Demands for Resources
Use the table above to answer the following question. The table represents a sandwich shop's resource costs. The marginal resource cost of the 3rd worker is
$15
The table represents a sandwich shop's resource costs. The market wage rate for each worker is $15 per hour. Complete the table. What is the total labor cost of 4 workers?
$60
Select all that apply Which of the following will a firm do when it wants to produce additional output?
It will hire additional workers. It will make decisions at the margin.
Suppose market conditions change in an economy and, as a result, firms face an increase in the cost of each additional worker they hire. Which of the following is true in this case?
The marginal revenue cost curve shifts upward.
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 similar to the marginal product.
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.
The demand for labor is derived from the:
additional total revenue generated by hiring additional employees or purchasing additional resources.
The payment name for ___ is interest.
capital
A firm will purchase a resource if the benefit associated with the purchase is greater than or equal to its ___.
cost
All else equal, when the demand for the good or service a resource produces decreases, the demand for the resource used to produce it will:
decrease, shifting to the left.
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 ___ for labor is derived from its marginal revenue product.
demand
The marginal revenue product curve also represents the resource ___ curve.
demand
When economists refer to resource demand being a derived demand, they mean that the demand for the resource:
depends on the demand for the goods and services produced by the resource.
The demand for resources comes from the demand for the goods and services produced by those resources, and is hence called ___ demand.
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.
The marginal resource cost curve for a firm will shift if the:
employers pay for part of or all higher resource costs.
All physical and mental activity devoted to producing goods and services is classified as the resource ___.
labor
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 ___.
fall rise
In the circular flow model, ___ and ___ interact in the resource market and the product market.
households firms
Consider the demand for resource "A." All else equal, when the price of substitute resource "B" increases, the demand for resource "A" will:
increase, shifting to the right.
The payment name for capital is ___.
interest
When firms want to produce additional output, they make decisions at the ___. (Enter one word in the blank.)
margin
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 output produced as a result of utilizing one more unit of a variable resource is the ___ product.
marginal
If an employee's wage is tied to his or her productivity, a higher ___ revenue product should result in a ___ wage for that employee.
marginal higher
The additional output produced as a result of utilizing one more unit of a variable resource is known as the ___ ___.
marginal product
The additional cost incurred as a result of utilizing one more unit of a variable resource is called the ___ ___ ___.
marginal resource cost
If employees pay partially for higher resource costs, the:
marginal resource cost curve does not shift.
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.
Optimal resource utilization occurs where:
marginal revenue product equals marginal revenue cost.
The optimal level of resource utilization occurs where the:
marginal revenue product equals the marginal resource cost.
Resource utilization and marginal resource costs move in ___ directions.
opposite
In a ___ competitive market, if the price of a good is constant, the marginal ___ revenue product is equal to the marginal times the ___.
perfectly product price
Capital is sometimes divided into ___ capital and ___ capital.
physical human
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 marginal revenue product curve also represents the ___ demand curve.
resource
In the circular-flow model, the two markets are the ___ market and the ___ market. (Enter one word per blank.)
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
A firm should continue to hire workers so long as the:
revenue they generate exceeds or equals their cost.
A firm will purchase a resource if:
the benefit associated with the purchase is greater than or equal to its cost.
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.
In deciding how many workers a business should employ,:
the marginal revenue product is key.
When making hiring decisions, employers need to consider:
the productivity of their workers and the price of their products.