Micro Chapters 12 & 13

Which of the following most clearly illustrates the concept of derived demand?

An increase in the demand for new houses leads to an increase in the demand for construction workers

Which of the following is one way to invest in human capital?

Increasing your education

Which of the following best describes the marginal revenue product of a resource?

It equals the extra output produced by an additional unit of the resource multiplied by the marginal revenue per unit of that output

Everything else equal, when are wages likely to be higher?

When more skill is required to perform well on the job

Which of the following is the best example of an investment in human capital?

a summer internship at a law firm for someone going to law school

The marginal revenue product of a resource is best described as the

change in total revenue resulting from employing an additional unit of the resource

Assume that skilled labor costs twice as much as unskilled labor, a profit-maximizing firm will

hire until the marginal product of unskilled labor is one-half that of skilled labor

Which of the following is the best definition of "physical capital"?

man-made resources used to produce other goods

Which of the following is the best definition of physical capital?

man-made resources used to produce other goods

The change in the total revenue of a firm that results from employing one additional unit of a factor of production is defined as the

marginal revenue product of the resource

Working conditions, prestige, variety, location, employee freedom, and employee responsibilities are all examples of

non-pecuniary job characteristics

Which of the following is the best example of an investment in human capital?

on-the-job training received by an apprentice electrician

An increase in the price of a resource would cause

producers to substitute other inputs for the resource

An individual who possesses a specialized skill that is difficult to execute will

receive a high wage only when this skill is in great demand relative to its supply

When a firm decides to hire more workers because local wage rates have decreased, this is an example of

substitution in production

When the price of a resource goes up and firms seek other suitable resources, this is called the

substitution in production effect

Which of the following is the most accurate definition of a worker's "marginal revenue product"?

the change in the firm's total revenue as the result of hiring an additional worker

A profit-maximizing restaurant owner will hire more buspersons to keep more tables clean and quickly available to new customers, as long as

the marginal revenue product of buspersons exceeds their wage rate