chapter 16
Suppose that eight workers can manufacture 70 radios per day and that nine workers can manufacture 90 radios per day. If radios can be sold for $20 each, the value of marginal product of the ninth worker is
400
Which of the following best explains the shape of the individual labor-supply curve?
The individual labor-supply curve slopes upward at lower wage rates and then bends back at higher wage rates.
Assume the market for candles is competitive. Other things being equal, a decrease in the market price of candles
decreases the demand for workers who make candles and decreases their equilibrium wage.
Suppose that technological progress increases the productivity of teachers, and the demand for teachers increases. Which of the following accurately describes the labor market for teachers after the technological change? Equilibrium wages will
rise, and the equilibrium quantity of teachers employed will rise.
When the wages paid to government economists increase, other thing being equal, the labor supply curve for academic economists
shifts to the left.
The term compensating wage differential refers to:
the wage differences that arise from differences in the risk involved in different jobs.
A profit-maximizing, competitive firm will always hire an additional worker when the additional worker makes a positive contribution to
total profit.
A wage differential between skilled and unskilled workers exists because skilled workers have higher marginal products than unskilled workers.
true
The labor-market-supply curve illustrates that, as the wage rate increases, the number of hours that each person is willing and able to work rises.
true
A competitive firm will hire workers up to the point at which the marginal revenue product of labor equals the
wage
Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada. Other things being equal, in the labor market in southern Canada, the equilibrium wage
will fall, and the equilibrium quantity of labor will rise.
The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?
work and leisure
Scenario 1Harry owns a snow-removal business. He hires workers to shovel driveways for him during the winter. The first worker he hires can shovel twelve driveways in one day. When Harry hires two workers, they can shovel a total of 22 driveways in one day. When Harry hires a third worker, he shovels an additional eight driveways in one day. Refer to Scenario 1. Suppose that Harry pays each worker $80 per day and that he charges each customer $20 to have his driveway shoveled. What is the marginal revenue product of labor for the second worker?
$200
Which of the following events would lead to an increase in the supply of labor?
A country experiences an increase in immigrant labor.
Which of the following events could decrease the demand for labor?
A decrease in demand for the final product produced by labor
John's Pizza Palace produces gourmet pizzas that sell for $20 each. Assume that labor is the only input that varies for the firm. If John hires 10 workers, he can produce and sell 600 pizzas per week. If he hires 11 workers, he can produce and sell 650 pizzas per week. John pays each of his workers $400 per week. Which of the following is correct?
For the 11th worker, the marginal revenue product is $1,000.
Which of the following refers to human capital?
The acquired skill and productivity of workers
Why do skilled workers earn relatively higher wages than unskilled workers?
The supply of skilled workers is relatively less.
Suppose that the market for labor is initially in equilibrium. If the firm employs labor-saving technology, the equilibrium wage
and the equilibrium quantity of labor will fall.
An example of human capital is the purchase of a computer to help accountants.
false
An increase in the wage rate lowers the opportunity cost of leisure and induces people to enjoy more leisure.
false
If an individual labor supply curve bends backward at some high wage, so does the market labor supply curve.
false
Since we all like to get richer, so when wage rate increases we always like to work longer hours to make more income.
false
The quantity of labor supplied by a particular wage earner will always increase as long as the wage rate increases.
false
As the wage rate increases, the quantity of labor supplied by an individual worker will:
first increase and then decrease.
The labor demand curve is based on the firm's:
marginal revenue product curve.
We observe a profit-maximizing firm hiring its 75th employee. It is possible to infer that, when 74 employees are hired, the
marginal revenue product of labor exceeds the wage.
The labor market is in equilibrium when:
the labor demand curve intersects the labor supply curve.
To say that a firm is perfectly competitive in the labor market is to say that the firm can choose
the number of workers it hires, but it cannot choose the wage it pays its workers.