# MicroEcon Final

### 38 terms by spencer_stone5

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is a wage taker

### Refer to picture 1. The firm:

Has a constant marginal resource cost of \$5.

\$15

### A monopsonistic employer's marginal resource (labor) cost curve:

lies above the labor supply curve because the higher wage paid to an additional worker must also be paid t all other employed workers

A and F

\$200 per acre

### Economic rent refers to the price paid for land and other natural resources that:

are fixed in total supply

### The supply curve of loanable funds is upsloping because:

households are willing to save more at high interest rates than they are at low interest rates

### The demand for loanable funds is downsloping because:

households are willing to save more at high interest rates than they are at low interest rates

### Other things equal, an increase in the equilibrium interest rate will:

decrease purchases of capital goods and reduce R&D spending.

### The XYZ Corporatin can make a real (inflation-adjusted) return on an investment of 9 percent. The nominal rate of interest is 13 percent and the rate of inflation is 7 percent. We can conclude that the:

investment will be profitable.

### A normal profit is:

the price required to retain entrepreneurial talent in some particular line of production

### The largest single share of all income earned by americans consists of:

wages and salaries

### Which of the following statements best illustrates the concept of derived demand?

A decline in the demand for shoes will cause the demand for leather to decline

### The MRP curve for labor:

is the firm's labor demand curve

18 haircuts

\$108

### Harry owns a barber shop and charges \$6 per haircut. By hiring one barber at \$10 per hour the shop can provide 24 haircuts per 8 hour day. By hiring a second barber at the same wage rate the shop can now provide a total of 42 hair cuts per day. Harry should

hire the second barber because he will add \$28 to profits

### Refer to picture 45. This firm is:

selling its product in a purely competitive market

3 workers

5 workers

### If the nominal wages of carpenters rose by 5 percent in 2010 and the price level increased by 3 percent, then the real wages of carpenters

increased by 2 percent

### A profit-maximizing firm will:

expand employment if marginal revenue product exceeds marginal resource cost.

\$4.

3

39

\$3

monopsonist

2

5

\$20

4

\$2

### If the price of hats increases what will happen to the number of workers hired in the short run?

# of workers hired will increase in order to increase output so that MRC=MRP

### Where do employers want to employ at?

MRP=MRC ( also labor market equilibrium)

### If MRC is higher than wage rate

firm is wage maker

### How do monopsonys maximize profit

by hiring smaller amounts of workers

### Money is more valuable...

the sooner it is obtained. (ability to gain interest etc)

Example: