unit 4 multiple choice review
if an increase in the amount of capital employed by a firm leads to an increase in the marginal product of labor, labor and capital are considered
complements
a firm will continue to employ more land until its value of the MP of land is
equal to rental rate
compare to a perfectly competitive market, in a monopsonistic market
fewer workers will be hired
an increase in the wage rate will
cause an upward movement along the labor supply curve
economic rent is
income earned above a factor's opportunity cost, by any factor owner
the derived demand concept suggests that an increase in the demand for computers will
increase the demand for microchip design engineers
a labor union is introduced in a perfectly competitive labor market causes
higher earnings
the higher the interest rate, the
higher the opportunity cost of current consumption
if the MP of labor per dollar is greater than the MP of capital per dollar, the firm should
hire more labor
in a perfectly competitive market, marginal resource cost faced by any one firm
is fixed, because any one firm is too small to influence the price of the factor
which factor of production receives the largest portion of the income in the US
labor
a profit maximizing firm will hire
labor until its wage rate equals its marginal revenue product
the increase in output created by the addition of one more unit of input is called
marginal physical product
for a firm buying labor in a perfectly competitive labor market, the marginal revenue product curve slopes downward after some point because as more of a factor is employed, what declines?
marginal product
the increase in total revenue from the addition of one more unit of input is called
marginal revenue product
in the factor market, what would be the most certain result of an increase in worker productivity and an increase in the price of the product at the same time
marginal revenue product of labor would increase
to maximize profits, a firm should
set MRP=MRC regardless of its market setting
choosing the combination of inputs that maximizes profits means
setting the marginal revenue products equal to the marginal resource cost for each factor
for a firm that sells its output and buys its inputs in a purely competitive markets, the labor demand curve
slopes downward and the labor supply curve is perfectly elastic
an automobile factory employs either assembly line workers or robotic arms to produce. in this case, labor and capital are considered
substitutes
in a monopsonistic labor market
the MRC of labor is above the market wage
the demand curve for labor is derived from
the demand curve for the output produced by labor
in derived factor demand, the word derived refers to the idea that the factor demand is derived from
the demand for the final good or service the factor is used to produce
the demand for lemon candies is fairly elastic, since there are many substitutes for lemon candy, therefore
the derived demand for lemons is likely to be elastic
if the demand for lemon candy decreased
the derived demand for lemons would decrease
the demand curve for a factor is
the factor's MRP curve
what describes why the MRP of an input in a perfectly competitive market decreased as a firm increased quantity of input used
the law of diminishing marginal returns
other things equal, the demand for labor will be more elastic
the more substitute labor is with other inputs
in the factor market, what would happen if the workers became more productive and at the same time, the price of the product fell?
the value of the marginal product of labor would be indeterminante
a monopsonistic labor market is one in which
there is only one buyer of labor
most americans receive most of their income in the form of
wages and salaries
what could shift the supply curve for labor to the right
an increase in labor market opportunities for women
what will increase the demand for labor?
an increase in labor productivity
a competitive labor market is currently in equilibrium. which of the following increases market wage?
demand for the good produced by this labor is stronger
the demand for labor is
derived from the demand for the products produced by labor
if hiring more workers leads to each new worker producing less than the previous worker, this is called
diminishing marginal product