal revenue product of the second hairstylist?

market

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____ supply of labor.

demand for labor

The ultimate determinant of the number of people actually working is the

supply

The willingness and ability to work specific amounts of time at alternative wage rates in a given time period is called labor (demand/supply).

labor supply

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

true

True or false: The demand for labor is determined by the firm's expected sales and output.

true

True or false: When a product is in high demand with customers based on its value (quality) or price, the demand for the resources to produce that product will be very high.

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

What determines the equilibrium wage rate in a perfectly competitive labor market?

income effect

When an increased wage rate allows a person to reduce hours working without losing income, this is called

the income effect of higher wages.

When an increased wage rate allows a person to reduce hours working without losing income, this is called

the substitution effect of higher wages

When an increased wage rate causes people to substitute labor for leisure, this is called Blank______.

substitute

When an increased wage rate causes people to substitute labor for leisure, this is called the ___ effect of higher wages.

the income effect of higher wages.

When an increased wage rate causes people to substitute leisure for labor, this is called

the elasticity of labor supply

When economics measures the sensitivity of labor quantity to changes in wages, this is called:

rises

When productivity rises, the quantity of labor demanded ______.

falls

When wages rise, the quantity of labor demanded ______.

The creation of new and better jobs has widened the availability of good alternatives to leisure time.

Which of the following is not a reason for the long-run leftward shift in the U.S. labor supply curve?

The quantity of labor demanded falls. A market surplus is created. The quantity of labor supplied increases.

Which the following are effects of a minimum wage that is above the market equilibrium wage? Select all that apply.

ling

bi