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31 Oct 2020

2. The first rule of labor markets envisage that

a. If a firm wants to maximize profits, it will never pay more (in terms of wages and benefits) for a worker than the value of his or her marginal productivity to the firm.

b. firms should pay generously to their workers.

c. firms should pay workers according to the average productivity of the workers.

d. firms should not discriminate between workers in terms of pay and benefits.

Booster class

Microeconomics

Skill

Understanding the Labor Markets

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Raushan RajLv8

31 Oct 2020

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Related questions

1. What is the relationship between the labor demand curve under monopoly and perfect competition? Use the necessary formulas and explain.

2.What is the equilibrium condition for finding the optimal number of workers a perfectly competitive firm will hire? a. In the short-run. b. In the long-run.

3.A firm faces a perfectly elastic demand for its output for $6 per unit of output and each hour of labor produces five units of output. For L number of workers hired each hour and w hourly wage rate, the firm faces an upward-sloped labor supply curve of L = 20w - 120 and the firms face an upward-sloped marginal cost of labor curve is given as MC = 6 + 0.1L. How many workers should the firm hire each hour to maximize profits? What wage will the firm pay?

greenhornet700

Question 1

A firm should hire workers up to the point where

Question 1 options:

	MP = P.
	MFC = P.
	MFC = MRP.
	MP = MRP.

Question 2

If the additional revenue from hiring an additional worker equals the additional costs from hiring the extra worker, then we know that

Question 2 options:

	MFC/MPP_L = wage.
	MFC/MRP_L = 1.
	MFC = MPP_L.
	MRP_L/P = MFC.

Question 3

A firm that maximizes profits also

Question 3 options:

	pays input prices lower than other firms do.
	cuts corners in production processes so that its products are made too cheaply.
	is inefficient.
	uses the least-cost combination of resources.

Question 4

The demand curve for labor slopes down because

Question 4 options:

	firms value less efficient workers less than they value more efficient workers.
	firms must lower prices to sell the additional units of its product that the extra workers produce.
	of profit maximizing behavior.
	of the law of diminishing marginal product.

Question 5

If MFC > MRP_L, the firm should

Question 5 options:

	get rid of some capital.
	reduce the number of workers.
	lower wages.
	hire more workers.

Question 6

Which of the following will not lead to an increase in the demand for labor for a firm producing automobiles?

Question 6 options:

	A decrease in labor productivity.
	A decrease in the price of automobiles.
	A decrease in the price of robots that are used to solder parts of the car together.
	An increase in the demand for automobiles.

Question 7

The marginal revenue product gives

Question 7 options:

	the additions to total cost when an additional unit of a variable input is hired.
	the additional revenue obtained when an additional unit of a variable input is hired.
	the change in total product for an additional unit of a variable input.
	the amount that other inputs must increase by when labor increase by one unit.

Question 8

The monopolist's input demand curve is the

Question 8 options:

	marginal physical product curve.
	marginal revenue product curve.
	marginal revenue curve.
	marginal factor cost.

Question 9

An increase in product price implies that

Question 9 options:

	the firm's demand for labor increases.
	the firm's demand for labor decreases.
	the wage rate the firm pays will increase.
	the firm's marginal factor cost will increase.

Question 10

Which of the following will not lead to a change in the demand for labor?

Question 10 options:

	A change in the supply of labor.
	A change in demand for the final good.
	A change in the price of a substitute input.
	A change in labor productivity.

skyox48

Below is the production scheduale for gizmos. It shows the relationship between the number of workers hired (L) and output (Q). In addition, if the firm want to hire more workers it has to raise the wage rate that must be paid

L Q Wage Rate
0 0 0
1 50 60
2 105 64
3 166 68
4 224 72
5 278 76
6 328 80
7 375 84
8 418 88
9 457 92
10 492 96
11 522 100
12 548 104
1) What is the marginal product of the 6th worker?
2) What is the average product of 9 workers?
3) What is the marginal cost of hiring the 7th worker?
4) At what quantity of workers is the average product a maximum? What is the maximum?
5) If I could sell all of the ouput I want at a price of $4.00 how many workers should I hire if I am to maximize profits? What are my maximum profits?
6) Now assume that I can only sell a unit of ouput for $3.00. How many workers should I now hire if I am to maximize profits? What are my maximum profits?

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