AP Microeconomics Unit 4 Factor Market

Derived demand refers to:

• The demand for resources used to make a good or service.
• The supply of resources used to make a good or service.
• The demand for a product produced with specific resources.
• The supply of a product produced with specific resources.

Marginal Revenue Product is the:

• change in total revenue that results from the production of an additional good or service.
• change in total revenue that results from the employment of an additional resource. 
• change in total cost that results from the production of an additional good or service.
• change in total cost that results from the employment of an additional resource.

According to the table, this firm should hire 3 workers.  Why is that true?

• MRP>MRC
• MP>MP
• MRP=MRC
• TP is positive

The graph shows a(n):

• oligopsony
• monopoly
• monopsony
• perfectly competitive factor market and firm

Why is MRC not equal to Supply in a Monopsony?

• The firm must raise prices to sell more of the product.
• The firm must raise the wage to employ more workers.
• The firm must lower the wage to employ more workers.
• The firm must lower prices to sell more of the product.

Why must MP and MRP eventually fall?

• Law of Diminishing Marginal Returns
• Law of Diminishing Marginal Utility
• Law of Increasing Marginal Costs
• Law of Diminishing Total Returns

The MRP of the last worker is $100 and his wage is $50 and the MRP of the last machine employed is $500.  If this firm is profit maximizing, then the rent for the machine is:

• $100
• $150
• $200
• $250

The MP of the last worker hired is 100 and his wage is $20 and the rent of the last machine hired is $100.  If this firm is using the Least-Cost Rule, the MP of the last machine is:

• 200
• 400
• 500
• 750

Which of the following would NOT INCREASE the demand for a resource:

• Increase in demand for the product produced with that resource.
• Increase in productivity of the resource.
• Increase in the price of a substitute resource.
• Increase in the price of a complementary resource.

Why does Clayton Kershaw make so much money?

• Americans love baseball and very few people can pitch like him.
• Americans love baseball and many people can pitch like him.
• Americans prefer soccer and very people can pitch like him.
• Americans prefer soccer and many people can pitch like him.