Econ 6

(Table 69-3: Employment and Output) In the table, if the price of a bushel of wheat is $10, then the value of the marginal product of the third worker is:

$150

(Table 69-4: Value of the Marginal Product of Labor and Demand) If the product price is $2 per unit, the value of the marginal product for the fifth unit of labor is:

$40

(Table 69-1:Total product Labor at Debbies Bakery) Debbie owns a bakery and can hire workers to produce cakes selling in a competitive output market at $10 each. The table shows the relationship between the number of cakes produced. What is the value of the marginal product for the fourth worker?

$50

(Figure 69-1: The value of the Marginal Product Curve) In the figure, the VMPL curve will shift to the right if:

A technological advance makes labor more productive.

The largest component of the factor distribution of income in the United States is

Compensation of employees

Tanya is an independent truck driver who delivers cargo all around the country. For Tanyas she and her truck are:

Complementary inputs in the production process

Benny employs people to sell candy bars at intersections. The marginal product of the last worker Benny hired is 20 candy bars per hour. Benny pays $7 per worker per hour and sells candy bars for $1 each. If the price of candy bars rises to $2, then the:

Demand for labor increases.

Max employs both labor and capital to produce his trinkets. Currently the last unit of labor employed has a marginal product of 100 units. The last unit of capital employed has a marginal product of 40 units. The price of labor is $25 per unit and the price of capital $10 per unit. Max should:

Do nothing; he is hiring the optimal quantity of labor and capital.

The marginal productivity theory of income distribution is that:

Each factor is paid the value of the output generated by the last unit employed in the factor market as a whole

Which of the following is not a factor of production at a college

Electricity

(Figure 69-2: Demand for Bricklayers in a perfectly Competitive Labor Market) Assume that the market wage rate for Bricklayers is $100. For a profit-maximizing firm at the equilibrium level of output, the VMPL bricklayers is:

Equal to the market wage rate.

(Table 69-1:Total product Labor at Debbies Bakery) Debbie owns a bakery and can hire workers to produce cakes selling in a competitive output market at $10 each. The table shows the relationship between the number of cakes produced. If Debbie must pay each worker a competitive market wage of $40 per day, how many workers will she hire to maximize profit?

Five

The wage rate is $20 per hour and the last worker hired by the firm increased output by 100 units. Computers rent for $50 per hour and the last computer rented by the firm increased output by 200 units. If the firm is producing the desired level of output, what should the firm do to minimize costs?

Hire more workers and reduce the number of computers rented because the marginal product per dollar spend is higher for workers.

(Table 69-2: Workers and Corn Output) Laura is a price-taking farmer who produces corn. Assume the wage rate for workers is $125 and the price per unit of corn is $10. The table shows Laura's production function. Suppose Laura is currently employing seven workers. If she lets the seventh worker go and reduces employment to six workers, her profits will:

Increase by $105

(Table 69-2: Workers and Corn Output) Laura is a price-taking farmer who produces corn. Assume the wage rate for workers is $130 and the price per unit of corn is $10. The table shows Laura's production function. Suppose Laura is currently employing two workers. If she adds the third worker, he profits will:

Increase by $80

Human Capital

Is the improvement in labor created by education and knowledge that is embodied in the workplace.

Mary is considering hiring another worker in an assembly line for stereo speakers. Mary knows the average product of labor is 15 speakers per day. She also believes that the next worker hired will produce an extra 12 speakers per day. A speaker sells for $10 each Mary should hire another worker.

Only if the new worker's daily wage is $120 or less.

If the _____ of labor is increased ceteris paribus, eventually the _____ will _____.

Quantity; marginal product of labor; fall

(Figure 69-1: The value of the Marginal Product Curve) In the figure, if the market wage rate increases:

The profit-maximizing quantity of labor will decrease.

If the extra output that is produced by hiring one more unit of labor adds more to _____ than to _____. The firm will increase its profit by increasing the use of labor.

Total revenue; total cost

For a perfectly competitive employer, the value of the marginal product curve is the firm's labor_____ curve. This means the marginal product curve has a _____ slope.

demand; negative

Factor demand is said to be derived demand because it

depends on product demand

The demand for a factor of production is a

derived demand

In the factor market for land, one will find equilibrium rental prices will be_____ the value of marginal product of land will be

equal to

The value of the marginal product is equal to:

marginal product times the price per unit of output.