micro test 6

Table 30.2 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?

$1,200 per week

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

$10 per hour

Table 31.1 shows the number of workers a firm is willing to hire per hour at different wage rates. Complete the table by computing the total wage bill (total labor cost) and the marginal wage. Which of the following wages, in Table 31.1, would allow the most workers to be hired?

$10 per hour.

Table 31.1 shows the number of workers a firm is willing to hire per hour at different wage rates. Complete the table by computing the total wage bill (total labor cost) and the marginal wage. Assume the union collects dues of 1 percent of the total wage bill. At what wage in Table 31.1 would the union maximize the amount of dues it collects?

$14 per hour.

If the total wages paid change from $200,000 to $250,000 when the quantity of labor employed increases from five to seven workers, the marginal wage is

$25,000.

If 10 workers will be hired by a firm at a wage rate of $15 per hour, but the 11th worker will be hired only if the wage rate falls to $14 per hour, then the marginal wage of the 11th worker is

$4 per hour.

What are the competitive equilibrium wage and employment level in Figure 31.1?

$5; 16 workers.

Refer to Figure 31.2 for a monopsonist employer. From the monopsonist's standpoint, the optimal wage and employment level would be

$6 per hour and 40 employees.

Refer to Figure 31.2. What is the competitive level of wages and employment?

$7 per hour and 50 workers.

What are the optimal wage and employment level from the perspective of a union in Figure 31.1?

$8; 10 workers.

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

160

Table 30.2 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. In Table 30.2 suppose a hairstylist is paid $700 per week. How many hairstylists should a profit-maximizing salon hire?

2

Table 31.1 shows the number of workers a firm is willing to hire per hour at different wage rates. Complete the table by computing the total wage bill (total labor cost) and the marginal wage. Assume the union collects dues of 1 percent of the total wage bill. How many workers would the union want hired in Table 31.1 if its goal was to maximize the amount of dues collected?

6

In Figure 30.2, a minimum wage of $12 will result in

A shortage of 32 workers.

As marginal physical product diminishes, marginal revenue product

Also diminishes.

A union evaluates job offers based on the

Collective interests of its members.

If the price for a box of kiwis is $40, the wage rate for kiwi laborers is $10 per hour, and a laborer can pick 3 boxes of kiwis per hour, the

Cost efficiency is 3/10 of a box per dollar.

The marginal revenue product of labor curve is the firm's

Demand curve for labor

Marginal physical product diminishes as additional workers are hired because

Each worker has an increasingly smaller amount of other factors with which to work.

Unions must worry about the marginal wage because it indicates the

Effect on the total wage bill of hiring additional workers.

Unionization rates have

Fallen in both the private and public sectors.

In Figure 30.1, the labor supply could shift from S1 to S2 due to all of the following except

Fewer workers preferring to work in this labor market.

Relative to nonunion wages, one reason union wages are

Higher is because unions are more likely in capital-intensive industries where wages tend to be higher.

Typical goals of a labor union in the United States include

Higher wages, better working conditions, and more job security.

Suppose that Silvia's Dance Studio uses both labor and capital to teach dance lessons. Given her current mix of labor and capital, the cost efficiency of labor is 1 dance lesson per dollar, and the cost efficiency of capital is 5 dance lessons per dollar. Silvia should

Hire less labor and use more capital.

The exercise of union power will tend to

Increase the supply of labor available to nonunion industries.

The cost efficiency of labor is equal to the

MPP of labor divided by the wage rate.

In competitive markets, the marginal revenue product curve and marginal physical product curve have similar shapes because

MRP = P Å~ MPP.

The profit-maximizing level of labor, in a union-dominated labor market, occurs where

MRP = marginal factor cost.

The equilibrium wage rate is determined by

Market labor supply and market labor demand.

The elasticity of labor supply measures the

Responsiveness of labor supplied to changes in the wage rate.

Management's power in collective bargaining sessions rests on

The ability to lock out workers by closing stores or factories.

A competitive firm should continue to hire workers until the MRP is equal to

The market wage rate.

If there is an increase in immigration into a specific labor market, then

The supply of labor shifts rightward, and the equilibrium wage will fall.

The market supply of labor is

The total quantity of labor that workers are willing and able to supply at alternative wage rates in a given period.

Table 30.2 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. In Table 30.2, as more stylists are hired,

There are diminishing returns

Ceteris paribus, all of the following result when the minimum wage is raised and is above the equilibrium in a competitive market, except

There are fewer workers available to work.

As long as additional workers are attracted into the labor force by higher wages, the market labor supply curve is

Upward-sloping.

The refusal to work by unionized labor is an example of

a strike

Because a union is a form of monopoly, it must be concerned about the ________ slope of the demand curve for labor.

downward

A firm that attempts to pass along the cost of higher union wages to consumers in the form of higher prices will be more successful if the price elasticity of demand for its product is

inelastic

Democrats argue that labor demand is ________, so ________ jobs will be lost when the minimum wage is raised.

inelastic; few

When management shuts down a plant and does not allow workers to perform their jobs, there is a

lockout

In determining how much labor union workers will offer, the union concerns itself mainly with the

marginal wave curve

The effect of union exclusion of nonunion workers is to

reduce the wages of nonunion workers