Labor Markets

26 terms by dance630

Log in to add this set to a folder.

Log in to add this set to a class.

Like this study set? Create a free account to save it.

Sign up for an account

Already have a Quizlet account? .

Create an account

Advertisement Upgrade to remove ads

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


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


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

Please allow access to your computer’s microphone to use Voice Recording.

Having trouble? Click here for help.

We can’t access your microphone!

Click the icon above to update your browser permissions above and try again


Reload the page to try again!


Press Cmd-0 to reset your zoom

Press Ctrl-0 to reset your zoom

It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.

Please upgrade Flash or install Chrome
to use Voice Recording.

For more help, see our troubleshooting page.

Your microphone is muted

For help fixing this issue, see this FAQ.

Star this term

You can study starred terms together

NEW! Voice Recording

Create Study Set