module 11 homework
Which of the following is true?
-Using improved technological processes would cause fewer workers to be employed. -Using improved technological processes would cause more workers to be employed. -Using improved technological processes would not change the number of workers employed. All of these answers are possible.
The labor demand curve will shift leftward when:
a labor-saving technology is introduced.
If the labor demand is unchanged, an increase in the labor supply will __________ the equilibrium wage and __________ the number of workers employed.
decrease, increase
For Hewlett-Packard (HP), the demand for software engineers is ______ from the production of HP laptops.
derived
When the firm's VMPL is plotted in a diagram with the quantity of labor measured along the horizontal axis, the resulting curve will be ______ and constitutes the firm's ______.
downward sloping, demand curve for labor
What is the name given to the accumulated training and skills that workers possess?
human capital
When it comes to determining the appropriate quantity of physical capital to use, the firm employs a decision rule that is conceptually ______ the approach it takes in choosing the number of workers to hire.
identical to
The increase in wage inequality over the past five decades is best explained by:
skill-biased technological change.
Two major theories for why employers might discriminate are ____________.
taste-based discrimination and statistical discrimination.
Which of these factors will not cause the demand curve for labor to shift?
A change in the wage
When an employer pays a higher wage to compensate workers for unpleasant aspects of their jobs, which of the following is the employer offering?
A compensating differential
What is a labor-complementing technological change?
A labor-complementing technological change causes additional technology to require additional labor, increasing MPL.
What is a labor-saving technological change?
A labor-saving technological change causes additional technology to substitute for existing labor, decreasing MPL.
Which of the following statements regarding equilibrium is not true? (Check all that apply.) A. The firm uses marginal analysis in order to optimize. B. The production schedule is of no use to a firm in arriving at profit maximizing decisions. C. In equilibrium, the dollar value of additional output is equalized with the market or rental price of a factor of production. D. The decision regarding the optimal level of output is independent of MPL and MPK.
B. The production schedule is of no use to a firm in arriving at profit maximizing decisions. D. The decision regarding the optimal level of output is independent of MPL and MPK.
All of the following statements are true of a labor supply curve except:
It is downsloping due to the income effect.
All of the following are true of the demand for labor except:
It is not affected by the retail price.
Why do economists say labor is a derived demand?
Labor demand is derived from the demand for the goods and services workers produce.
At the equilibrium, the price of capital is equal to the:
Marginal revenue product of capital.
Which of the following formulas is correct?
Marginal revenue product of labor = product price x marginal product of labor
Star Solutions Ltd is a business consultancy firm that uses custom software made by the company for each of its 3 clients and the off-shelf software for its remaining 3 clients. The firm has a workforce of 50 employees with similar annual salaries of which 25 employees work on the custom software and the remaining employees work on the off-shelf software. The firm faces similar costs for implementing the two types of software and it incurred a one-time similar cost for training the employees for either software. If the firm plans to expand its business and hire a larger workforce, which of the following strategies should it prefer?
The firm should only expand the workforce for the custom software and train them.
Human capital is the __________.
-experience that people derive from spending more time on a job. -skills and knowledge that people obtain by furthering their schooling.
Which of the following is not an important determinant of wage inequality within an economy?
Differences in connections to influential people.
VMPK equals _________.
MPK x P.
Let MRP equal the marginal revenue product of labor and W equal the wage rate. When should a firm hire more workers to increase profit?
When MRP > W
In the United States in 2011, there were 104 fatalities per 100,000 workers in the logging industry. This is the second-highest rate after the fisheries industry. Although the fatality rate in this industry is so high, many workers still choose to work as loggers. What could explain this?
Workers choose these high-risk jobs because they are willing to bear an occupational risk to earn a higher wage.
A change in which of these factors would cause a movement along the supply curve for labor rather than a shift of the labor supply curve?
a change in the wage
The substitution effect implies there is _____ relationship between the wage rate and the quantity of labor supplied. While the income effect implies there is a ______ relationship between wage rate and the quantity of labor supplied.
a positive, an inverse
The factors of production include land, labor and:
capital
The value of marginal product of capital (VMPK) is the ____________.
contribution that each additional unit of physical capital adds to a firm's revenues, all else equal.
All of the following are reasons for compensating wage differentials except:
educational levels.
The figure on the right shows the market for labor in a given industry. The demand curve is downward-sloping because marginal productivity _____ as more workers are employed, while the supply curve is upward-sloping since an increase in the wage increases the opportunity cost of ______.
falls, leisure
In this case, the school's administrators will seek to hire _____ economics instructors.
fewer
An argument in favor of employers paying for the job training of an employee is:
job training can improve a worker's job-specific skill set.
Sam and Jacob are two friends who graduated from high school as part of the class of 2015. Now one year later, Sam works as a cashier at a hardware store and Jacob works at a glass manufacturing factory with more dangerous conditions. Therefore, we can conclude that Sam would earn _____ Jacob because of the ______
less than, compensating wage differentials.
Because this firm is competitive and has no control over its product's price, the declining values for VMPL are a result of diminishing ______
marginal productivity
Which of the following is not a factor of production?
money
Which of the following is likely to cause a rise in the wage rate and decrease in the number of workers employed at a grocery store?
opening of a nearby store that pays higher wages
What is an example of a compensating differential?
overtime pay shift premium hazard pay
Compensating wages are the wage premiums ___________.
paid to attract workers to occupations to otherwise undesirable jobs.
An increase in human capital causes the demand for labor curve to:
shift to the right
As technology improves, the demand for labor curve:
shifts to the right
As the population increases, the labor supply curve:
shifts to the right
As the price of the final product increases, the demand for labor curve:
shifts to the right
If an employer's discrimination signals that he is willing to forego profits, then he is engaging in _______ discrimination.
taste-based
Suppose an employer avoids hiring youthful workers because she objects to their typically liberal lifestyle choices. In this case, the employer is practicing ______ discrimination.
taste-based
Derived demand is the demand a firm has for ____________.
the factors of production that enable it to produce output that is sold in product markets.
John will continue to consume leisure up to the point at which _______
the marginal benefit of leisure is equal to the marginal cost.
If the value of the marginal product of labor is equal to the wage, then:
the marginal cost is less than or equal to the wage.
Which of the following is the equivalent of the demand curve for labor?
the marginal product curve
In equilibrium, an optimal mix of production factors is achieved when:
the marginal product from the last dollar spent on each input is equalized.
The fast food restaurant on Main Street just laid off several workers, replacing them with self-order computer kiosks. This would imply:
the marginal product of capital per dollar spent on capital was greater than the marginal product of labor per dollar spent on labor.
According to the Law of Diminishing Returns, ____________.
the marginal productivity of an additional unit of labor eventually decreases as the quantity of labor increases.
A production function shows ____________.
the number of workers employed and the corresponding output levels that will be produced.
When it comes to determining the appropriate quantity of physical capital to use, the firm employs a decision rule that is conceptually identical to the approach it takes in choosing the number of workers to hire. A firm will employ physical capital until ____________.
the value of marginal product of capital (VMPK) equals the rental price of capital
Which of the following statements is not correct? A. An increase in the price of a product increases demand for labor. B. Equilibrium is obtained at the intersection of the demand and supply curves. C. The work preference of labor affects the supply curve. D. At all times an increase in wage increases labor supply.
d. At all times an increase in wage increases labor supply.
As the number of workers increases, the marginal product of labor __________ and the marginal revenue product of labor __________.
decreases, decreases
When the VMPL is plotted in a diagram with the number of workers measured along the horizontal axis, the resulting curve (connecting the plotted points) is the firm's _______
demand for labor
As the wage increases, the demand for labor curve:
does not shift, but the quantity demanded for labor decreases
The demand for labor curve will shift to the right if:
technology improves productivity
The value of marginal product of labor (VMPL) is ____________.
the contribution of an additional worker to a firm's revenues. and given by the marginal product of labor times the price of the firm's output.
A profit-maximizing firm will hire workers until the ______equals ______. To hire beyond that would mean the firm would be paying the worker ______ than the worker's contribution to the firm.
value of the marginal product of labor (VMPL), wage, more