Microeconomics Tutorial

1)   The value of marginal product is calculated by multiplying the                by the                 .

• marginal product; price of the product

• quantity of labor; wage rate

•                                                                   total product; wage rate

   

• total product; wage rate

1)   A profit-maximizing firm hires labor up to the point where

• factor's price; average factor price

• factor's price; value of marginal product

• factor's output; average factor output

• factor's output; value of marginal product

1)   A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $45. Which of the following is correct?

• Too much labor is currently employed and the firm will lay off some workers.

• The firm should shut down and produce nothing.

• The firm is employing the profit-maximizing quantity of labor.

• Too few workers are currently employed and the firm will hire more workers.

A firm's demand for labor curve is also

• its value of marginal product curve.

• the supply of labor curve.

• the demand curve for the good it produces.        

• its marginal cost curve.

For a firm selling its product in a competitive market, what causes the demand curve for any factor of production to be downward sloping?

• diminishing marginal product as more of the factor is used

• more demand for greater quantities

• falling product price necessary to sell a larger output

• None of the above answers are correct.

If the price of a firm's product falls, the firm's demand for labor curve

• shifts leftward.

• does not shift and there is no movement along it.

• does not shift but there is a movement along it.

• shifts rightward.

If the wage rate increases, a firm's demand for labor curve

• shifts leftward.

• does not shift and there is no movement along it.

• shifts rightward.

• does not shift but there is a movement

An increase in the price of the firm's output leads to a

• movement upward along the demand for labor curve.

• rightward shift of the demand for labor curve.

• movement downward along the demand for labor curve.

• leftward shift of the demand for labor curve.

Malaysia can use all its resources to produce 50 videos or 250 shoes. The opportunity cost of producing a video is

• RM 0.20

• RM 5

• 5 Shoes

• 1/5 of a shoe.

According to the graph on the right, the equilibrium price in the market before the tax is imposed is

• $3.50

• $5.00

• $6.00

• $8.00