EC120 Lecture Notes - Lecture 18: Marginal Product, Technological Change, The Purchase Price

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16 Dec 2015

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18 - the markets for the factors of. Factors of production - the inputs used to produce goods and services o o o. The demand for a factor of production is a derived demand. The firm is competitive both in the market for the product and in the. The firm is profit-maximizing market of product makers. The production and the marginal product of labour. Production function - the relationship between the quantity of inputs used to make a good and the quantity of output of that good. Marginal product of labour (mpl) - the increase in the amount of output from an additional unit of labour. Diminishing marginal product - the property whereby the marginal product of an input declines as the quantity of the input increases. Value of the marginal product (vmp) - the mp of an input x the price of the output o. Economists sometimes call the vmp the firm"s marginal revenue.

Related Questions

1. The addition to the revenue obtained from firing an additional unit of labour is:

a. marginal revenue product

b. marginal physical product of labour

c.total product

d. marginal factor cost

2. The firm's demand curve for labour is:

a. the demand curve for the good produced divided by the price of the good

b.the marginal revenue product curve for labour

c.the marginal physical product curve for labour divided by the good

d. the marginal physical product curve for labour multiplied by the price of labour

3. If the price of the product is $1.50 and the marginal factor cost of an additional unit of input is $105, how many units of labour should be hired?

Labor input (workers/day)_______________________________-total physical product (output/day)

10 __________________________________________________500

11__________________________________________________600

12__________________________________________________690

13___________________________________________________760

14___________________________________________________800

a. 14

b.12

c.13

d.11

4. the price elasticity of demand for labour equals

a. the change in quantity demanded of labour divided by the change in the price of labour

b. the slope of the demand curve for labour

c. the percentage change in the price of labour divided by the percentage change in the supply of labour

d. the per cent change in the quantity demanded of labour divided by the percentage change in the price of labour

5. We would expect that a rise in labour supply will have a proportionately larger effect on the market wage rate when:

a. the supply for labour is elastic

b.the demand for labour is unitary elastic

c.the demand for labour is elastic

d.the demand for labour is inelastic

orangerhinoceros668

A firm's production function is the relationship between:

A) the inputs employed by the firm and the resulting costs of production.

B) the factors of production and the resulting outputs of the production process.

C) the demand for a firm's output and the quantity it is able to produce with available resources.

D) the firm's production costs and the amount of revenue it receives from the sale of its output.

whiteprairie-dog253

1. In a perfectly competitive industry, an individual firm faces:

a. a perfectly elastic labour supply curve

b. a perfectly inelastic labour supply curve

c.a perfectly vertical labour supply curve

d.none of the above

2. A firm purchases more capital equipment. We would expect to observe:

a. an increase in the supply of labour for this firm

b. a decrease in the supply curve of labour for this firm

c.an increase in the wage rate paid for labour by this firm

d.an increase in the demand for labour by this firm

3. Which of the following would be h most likely outcome if all perfectly competitive firms in a product market join together to form a monopoly?

a. the rate of output in the market will increase but the quantity of labour input will decrease

b.both the rate of output and the quantity of labour input employed will increase

c.the rate of output in the market will decrease but the quantity of labour input will increase

d.both the rate of output and the quantity of labour input employed will decrease

4. what does the marginal revenue product equal when 28 workers are hired in one week?

Labor input (workers per week)__Marginal physical product (output per week)__marginal revenue

25_______________________150_________________________________9.00

26_______________________140_________________________________8.50

27_______________________130_________________________________8.00

28_______________________120_________________________________7.50

29_______________________110________________________________7.00

a. $210

b.$7.50

c.$900

d.$1040

5. The profit-maximizing firm will hire additional workers until:

a. the extra revenue by the last workers hired equals zero

b.the extra cost associated with hiring the last worker equals the price of goods produced

c.the additional cost associated with hiring the last worker equals the average wage rate of workers

d.the additional cost associated with hiring the last worker equals the additional revenue generated by that worker.

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EC120 Lecture Notes - Lecture 18: Marginal Product, Technological Change, The Purchase Price

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