AP Microeconomics: Unit 5 Review

Front

A firm’s demand curve for labor is equal to a segment of its

Back

marginal revenue product curve

Front

The graph above shows the marginal revenue product curve and supply curve of labor for a firm. The introduction of new management techniques dramatically increases workers productivity. Which of the following changes is most likely to occur?

Back

The marginal revenue product curve will shift to the right, increasing wage rate.

Front

Which of the following is most likely to shift the demand for aircraft mechanics to the right? An increase in the demand for air travel, An increase in the price of a license necessary for aircraft mechanics, A decrease in the price of a license necessary for aircraft mechanics, A decrease in the demand for air travel, A decrease in the marginal productivity of aircraft mechanics

Back

An increase in the demand for air travel

Front

A profit-maximizing firm will hire labor until its wage rate equals its:

Back

marginal revenue product

Front

What is the least-cost combination of capital and labor needed to produce a given level of output? Options: MPL /PL = MPK /PK, MPL /PL > MPK /PK, MPL /PK = MPK /PL, (MPL)PL = (MPK)PK, MPL = MPK

Back

MPL /PL = MPK /PK

Front

Marginal revenue product is defined as the

Back

change in total revenue that occurs when one additional unit of an input is employed

Front

For a firm hiring labor in a perfectly competitive labor market, the marginal revenue product curve slopes downward after some point because as more of a factor is employed, which of the following declines? Marginal product, Marginal factor cost, Marginal cost, Total output, Wage rates

Back

Marginal product

Front

If the marginal revenue product of labor is greater than the wage rate, what should a firm do?

Back

The firm should employ more workers.

Front

To minimize costs, the firm should: hire more workers and rent more computers because the marginal revenue products of both workers and computers are greater than their respective prices. , hire more workers and reduce the number of computers rented because workers are cheaper than computers , lay off workers and rent more computers because computers produce more output per dollar of additional expenditure , lay off workers and rent more computers because computers produce more output , keep the same number of workers and computers because the marginal revenue products of both workers and computers are positive

Back

lay off workers and rent more computers because computers produce more output per dollar of additional expenditure

Front

An increase in the demand for automobiles will cause the demand for skilled automobile workers and the wage rate of skilled automobile workers to change in which of the following ways?

Back

Demand - Increase; Wage Rate - Increase