Econ 351 ch 14

14.1 Competitive Factor Markets 1) A firm should hire more labor when the marginal revenue product of labor A) equals the wage rate. B) exceeds the wage rate. C) is less than the wage rate. D) Any of these can be true. E) None of these are true.

Answer: B

3) The marginal revenue product can be expressed as the A) additional revenue received from selling one more unit of product. B) increment to revenue received from one additional unit of input hired. C) marginal physical product of an input times the average revenue received from the sale of the product. D) average physical product of the input times the marginal revenue received from the sale of the final product.

Answer: B

2) The marginal revenue product of labor is equal to A) MPL P. B) MPL / P. C) MPL MR. D) MPL / MR E) MR / MPL

Answer: C