Econ test 4
Which of the following will not lead to a change in the demand for labor?
A change in the supply of labor
Which of the following statements is true?
A firm can increase quantity demanded for labor when the wage rate falls without affecting the product price but the industry cannot hire more workers without causing the product price to fall
Which of the following will cause a shift in the demand curve of labor?
All of these
Which of the following would cause the demand curve to shift to the right?
An increase in labor productivity
When MFC = MRP, a firm in a competitive market will
stop hiring
A firm will not hire additional workers once
the additional cost of a worker equals the additional revenue from the worker
As more workers are hired, the marginal physical product of labor eventually declines because
the amount of capital each worker has to work with declines as the number of workers increases
The marginal revenue product is
the change in total revenue resulting from one-unit change in variable input
The greater the elasticity of demand for a final product, we find_____ the demand for the factor inputs
the greater will be
The equilibrium wage rate in an industry is determined by
the intersection of the market demand curve for labor and the market supply curve for labor
A profit-maximizing firm in a competitive market will continue to hire more workers when
the marginal factor cost is less than the marginal revenue product of the additional workers
Which of the following statements is true about the market and individual firm's supply curve
the market supply curve is more inelastic than the firm's supply curve
The price elasticity of demand for labor equals
the percentage change in the quantity demanded of labor divided by the percentage change in the price of labor
We would expect unions to have a more difficult time negotiating higher wages for their members when
the product produced has several close substitutes
If the marginal productivity of labor decreases, then
the quantity of labor demanded at every possible wage rate will be less
The price elasticity of demand for a variable input will be more elastic in all the following cases EXCEPT
the shorter the time period being considered
All of the following will make the demand for labor more elastic except
the smaller the proportion of total costs accounted for by labor
The marginal revenue product represents
the worker's contribution to the firm's total revenues
We would expect that a fall in labor supply will have a proportionately smaller effect on the market wage rate when
workers can easily be replaced by capital goods
The supply of labor to an industry will decrease when
workers receive better employment opportunities in other industries
Which of the following would NOT shift an industry's supply of labor curve?
The wage rate in the particular industry falls
When hiring additional workers, a firm operating in a perfectly competitive labor market will
be able to hire additional workers without offering higher wages
The individual firm operating in a perfectly competitive labor market
can buy all the labor it wants at the going market wage rate
The marginal physical product of labor is the
change in output generated by a unit change in labor
We assume that when a firm hires additional workers, the marginal physical product of labor will
decrease because each worker now has less capital and other resources to work with
The demand for labor is
derived from the demand for the final product being produced
In a perfectly competitive labor market, the industry demand curve is ______ and the industry supply curve is ________.
downward sloping, upward sloping
All of the following affect the demand elasticity for labor except
final product income elasticity
The wage rate found by the intersection of the market demand and supply curves for labor then determines the
firm's supply curve for labor
If the price of labor increases, the typical perfectly competitive firm in the short run will
hire less labor
Holding other things constant, an increase in the use of capital in production would
increase the marginal productivity of labor
The demand for an input will be more inelastic when
it is difficult to substitute other inputs for this input
The supply of labor to the individual firm in a perfectly competitive market is
perfectly elastic at the current market clearing wage rate
When the price of a product decreases, the marginal revenue product curve in a perfectly competitive market
shifts to the left
When the price of a product increases, the marginal revenue product curve in a perfectly competitive market
shifts to the right
The price elasticity of demand for labor will be smaller, the
smaller is the proportion of wage costs in the total cost of production
Which of the following statements about perfectly competitive markets are true?
Both I and II
If a firm is a perfectly competitive purchaser of factor inputs and the wage rate is $5, the marginal factor cost for labor is
$5
What has been the impact of the widespread adoption of ATMs on the demand for bank tellers?
The demand for bank tellers has become more elastic
Suppose the market for pizza makers is initially in equilibrium, but then the equilibrium wage rate and the equilibrium quantity of labor both increased. What happened in the market for pizza makers?
The demand for pizza makers increased
In a perfectly competitive industry, an individual firm faces
a perfectly elastic labor supply curve
A fall in the price of the final product produced by a firm will cause
a reduction in demand for an input used to produce the final product
A firm purchases more capital equipment. We would expect to observe
an increase in the demand for labor by this firm
A firm's marginal revenue product of labor curve is also
its labor demand curve
When MFC > MRP, a firm in a competitive market will
layoff workers
A short-run increase in the price of a firm's output will typically
lead to more employment in the competitive firm
The elasticity of demand for labor will be less the
less the demand elasticity for the final product
The additional cost associated with the hiring of one more unit of labor is known as the
marginal factor cost of labor
Marginal revenue product is
marginal physical product multiplied by marginal revenue
