AP Micro Unit 5 Flashcard V2

Front

What is the relationship between the MRP curve and the market demand curve?

Back

They both slope downward.

Front

In a perfectly competitive labor market, if a firm is experiencing wages that are less than the MRP, what is the best course of action?

Back

Hire more workers.

Front

In a perfectly competitive labor market the firms are ____________ and in a perfectly competitive product market firms are __________________

Back

wage takers; price takers

Front

The marginal product of the third chef is

Back

6 pizzas

Front

If the price per pizza is $8 and if each chef receives $20 an hour, how many chefs will the owner hire to maximize total profits?

Back

4

Front

Which of the following explains why the marginal revenue product decreases as a firm increases the quantity of an input used?
Diminishing marginal returns, Diminishing marginal utility, The homogeneity of the product, The free mobility of resources, Diminishing marginal revenue from output

Back

Diminishing marginal returns

Front

A competitive firm's demand for labor is determined directly by

Back

the marginal (physical) product of labor and the output price

Front

A profit-maximizing firm will continue to hire workers until the marginal revenue product of labor is equal to the

Back

marginal factor cost

Front

Two workers produce 10 units and three workers produce 14 units. If the MRP of the third worker is $24, what is the price of the product?

Back

$6

Front

The price of a product increases. What happens to the supply of labor OR demand of labor for the firm?

Back

Demand of labor will increase