Resources

____ ability involves assuming risk and organizing resources into a productive process rather than using resources in production.

Entrepreneurial

What will happen to equilibrium wage rate and the employment level in the labor market for nurses if there is an increase in the productivity of nurses?

Equilibrium wage rate and equilibrium employment level both rise.

Suppose that you are trying to decide whether to stay in your current job in your hometown or to move and take a new job in Denver, CO. Your current job pays $60,000 per year, and the new job in Denver pays $75,000. The average apartment rent in your hometown is $1235, and the average apartment rent in Denver is $2261. In which city is the real wage in terms of apartment rent higher?

Hometown

What will happen to the marginal revenue product (MRP), equilibrium wage rate, and employment level in the labor market for fishermen if there is a decrease in the price of fish?

MRP decreases, equilibrium wage rate decreases, and equilibrium employment level decreases.

Which of the following accounts for purchasing power of wages?

Real wage

Nominal Wage

The actual number of dollars received in exchange for one's labor.

If the employee's wage is tied at all to his or her productivity,:

a higher marginal revenue product should result in a higher wage for that employee.

If the wage rate is constant, the marginal resource cost associated with hiring one additional worker is:

a horizontal line at the wage.

A decrease in resource demand is:

a shift to the left of the quantity demanded of the resource at every price.

Derived demand refers to:

a type of demand that is specific to resources.

The marginal product is the:

additional output produced as a result of utilizing one more unit of a variable resource.

A firm will purchase a resource if the ____ associated with the purchase is greater than or equal to its cost.

benefit

A firm will purchase a resource if the benefit associated with the purchase is greater than or equal to its ____

cost

The additional cost incurred as a result of utilizing one more unit of a variable resource is called the marginal resource:

cost.

Suppose firms can prepare tax returns using labor or computerized programs. If the price of labor increases, the quantity of labor demanded will ____ and the demand for computerized programs will ____

decrease; increase

The optimal level of resource utilization ____ when the marginal resource cost increases.

decreases

The optimal level of resource utilization increases when the marginal resource cost ____

decreases

The marginal revenue product curve also represents the resource ____ curve.

demand

If consumers develop a taste for sushi, there will be a(n) ____ demand for sushi chefs.

derived

If consumers develop a taste for sushi, there will be a:

derived demand for sushi chefs.

The demand for labor is:

derived from its marginal revenue product.

If employees pay partially for higher resource costs, the marginal resource cost curve:

does not shift.

The marginal resource cost curve for the firm will not shift if:

employees fully pay for higher resource costs.

The marginal resource cost curve for the firm will shift if:

employers pay for part of or all higher resource costs.

The optimal level of resource utilization for a firm occurs where the marginal revenue product ____ the marginal resource cost.

equals

The more productive an employee is, all else held constant, the:

higher that employee's marginal revenue product will be.

In the circular flow model, ____ and ____ interact in the resource market and the product market.

households; firms

When discussing employment or demand and supply of labor in the labor market, ____ supply labor and ____ demand labor.

households; firms

An increase in product price ____ the demand for labor, resulting in ____ wages and employment.

increases; higher

All physical and mental activity devoted to producing goods and services is classified as the resource ____

labor

The payment name for ____ is wages.

labor

All natural resources used in production are classified as the resource ____

land

If a firm in a noncompetitive market wants to sell more units, it must ____ the price for every unit it sells.

lower

A firm tends to emphasize ____ revenue product when deciding how many workers to employ.

marginal

The ____ revenue product represents the additional revenue generated from using an additional unit of a resource.

marginal

The additional cost incurred as a result of utilizing one more unit of a variable resource is called the ____ resource cost,

marginal

The additional cost incurred as a result of utilizing one more unit of a variable resource is called the ____ resource cost.

marginal

The additional output produced as a result of utilizing one more unit of a variable resource is the ____ product.

marginal

The additional output produced as a result of utilizing one more unit of a variable resource is the:

marginal product.

The change in total product associated with hiring an additional worker is called:

marginal product.

The additional cost incurred as a result of utilizing one more unit of a variable resource is called the

marginal resource cost

The cost of an additional unit of a resource, such as labor, is called the:

marginal resource cost.

A firm tends to emphasize ____ when deciding how many workers to employ

marginal revenue product

The resource demand curve is represented by the:

marginal revenue product curve.

The optimal level of resource utilization occurs where the:

marginal revenue product equals the marginal resource cost.

When the price of software decreases, all else equal, firms will purchase ____ software and hire ____ programmers.

more; more

The actual number of dollars received for one's labor is called:

nominal wage.

Purchasing ____ is the value of a monetary amount expressed in terms of the goods and services it can buy.

power

If a firm in a noncompetitive market wants to sell more units, it must lower the ____ for every unit it sells.

price

The real wage is the wage adjusted for

prices, inflation, or price

The marginal revenue ____ represents the additional revenue generated from using an additional unit of a resource.

product

The total amount of output produced with a given amount of resources is known as the total ____

product

The wage rate that a person earns is a function of two variables:

productivity and price.

The payment name for entrepreneurial ability is

profit/loss

The ____ wage is the quantity of goods and services that can be bought with the purchasing power of one's ____ wage.

real; nominal

The ____ wage, not the ____ wage, should be considered when determining where to work or which job to take.

real; nominal

The circular-flow model shows how households and firms interact in two key markets: the ____ market and the ____ market

resource; product

When marginal revenue product equals marginal revenue cost:

resources have been used optimally.

The marginal ____ product represents the additional revenue generated from using an additional unit of a resource.

revenue

In the market for labor, households are on the ____ side, and firms are on the ____ side,

supply; demand

Nominal wage is:

the actual number of dollars received for one's labor.

A production decision at the margin includes:

the decision to increase output.

For firms operating in perfectly competitive markets, if the price of a product is constant, the marginal revenue product is equal to:

the marginal product times the price.

Suppose that market conditions change in an area and, as a result, a firm faces a decrease in the cost of each additional worker it hires, In this case,

the marginal revenue cost curve shifts downward.

Suppose that market conditions change in an area and, as a result, a firm faces an increase in the cost of each additional worker it hires. In this case,

the marginal revenue cost curve shifts upward.

Purchasing power is:

the value of a monetary amount expressed in terms of the goods and services it can buy.

The ____ rate that a person earns is a function of two variables: productivity and price.

wage

An increase in product price raises the demand for labor, resulting in higher ____ and ____

wages; employment

When firms want to produce additional output, they make decisions:

•A firm decides to hire an additional worker. •A firm decides to produce additional output.

The market wage rate for each worker is $15 per hour. What is the total labor cost of 4 workers?

$60

You recently graduated from college and accepted a job in San Francisco that pays $55,000. The average price of a gallon of gasoline in Francisco is $2.53. What is your real wage in terms of gallons of gasoline?

21739.13

Change (Shift) in Resource Demand

A change in the quantity of a resource demanded at every resource price. Graphically, an increase in resource demand is represented by a rightward shift of the resource demand curve, while a decrease in resource demand is represented by a leftward shift of the resource demand curve.

Derived Demand

A type of demand specific to resources that occurs as a result of the demand for the goods and services produced by those resources. Ex: If people develop a taste for sushi (product), there will be a derived demand for sushi chefs (resource).

Marginal Resource Cost (MRC)

The additional cost incurred as a result of utilizing one more unit of a variable resource (i.e., labor or capital). Marginal Resource Cost (MRC) = Change in Total Resource Cost / Change in Resource Quantity

Marginal Product (MP)

The additional output produced as a result of utilizing one more unit of a variable resource (.e., labor or capital). Marginal Product (MP) = Change in Total Product (TP) / Change in Variable Resource

Marginal Product (MP)

The additional output produced as a result of utilizing one more unit of a variable resource (i.e., labor or capital). Marginal Product (MP) = Change in Total Product (TP) / Change in Variable Resource

Marginal Product of Labor (MPL)

The additional output produced with another unit of labor.

Marginal Revenue Product (MRP)

The additional revenue generated as a result of utilizing one more unit of a variable resource (e.g., labor or capital). Marginal Revenue Product (Competitive Output Markets) Marginal Revenue Product (MRP) = Marginal Product × Price

Marginal Revenue Product (MRP)

The additional revenue generated as a result of utilizing one more unit of a variable resource (i.e., labor or capital). Marginal Revenue Product (MRP) = Change in Total Revenue / Change in Resource Quantity

Marginal Revenue Product (MRP)

The additional revenue generated as a result of utilizing one more unit of a variable resource (l.e., labor or capital) Marginal Revenue Product (MRP)= Change in Total Revenue / Change in Resource Quantity

Real Wage

The quantity of goods and services that can be bought with (the purchasing power of) one's nominal wage. Real Wage = Nominal Wage / Price of Output

Total Product (TP)

The total amount of output produced with a given amount of resources. Total Product (TP) = Total Output

Purchasing Power

The value of a monetary amount expressed in terms of the goods and services it can buy.

In the case of a higher wage, there will be:

a decrease in the quantity of labor demanded.

If the price of a resource increases, there is:

a decrease in the quantity of the resource demanded.

The marginal revenue product associated with hiring one additional worker is:

a downward-sloping line.