Econ test 4

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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


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