AP Microeconomics Unit 5

What is the rule to profit maximize when hiring workers?

• MR = MC

• MRC = MRS

• MRP = MRC

• S = D

What is the shape of the Supply curve for workers in a p.C. Firm?

• horizontal

• perfectly horizontal

• Vertical

• Downward sloping

What is MRC?

• Marginal Revenue Cost

• Marginal Resource Counting

• Marginal Resource Cost

• Mad, Risky, Customers

Factor Markets designate

• productivity

• input

• price

• output

Factor Markets determine how (please pick 2)

• Many items to produce

• many workers to hire

• Wage to be paid

• Price to charge for products

The two types of factor markets are

• Monopoly

• Oligopoly

• Monopolistic Competition

• Perfect Competition & Monopsony

A monopsony pays _____ & hires ____ than a P.C. Firm

• much more & tons of workers

• more & more

• less & less

• the same & fewer

In a perfectly competitive labor market, an increase in an effective minimum wage will result in:

• an increase in the supply of workers 
• a decrease in the supply of workers 
• a decrease in the demand for workers 
• fewer workers being hired 

The table shows the production function of an auto parts manufacturer. Assume that the firm can hire as many workers as it wants at the market wage rate of $600 per week per worker and sell as many auto parts as it wants at the price of $10 per part. To maximize profits, the firm should hire: 

• 1 worker
• 3 workers
• 5 workers
• 7 workers

Assume that firms sell their output in a perfectly competitive product market and hire labor in a perfectly competitive labor market. If all other factors remain constant, an increase in the demand for the firms’ product will result in which of the following changes in the labor market? 

• The demand curve for labor will shift to the right. 
• The supply curve for labor will shift to the right. 
• The supply curve for labor will shift to the left. 
• The demand curve for labor will shift to the left.