ECN Ch 11

96. In Exhibit 11-12, at the profit-maximizing level of employment, the firm's MFC is equal to ____ and the firm's MRP is equal to ____. a. $30; $30 b. $25; $27 c. $30; $25 d. $27; $30

a. $30; $30

47. Currently, union membership in the United States is about what percentage of civilian employees? a. 10 percent. b. 15 percent. c. 20 percent. d. 25 percent.

a. 10 percent.

72. In Exhibit 11-12, suppose this labor market is unionized by a powerful union which forces a wage of $35 upon the industry. The firm would respond by hiring ____ workers and paying a wage of ____. a. 40; $35 b. 60; $30 c. 70; $27 d. 60; $35

a. 40; $35

26. A competitive car wash currently hires 4 workers, who together can wash 80 cars per day. The market price of car washes is $5 per wash, and the price of workers is $60 per day. The car wash should hire a fifth worker if it would increase total production to at least: a. 92 cars per day. b. 100 cars per day. c. 104 cars per day. d. 110 cars per day.

a. 92 cars per day.

102. Which of the following statements is true? a. A monopsony is the only employer of a factor of production. b. A monopsony will pay workers a higher wage and employ fewer workers than a competitive labor market. c. A monopsony has a marginal factor cost curve which lies below its supply curve of labor. d. Unions are becoming a greater influence in American labor markets.

a. A monopsony is the only employer of a factor of production.

66. The demand curve for labor of Coca-Cola manufacturers will not shift to the right if: a. Coca-Cola workers become unionized. b. the price of Coca-Cola increases. c. the firms innovate with new technology that raises labor productivity. d. the price of Pepsi increases.

a. Coca-Cola workers become unionized.

92. If the labor market shown in Exhibit 11-8 is competitive, the wage rate and number of workers employed will be determined at point: ​ a. F. b. B. c. C. d. D.

a. F.

61. In Exhibit 11-7, which of the following could have caused the shift in labor demand from D1 to D2? a. Increase in the demand for the product. b. Decrease in wages. c. Decrease in price of product. d. Decrease in demand for the product.

a. Increase in the demand for the product.

60. Which of the following would cause the demand for labor to change? a. a change in the price of the good produced b. a change in the cost of living c. changes in the wage rate d. movements along the labor demand curve

a. a change in the price of the good produced

79. In a labor market with one employer, the marginal factor cost is: a. above the labor supply curve. b. above the labor demand curve. c. what determines the wage. d. downward sloping.

a. above the labor supply curve.

65. An increase in demand for French fries will cause equilibrium wage rates: a. and quantities of potato workers hired to rise. b. and quantities of potato workers hired to fall. c. to rise and quantities of potato workers hired to fall. d. to fall and quantities of potato workers hired to rise.

a. and quantities of potato workers hired to rise.

87. The MFC curve increases for a monopsonist because: a. as more workers are hired, all workers receive higher wages. b. output price rises as a firm's market power increases. c. hiring more workers does not affect wages. d. the later workers hired are less productive.

a. as more workers are hired, all workers receive higher wages.

78. A monopoly is a sole ____, and a monopsonist is a sole ____. a. buyer in a product market; seller in a product market b. seller in a product market; seller in a labor market c. buyer in a product market; seller in a labor market d. seller in a product market; buyer in a labor market

a. buyer in a product market; seller in a product market

46. The process of negotiating labor contracts between the union and management concerning wages and working conditions is called a. collective bargaining. b. featherbedding. c. lobbying. d. an apprenticeship.

a. collective bargaining

Exhibit 11-5 A perfectly competitive labor market 30. In Exhibit 11-5, when the marginal revenue product is $20.00, firms should a. continue hiring workers. b. stop hiring workers. c. start firing workers. d. pay a wage above $15.00 to its workers

a. continue hiring workers.

53. If union-sponsored advertisements for a particular product succeed in increasing the demand for that product, the: a. demand for the union-labor used to produce the product will increase. b. demand for the union-labor used to produce the product will decrease. c. marginal factor cost of union-labor will increase. d. marginal factor cost of union-labor will decrease.

a. demand for the union-labor used to produce the product will increase.

57. If the MRP of labor decreases, labor: a. demand will decrease. b. demand will increase. c. supply will increase. d. supply will decrease.

a. demand will decrease

11. A firm's demand for labor depends on, in part, the demand for the firm's product. To summarize this idea, economists say that the demand for labor is: a. derived demand. b. marginal demand. c. secondary demand. d. monopsonistic demand.

a. derived demand

49. A union may negotiate limits on workload in order to increase the demand for labor and raise workers' salaries. This practice is known as: a. featherbedding. b. human capital formation. c. monopsonistic bargaining. d. artificial demand stimulus.

a. featherbedding

22. If the wage rate is fixed at a certain level, the: a. labor supply curve is horizontal. b. labor supply is a straight upward sloping line. c. MP must be constant. d. labor supply will increase at an increasing rate.

a. labor supply curve is horizontal

6. Which of the following is the best example of an investment in human capital? a. on-the-job training received by an apprentice electrician b. an increase in the number of hours worked per week by a worker in an unskilled laboring job c. the purchase of company stock by a worker d. payments into a retirement pension plan by a skilled laborer

a. on-the-job training received by an apprentice electrician

77. The best number of workers for any employer to hire is that quantity in which: a. the marginal revenue product equals the marginal factor cost. b. the marginal revenue product exceeds the marginal factor cost. c. total costs are minimized. d. total revenue is maximized.

a. the marginal revenue product equals the marginal factor cost

100. Lorna's Lumberyard is a monopsony. Lorna estimates that at a wage of $10, 100 workers would be willing to work for her. Similarly, at a wage of $12, 200 workers would be willing to work. Her marginal factor cost is: a. $10. b. $14. c. $120. d. $140.

b. $14

Exhibit 11-1Use the information in the accompanying chart to answer the following question(s). The firm hires labor competitively and sells its product in a competitive price-taker market. 2. Refer to Exhibit 11-1. What is the marginal revenue product of the fifth unit of labor? a. $6. b. $36. c. $54. d. $324.

b. $36

Exhibit 11-4 Supply and demand curves for food servers 8. In Exhibit 11-4, the equilibrium wage and the number of food servers employed per day, respectively, are: a. $2.00 and 5,000. b. $4.00 and 10,000. c. $6.00 and 15,000 d. $8.00 and 20,000.

b. $4.00 and 10,000

71. In Exhibit 11-10, the total wage cost of hiring 7 employees is: a. $15. b. $91. c. $13. d. $19. e. $112.

b. $91

95. In Exhibit 11-12, a profit-maximizing firm faced with this labor market will hire ____ workers and pay a wage of ____. a. 60; $35 b. 60; $25 c. 60; $27 d. 70; $30

b. 60; $25

5. Which of the following most clearly illustrates the concept of derived demand? a. An increase in the price of steak causes the demand for poultry to increase. b. An increase in the demand for new houses leads to an increase in the demand for construction workers. c. An increase in consumer income leads to an increase in the demand for services provided by the government. d. An increase in the demand for new cars causes the demand for used automobiles to rise.

b. An increase in the demand for new houses lead to an increase in the demand for construction workers.

93. If the labor market shown in Exhibit 11-8 is a monopsony, the wage rate and number of workers employed will be determined at point: ​ a. F. b. B. c. C. d. D.

b. B.

73. If an employer currently finds that the MRP of its labor resources equals $67, and the MFC equals $56, what would you advise the firm to do? a. Stay at its current output level. b. Hire additional workers. c. Raise product prices. d. Reduce employment.

b. Hire additional workers.

43. If cats become a more popular pet in the United States than they are now, what can we expect to happen to the market for cat food workers? a. MP increases b. MRP increases c. wage decreases d. MRP decreases

b. MRP increases

103. Which of the following statements is true? a. Marginal revenue product is the extra revenue generated to the firm from the production of one more unit of output. b. Marginal factor cost is the extra cost to a firm of employing one more unit of a factor of production. c. The demand curve for a perfectly competitive employer is horizontal at the market wage rate. d. The supply curve of labor is upward sloping because of the law of diminishing marginal productivity.

b. Marginal factor cost is the extra cost to a firm of employing one more unit of a factor of production.

68. Which of the following statements is true? a. Derived demand for labor depends on the demand for the other inputs into production. b. Unions can either increase demand or decrease the supply of labor. c. Investment in human capital is expected to decrease the demand for those workers because there will be a greater number of qualified workers available. d. Unions can effectively increase wages by lobbying for looser immigration laws.

b. Unions can either increase demand or decrease the supply of labor.

35. A technological advance that increases the productivity of teachers can be expected to have what effects on the equilibrium labor market for teachers? a. Wages will rise, and quantity of labor will fall. b. Wages will rise, and quantity of labor will rise. c. Wages will fall, and quantity of labor will fall. d. Wages will fall, and quantity of labor will rise.

b. Wages will rise, and quantity of labor will rise.

39. A decrease in the marginal product of labor would be represented by a(n): a. increase in labor demand. b. decrease in labor demand. c. increase in the quantity demanded of labor. d. decrease in the quantity demanded of labor.

b. decrease in labor demand.

51. Featherbedding allows unions to increase wages by: a. limiting the supply of labor. b. increasing firms' demand for labor. c. forcing firms to accept higher-than-equilibrium wages. d. reducing labor share of payroll taxes.

b. increasing firms' demand for labor.

56. If the price of labor falls, we can expect: a. demand for labor will increase. b. quantity demanded of labor will increase. c. demand for labor will decrease. d. quantity demanded of labor will decrease.

b. quantity demanded for labor will increase.

41. Suppose a change in technology increases the marginal product of labor. The result is a(n): a. downward movement along the demand for labor curve. b. rightward shift in the demand for labor curve. c. leftward shift in the demand for labor curve. d. upward movement along the demand for labor curve.

b. rightward shift in the demand for labor curve.

38. A union may attempt to obtain stricter certification requirements or longer apprenticeships. These changes would raise workers' wages because they: a. create unnecessary unemployment. b. shift in labor supply curve leftward. c. decrease the marginal product of labor. d. reduce management's use of featherbedding.

b. shift in labor supply curve leftward.

104. Which of the following is not true about a monopsonist? a. It can set the wage rate and hire any desired number of workers at that wage. b. It is the only buyer of labor in a market. c. It usually extracts rents from its monopsony power. d. It determines the optimal employment-wage rate combination by equating the marginal revenue product of labor to the marginal cost of labor.

a. It can set the wage rate and hire any desired number of workers at that wage.

24. Harold Brown runs a company that sells encyclopedia sets for $250 each. When he employs 10 workers, they can sell 60 sets per week, while only 54 sets are sold when 9 workers are employed. What is the weekly marginal revenue product of the tenth worker? a. $250. b. $1,250. c. $1,500. d. $15,000.

c. $1,500

89. Suppose a firm can hire 100 workers at $8.00 per hour but must pay $8.05 per hour to hire 101 workers. Marginal factor cost (MFC) for the 101st worker is approximately equal to: a. $8.00. b. $8.05. c. $13.05. d. $13.00.

c. $13.05

In Exhibit 11-5, at what wage rate will the firms stop hiring these workers? a. $25.00. b. $20.00. c. $15.00. d. $10.00.

c. $15.00

90. BigBiz, a local monopsonist, currently hires 50 workers and pays them $6 per hour. To attract an additional worker to its labor force, BigBiz would have to raise the wage rate to $6.25 per hour. What is BigBiz's marginal factor cost? a. $6.25 per hour. b. $12.50 per hour. c. $18.75 per hour. d. $20 per hour.

c. $18.75 per hour.

70. In Exhibit 11-10, the marginal factor cost of the 8th employee is: a. $14. b. $13. c. $21. d. $112.

c. $21

3. Tucker Corporation sells its product for $5.00. Tucker's industrial engineers have informed management that hiring one additional worker will increase output by five units per hour. Tucker should hire the additional worker only if the wage rate is: a. $5.00 or less per hour. b. $1.00 or more per hour. c. $25.00 or less per hour. d. more than $25.00 per hour.

c. $25.00 or less per hour.

99. Suppose a monopsonist hires its second worker and this hiring has a marginal factor cost of $75 per day. If the market wage is now $62.50 per day, what was the first employee earning when she worked alone? a. $40. b. $45. c. $50. d. $55.

c. $50

25. The following chart indicates the reductions in total losses due to theft if a jewelry store hires additional security guards. If the security guards can be hired for $45 per day, how many guards should the shop hire? a. 2. b. 3. c. 4. d. 5.

c. 4

Exhibit 11-1Use the information in the accompanying chart to answer the following question(s). The firm hires labor competitively and sells its product in a competitive price-taker market. 23. Refer to Exhibit 11-1. If the market wage rate is $25 per day, how many workers should the firm hire if it wants to maximize profits? a. 4. b. 5. c. 6. d. 7.

c. 6

1. If a product's price increases, then its: a. MP will increase. b. MFC will increase. c. MRP will increase. d. MP will decrease.

c. MRP will increase.

52. If product price increases, then: a. MP will increase. b. MFC will increase. c. MRP will increase. d. MP will decrease.

c. MRP will increase.

59. What happens to the marginal product of labor when the market price of the good produced increases? a. Increases proportional to price. b. Decreases proportional to price. c. Stays the same. d. Falls because quantity demanded falls.

c. Stays the same.

64. If more and better technology is used for producing wheat in the United States than in a lesser-developed country, then the: a. MRP of the U.S. workers will be higher than the MRP of the workers in the lesser-developed country. b. MRP of the U.S. workers will be lower than the MRP of the workers in the lesser-developed country. c. demand for the U.S. workers will be lower than the demand for the workers in the lesser developed country. d. price of wheat will be higher in the United States than in the lesser-developed country.

a. MRP of the U.S. workers will be higher than the MRP of the workers in the lesser-developed country.

62. According to the economic theory of labor markets, if unions are successful in raising wages, with no accompanying increase in labor productivity, then which of the following is true? a. The quantity of labor demanded by profit-maximizing firms will decline. b. The quantity of labor demanded by profit-maximizing firms will increase. c. The quantity of labor supplied by workers will decline. d. There will be a shortage of labor in the unionized labor market.

a. The quantity of labor demanded by profit-maximizing firms will decline.

80. If a town has a monopsony, this means: a. there is only one employer. b. price discrimination takes place. c. goods are priced too high. d. no unions can exist.

a. there is only one employer.

97. In Exhibit 11-13, how many workers will the monopsonist hire? a. 4. b. 5. c. 3. d. 6.

b. 5.

10. Which of the following is the most accurate definition of a worker's marginal revenue product? a. The change in the firm's profits as the result of hiring an additional worker. b. The change in the firm's total revenue as the result of hiring an additional worker. c. The change in the firm's output as the result of hiring an additional worker. d. The change in the firm's cost as the result of hiring an additional worker.

b. The change in the firm's total revenue as the result of hiring an additional worker.

63. If a union is able to successfully lobby Congress to limit imports of rival products, and thus to raise the demand (and thus price) for the goods or services they make, then which of the following best describes the outcome? a. The supply of labor will increase. b. The demand for labor will increase. c. The supply of labor will decrease. d. The demand for labor will decrease.

b. The demand for labor will increase.

44. Which of the following will decrease the demand for fast-food burger workers' labor? a. More people start working two jobs and eat more fast food. b. The price of pizza, a substitute for burgers, decreases. c. A new technology allows burgers to be produced faster. d. Workers get additional training that increases productivity.

b. The price of pizza, a substitute for burgers, decreases.

101. Given the same marginal revenue product (MRP) and supply curves, the equilibrium quantity of labor employed in a monopsonistic labor market will be: a. equal to that in a competitive labor market. b. less than that in a competitive labor market. c. greater than that in a competitive labor market. d. there is insufficient information for a conclusion.

b. less than that in a competitive labor market.

20. Dividing the change in total revenue by the change in labor gives: a. marginal product of labor. b. marginal revenue product of labor. c. the price of the output. d. demand for the output.

b. marginal revenue product of labor.

13. The marginal cost of labor for a perfectly competitive firm is given by: a. the marginal product of labor. b. the market wage rate. c. its marginal revenue product curve. d. the demand curve for labor.

b. the market wage rate.

86. A monopsonist can pick the ____, while a monopolist can pick the ____. a. price it will charge; wage it will pay b. wage it will pay; price it will charge c. number of competitors; number of buyers d. marginal product of labor; marginal cost of labor

b. wage it will pay; price it will charge

98. Use Exhibit 11-13. What wage rate will the monopsonist pay the workers? a. $11. b. $13. c. $12. d. $16.

c. $12

If the equilibrium wage rate in Exhibit 11-4 increased, the cause could be that: a. the wage increased. b. the marginal product of labor decreased. c. either the demand for labor increased or the supply of labor decreased. d. the price of the product produced by the labor decreased.

c. either the demand for labor increased or the supply of labor decreased.

81. A monopsony will: a. hire more workers than a competitive employer. b. pay a higher wage than a competitive employer. c. employ a quantity of labor where the marginal revenue product equals the marginal factor cost. d. have a marginal factor cost curve equal to the labor supply curve.

c. employ a quantity of labor where the marginal revenue product equals the marginal factor cost.

12. The labor supply curve facing an individual employer in a perfectly competitive labor market is: a. upward sloping. b. downward sloping. c. horizontal. d. the MRP curve.

c. horizontal

83. For a monopsonist, the supply of labor facing the firm is: a. an insignificant portion of the market supply. b. perfectly horizontal. c. identical to the supply curve facing the market. d. the summation of each firm's demand for labor.

c. identical to the supply curve facing the market.

54. Which of the following can shift the labor demand curve to the right? a. decrease in product price b. increase in wages c. increase in productivity d. decrease in the marginal product

c. increase in productivity

7. One reason the supply of carpenters is greater than the supply of physicians is because: a. carpenters demand less income. b. physicians do not belong to a union. c. of differences in human capital. d. carpenters belong to unions.

c. of differences in human capital.

94. In Exhibit 11-11, the total wage cost of hiring 12 employees is equal to: a. $17.80. b. $63.80. c. $102.70. d. $81.60.

d. $81.60

84. Wage and MFC differ for a monopsonist because: a. the monopsonist is forced to pay a wage greater than the worker's MFC. b. the monopsonist must accept the market wage rate. c. workers are not as efficient when employed by a monopsonist. d. any wage increase applies to all workers, not just to the next hired.

d. any wage increase applies to all workers, not just to the next hired.

75. If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the: a. marginal factor cost is $6. b. marginal factor cost is $200. c. total wage cost is $1,200. d. total wage cost is $7,200.

d. total wage cost is $7200

40. An increase in the demand for a product will shift the a. supply of labor used to produce the product rightward. b. supply of labor used to produce the product leftward. c. demand for labor used to produce the product rightward. d. demand for labor used to produce the product leftward.

c. demand for labor used to produce the product rightward.

45. A union can influence the demand for labor by: a. requiring union fees. b. raising union fees. c. effective advertising that convinces customers to buy the "union label." d. lobbying for legislation to reduce immigration.

c. effective advertising that convinces customers to buy the "union label."

9. The marginal revenue product of a resource: a. is defined as the marginal product of the resource multiplied by the resource price. b. simply means that a firm should add to its capital stock as long as competition requires it. c. equals the extra output produced by an additional unit of the resource multiplied by the price of that output. d. equals the average product of the resource multiplied by the cost of hiring an additional (marginal) unit of the resource.

c. equals the extra output produced by an additional unit of the resource multiplied by the price of that output.

29. In Exhibit 11-4, suppose that in the interest of boosting incomes of the working poor, Congress imposes a minimum wage of $6.00 per hour. This minimum wage rate creates a(n): a. new labor market equilibrium. b. excess demand for labor of 10 thousand food servers. c. excess supply of labor of food servers. d. situation of full employment for food servers.

c. excess supply of labor of food servers.

82. A monopsonist's marginal factor cost (MFC) curve lies above its supply curve because the firm must: a. lower the factor price to hire more. b. increase the price of its product to sell more. c. increase the factor price to hire more. d. lower the product price to sell more.

c. increase the price of its product to sell more.

17. The marginal revenue product of a resource is: a. the marginal product of the resource divided by the price of the product it helps to produce. b. the price of the product times the price of the resource. c. larger when the product price is larger. d. larger when the marginal product is smaller.

c. larger when the product price is larger.

91. A monopsony owner believes that hiring an additional worker would increase the company's revenue by $150 per day. We can conclude that the monopsony pays its workers: a. more than $150 per day. b. exactly $150 per day. c. less than $150 per day. d. exactly $75 per day.

c. less than $150 per day.

76. A monopsonist hires the amount of labor where the marginal revenue product of labor equals the: a. price of the monopsonist's product. b. wage rate. c. marginal factor cost of labor. d. marginal product of labor.

c. marginal factor cost of labor

85. In Exhibit 11-12, we know this exhibit shows a monopsonistic labor market because: a. the MRP curve slopes down. b. the market supply of labor curve is horizontal. c. the MFC curve lies above the supply of labor curve. d. the MRP curve lies below the supply of labor curve.

c. the MFC curve lies above the supply of labor curve.

Exhibit 11-3 Labor supply curve 27. In Exhibit 11-3, the total wage cost of hiring 6 employees is: a. $18 per hour. b. $36 per hour. c. $3 per hour. d. $108 per hour.

d. $108 per hour.

Exhibit 11-2 Labor and output data 4. In Exhibit 11-2, if product price is fixed at $5, the MRP of the third worker is equal to: a. $35. b. $125. c. $80. d. $175.

d. $175

Exhibit 11-4 Supply and demand curves for food servers 28. In Exhibit 11-4, assume that both input and output markets are perfectly competitive. If one additional server increases the number of meals sold by four per day and each meal sells for $10, each additional food server will be paid: a. $16 per day. b. $32 per day. c. $36 per day. d. $40 per day.

d. $40 per day.

105. In Exhibit 11-11, the wage required to hire 12 employees is equal to: a. $5.80. b. $6.00. c. $6.50. d. $6.80.

d. $6.80

42. Suppose the price of HD televisions decreases. As a result, the a. MP of the workers making HD televisions will increase. b. MFC of the workers making HD televisions will increase. c. MRP of the workers making HD televisions will increase. d. MRP of the workers making HD televisions will decrease.

d. MRP of the workers making HD televisions will decrease.

33. Which of the following statements concerning the supply of labor is true? a. The wage rate has no effect on the supply of labor. b. The labor supply curve is downward sloping. c. The supply of labor is determined by the prevailing wage rate. d. The typical labor supply curve is upward sloping.

d. The typical labor supply curve is upward sloping.

21. The demand for a factor of production depends on the: a. supply of the factor. b. supply of other factors of production. c. demand for other factors of production. d. demand for the products that it helps to produce.

d. demand for the products that it helps to produce.

14. A worker's accumulated investment in education, training, experience, and health is called: a. derived labor demand. b. collective entrepreneurship. c. seniority. d. human capital.

d. human capital

58. A technological advance that increases labor productivity will: a. decrease the demand for labor as MP falls. b. decrease the demand for labor as fewer workers are needed. c. decrease the supply of labor as fewer workers are needed. d. increase the demand for labor as MP rises.

d. increase the demand for labor as MP rises.

55. An advance in technology which increases labor productivity will shift the: a. labor demand curve to the left. b. MFC curve to the left. c. MP curve downward. d. labor demand curve to the right.

d. labor demand curve to the right.

18. A firm's demand curve for labor coincides with the: a. marginal cost curve. b. average cost curve. c. marginal revenue curve. d. marginal revenue product curve.

d. marginal revenue product curve.

19. The demand for labor curve is identical to the: a. marginal revenue curve. b. marginal resource curve. c. total revenue curve. d. marginal revenue product curve.

d. marginal revenue product curve.

16. Firms should hire additional units of a resource as long as the: a. marginal product of the resource exceeds the price of the resource multiplied by the quantity of output produced. b. marginal product of the resource is less than the price of the resource. c. price of the output produced is positive. d. marginal revenue product of the resource exceeds the cost of an additional unit of the resource.

d. marginal revenue product of the resource exceeds the cost of an additional unit of the resource.

48. Which part of the United States has the largest union membership measured as the percentage of civilian employees in unions? a. south-western states b. western states that do not border the Pacific Ocean c. south-eastern states d. mid-western states

d. mid-western states

36. If the marginal product of labor is always positive, the total revenue will grow with each additional worker. Firms do not continuously hire new workers because: a. there isn't enough room in the factory. b. there isn't an infinite number of workers. c. wages would have to increase. d. they stop when MRP = wage

d. they stop when MRP = wage

15. The optimal hiring rule is to employ labor up to the point where: a. wage = MFC. b. wage = MP. c. wage = MR d. wage = MRP

d. wage = MRP

74. Suppose a monopsonist wants to hire more workers. If it has to pay the same wage to all of its workers, the: a. marginal factor cost will fall while the wage will rise. b. wage will fall while the marginal factor cost will rise. c. difference between the wage and marginal factor cost will become smaller. d. wage and the marginal factor cost will increase.

d. wage and the marginal factor cost will increase.