Most labor economists believe that many adult males are on a vertical section of their labor supply curves. Use the concepts of income and substitution effects to explain under what circumstances an individual’s labor supply curve would be vertical.

The market supply of labor depends on the:

a) Number of employers.

b) Marginal revenue product of labor.

c) Price of the product being produced.

d) Number of available workers.

How do you isolate a variable?

Explain how to isolate a variable in an equation.

"Typically, as a firm hires additional workers, what happens to the marginal product of labour and the marginal revenue product?

a.The marginal product of labour and the marginal revenue product both decrease.

b.The marginal product of labour decreases and the marginal revenue product stays constant.

c. The marginal product of labour stays constant and the marginal revenue product decreases.

d. The marginal product of labour decreases and the marginal revenue product increases."

What does it mean for one variable to be dependent on another variable ?

Economists use the term _____ to refer to one nation's currency rising in value in comparison to another country's currency.

The marginal social benefit curve for a public good is the a. horizontal sum of the marginal private benefit curves of all consumers. b. vertical sum of the marginal private benefit curves of all consumers. c. horizontal sum of the marginal external benefit curves of all consumers. d. vertical sum of the marginal external benefit curves of all consumers. e. demand curve of the consumer who values the public good the most.

If firms are competitive and profit-maximizing, the demand curve for labor is determined by a. the opportunity cost of workers' time. b. the value of the marginal product of labor. c. the value of the marginal product of capital. d. the ratio of the marginal product of labor to the marginal product of capital.

Given the information in the following table, fill in the value of the marginal product of labor for price $P=4$. Find the perfectly competitive firm's optimal labor demand for a wage $w=\$ 4 / \mathrm{hr}$.

$$\begin{array}{|rcc|} \hline L & MP & VMP \\ \hline 0 & 4 & \\ 10 & 3 & \\ 20 & 2 & \\ 30 & 1 & \\ 40 & 0 \\ \hline \end{array}$$

The local market for unskilled labor is currently in equilibrium at a wage of $8 per hour and employment of 1,000 workers. What will happen in this market if there is increased immigration to the area?

a) The demand for labor will increase, and wages and employment will rise.

b) The supply of labor will increase, wages will fall, and employment will rise.

c) The demand for labor will decrease, and wages and employment will fall.

d) The supply of labor will decrease, wages will rise, and employment will fall.

e) Both supply and demand will shift, and thus the effect on wages cannot be determined.

Consider an economy with two labor markets—one for manufacturing workers and one for service workers. Suppose initially that neither is unionized. a. If manufacturing workers formed a union, what impact would you predict on the wages and employment in manufacturing? b. How would these changes in the manufacturing labor market affect the supply of labor in the market for service workers? What would happen to the equilibrium wage and employment in this labor market?

A price ceiling will be binding only if it is set:

a. equal to the equilibrium price.

b. below the equilibrium price.

c. above the equilibrium price.

d. either above or below the equilibrium price.

To minimize the cost of producing a given quantity of output, a firm should

a. equate the marginal product of capital per dollar spent on capital and the marginal product of labor per dollar spent on labor. b. equate the total amount spent on labor and the total amount spent on capital. c. make the marginal revenue product of capital per dollar spent on capital greater than the marginal revenue product of labor per dollar spent on labor. d. equate the marginal revenue product of capital and the marginal revenue product of labor. e. hire mostly the factor of production that has the lowest cost per unit of the factor.