ECON 3rd EXAm
A firm will find it profitable to hire workers up to the point at which their
marginal resource cost is equal to their MRP
When economists say that the demand for labor is derived demand they mean that it is
related to the demand for the product or service labor is producing
a firm will employ more of an input whose relative price has fallen and conversely will use less of an input whose relative price has risen. Thus a fall in the price of capital will increase the relative price of labor and thereby reduce the demand for labor. what kind of effect is this?
substitution effect
marginal product is
the amount an additional worker adds to the firm's total output.
Marginal resource cost is
the increase in total resource cost associated with the hire of one more unit of the resource.
conglomerate merger
the joining of firms in completely unrelated industries
vertical merger
two or more firms involved in different stages of producing the same good or service (car and tire manufacturer)
the long run trend of real wages has been
upward
If an exclusive union is successful in restricting the supply of labor, the:
wage rate will rise
Harry owns a barber shop and charges $6 per haircut. By hiring one barber at $10 per hour, the shop can provide 24 haircuts per 8-hour day. By hiring a second barber at the same wage rate, the shop can now provide a total of 42 haircuts per day. The MP of the second barber is and harry should:
18 and hire the 2nd worker because he will add 28$ in profit
If one worker can pick $30 worth of grapes and two workers together can pick $50 worth of grapes, the marginal revenue product of the 2nd worker is
20
Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is:
36
on january 1,2010 alex deposited 5,000$ into a savings account that pays interest of 5 percent, compounded annually. If he makes no further deposits or withdrawals, how much will Alex have in his account on December 31, 2012 (3 years later)
5,788
interest is the
price paid for the use of money
craft unions
Attempted to organize skilled workers in a particular field
Employers will hire more units of a resource if the:
productivity of the resource increases
which of the following amended that claytons act prohibition against mergers that substantially lessen competition
Celler-Kefauver Act of 1950
The sherman act was designed to
Make monopolies that restrict trade illegal.
Which of the following occupations is among the ten projected most rapidly declining U.S. occupations in terms of percentage increases?
Postal service workers
A competitive employer should hire additional labor as long as:
The MRP exceeds the wage rate
Marginal revenue product measures the
amount by which the extra production of one more worker increases a firm's total revenue.
If two resources are highly substitutable for one another:
an increase in the price of one will increase the demand for the other
Compensating differences in wages
are wage differences that compensate for differences in the desirability of jobs.
Noncompeting groups of workers are the result of:
differences in the innate and acquired abilities of workers
A profit maximizing firm will
expand employment if marginal revenue product exceeds marginal resource cost.
The supply curve of loanable funds is upsloping because:
households are willing to save more at high interest rates than they are at low interest rates
a function of the federal trade commission is to
investigate instances of faulty and misleading advertising.
A craft union attempts to increase wage rates by shifting the labor supply curve to the
left
The economic term for a firm that is the sole buyer in a market is
monopsonist
occupational licensing
often restricts occupational entry and raises the incomes of license holders.
The clayton act of 1914
outlawed price discrimination
A change in an input price will alter both production costs and the profit-maximizing output. Thus a decline in the price of capital will reduce production costs, increase the profit-maximizing output, and thereby increase the demand for labor. This describes the:
output effect
The total supply of land is:
perfectly inelastic
Critics of the minimum wage argue that as an antipoverty device, it is "poorly targeted." By this they mean that...
the minimum wage only applies to a small percentage of the labor force
Economic or pure rent is:
the price paid for the use of land and other nonreproducible resources.
The equilibrium interest rate equates
the quantities demanded and supplied of loanable funds
The main purpose of the antitrust laws is
to regulate natural monopolies