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26 terms

Labor Markets

STUDY
PLAY
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
When economists say that the demand for labor is a derived demand, they mean that it is
related to the demand for the product or service labor is producing
In the United States professional football players earn much higher incomes than professional soccer players. This occurs because
consumers have a greater demand for football games than for soccer games
Marginal revenue product measures the
amount by which the extra production of one more worker increases a firm's total revenue
The marginal revenue product schedule is
the firm's resource demand schedule
The purely competitive employer of resource A will maximize the profits from A by equating the
price of A with the MRP of A
Marginal product is
the amount an additional worker adds to the firm's total output
Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is
$36
If one worker can pick $30 worth of grapes and two workers together can pick $50 worth of grapes, the
marginal revenue product of the second worker is $20
A competitive employer should hire additional labor as long as
the MRP exceeds the wage rate
A profit-maximizing firm employs resources to the point where
MRP = MRC
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 haircuts per day. The MRP of the second barber?
is $108
Assume that a computer disk manufacturer is employing resources so that the MRP of the last unit hired for resource A is $120 and the MRP of the last unit hired for resource B is $75. The price of resource A is $40 and the price of resource B is $25. To maximize profit the firm should
Hire more of both resource A and resource B
In a purely competitive market for economic resources, a firm's marginal revenue product curve for a factor could decrease as a result of a(n)
Decrease in the demand for the firm's product
Marginal revenue product describes the
Revenue received for the output produced by the last unit of labor employed
If the price of a resource is greater than its marginal revenue product, the firm should
Decrease the units of the resource used in order to increase profits
A technological improvement that causes an increase in the marginal product of a resource will
Increase the demand for the resource
The marginal revenue product of an economic resource for a firm operating in purely competitive product and resource markets
Is the increase in total revenue product resulting from the addition of one more unit of the resource
The labor supply curve for a particular occupation is upsloping because
The labor supply curve for a particular occupation is upsloping because
Wage differentials can arise from
both the demand-side and supply-side of labor markets
f all workers are homogeneous, all jobs are equally attractive to workers, and labor markets are perfectly competitive
all workers would receive the same wage rate
Wage differentials may result from all the following except
he tendency of qualified workers to move from lower pay jobs to higher pay jobs
Suppose all workers are identical, but working for Ajax is more pleasant than working for Acme. In all other nonwage aspects the two firms offer the same job characteristics. We would expect
wage rates at Ajax to be lower than at Acme
Wage differences among a group of workers may persist due to
differences in the innate abilities of workers.
Compensating differences in wages
are wage differences that compensate for differences in the desirability of jobs
Data on education and earnings reveal
a positive relationship between the two