Studied by 3 peopleThe value of the marginal product is equal to
marginal product times the price per unit of output
Maria operates a persimmon orchard in southeastern Oklahoma. She pays her workers $248 per week to pick and process persimmons, and she sells her persimmons for $6 per bushel. If she adds one more worker and that worker can pick and process 44 bushels per week, what will be the profit for Maria from hiring that worker?
$16
Barry's Brewpub is considering hiring more brewmasters (they already employ several). A pint of brew sells for $3. The current market wage of a brewmaster is $150 per day. Barry's Brewpub will hire another brewmaster only if they believe the new brewmaster will:
raise total production to 50 or more pints per day.
The individual producer's labor demand curve is the…
Value of the marginal product of labor curve(VMPL/MRP)
Laura is a price-taking farmer who produces corn. Assume the wage rate for workers is $130 and the price per unit of corn is $10. The table shows Laura's production function. Suppose Laura is currently employing two workers. If she adds the third worker, her profits will…
increase by $80
Workers and Corn Output) Laura is a price-taking farmer who produces corn. Assume the wage rate for workers is $125 and the price per unit of corn is $10. The table shows Laura's production function. To maximize profits Laura should employ ________ workers.
four
The Value of the Marginal Product Curve) In the figure, the VMPL curve will shift to the right if
a technological advance makes labor more productive
If the extra output that is produced by hiring one more unit of labor adds more to ________ than to ________, the firm will increase its profit by increasing the use of labor.
total revenue; total cost
Value of the Marginal Product of Labor and Demand) If the product price is $2 per unit, the value of the marginal product for the fifth unit of labor is
$40
If the product price is $2 per unit and the market wage rate is $20 per unit of labor, the profit-maximizing quantity of labor is ________ units.
six
A factor demand curve will shift because of
a change in the price of the good the factor produces
An increase in the demand for construction workers may come about because of an
increase in the demand for new housing
If marginal product is ________, value of marginal product must be ________
falling; falling
A firm's demand curve for labor is
its VMPL curve
If W < VMPL…
the firm should hire more labor
If the wage rate rises, firms will find that
they move upward and to the left along the labor demand curve
Derived demand for a factor means
the demand for factors depends on the demand for the outputs the factor can produce.
The firm's value of marginal product curve slopes downward because of
Diminishing Marginal Return, DMR
A new law is passed, requiring people to have an associate’s degree in order to work as a waiter. We would expect
wages for waiters to rise and typical restaurants to hire fewer waiters.
The market supply curve for labor slopes upward because
more workers are willing to work in the market at higher wages.
The behavior of a monopolist differs from that of a competitive industry in that
the monopolist restricts output and hires less labor.
The supply of labor to the individual firm in a competitive labor market is
perfectly elastic at the market wage rate.
What would NOT shift an industry’s supply of labor curve?
The wage rate in the particular industry falls.
If a firm hires labor in a competitive labor market and the market wage is $10, the marginal resource cost of labor is
$10
The marginal physical product(MPP) of labor is the
change in output that results from hiring another worker
In terms of labor supply, the substitution effect of a higher wage causes
an increase in the quantity of labor supplied.
In monopsony, the marginal resource cost of a worker is
equal to the worker’s wage plus the increase in the wages of the other workers.
A monopsony exists when
a single firm is the only buyer of a particular resource.
According to efficiency wages theory
firms sometimes pay a wage higher than the market wage in order to attract higher quality workers and reduce turnover costs.
It becomes widely known that conditions improve for workers in textile factories, with more frequent breaks and more comfortable work spaces. All other things being equal, this will likely lead to
a decrease in the wages for textile workers
A firm should hire another worker as long as
MRP>MRC
If higher wages begin to be paid to fast food workers we would expect
The supply of retail workers to fall
A Monopsony will hire additional workers until
MRP = MRC
If a 5th worker is hired, hat production rises from 15 hats to 22 hats. Hat price is $10....
The 5th worker should be hired if wage is $60.
The productivity of workers in an industry rises. In that industry we would expect
wages to rise and more workers to be hired.
As wage rises, the substitution effect makes you want to work ______
more, and the income effect makes you want to work less
If a monopolist hires 2 workers, Q=10 and P=$5. If they hire 3 workers, Q=15 and P=$4. The 3rd worker's MRP is
$10
Which of the following would result in lower wages for waiters?
Better working conditions for waiters
Why is MRC greater than wage for the Monopsonist?
Because they must raise the wage of all workers to hire additional workers
If the price of the product workers produce rises _________, but if wage rises __________.
The demand for workers rises; the quantity demanded of workers falls
Note
Flashcard