9th Quiz

The idea that the demand for auto workers stems from the demand for automobiles is

• the value of the marginal product of auto workers.

• derived demand.

• indirect demand.

• output demand.

Demand for the lithium ion batteries used in the production of Tesla automobiles is

• perfectly elastic.

• unrelated to their productivity.

• an output demand.

• derived from the demand for Tesla automobiles.

Salaries of NFL quarterbacks, like Tom Brady, are

• too high.

• related to the additional revenues team owners expect to enjoy as a result of having them on the team roster.

• the result of perfectly competitive markets.

• All of the above are correct.

A decrease in the wage rate will change

• only the amount of labor hired.

• the amount of labor employed, and it may also change the amount of other inputs employed.

• the price the firm charges for the product, but it will not affect the demand for any of the inputs.

• the firm's profit-maximizing level output, but not its usage of inputs.

When a large amount of output is produced per unit of the input, the input is said to exhibit

• high productivity.

• low productivity.

• marginal productivity.

• derived productivity.

The demand for ________ is a ʺderived demand.ʺ

• ice cream cones on a hot day

• tax-free municipal bonds

• a hair stylist by a salon owner

• a birthday cake for your brother

The demand for inputs is a derived demand because

• it does not come from competitive markets.

• it depends on the demand for outputs.

• it is derived from nature.

• it is derived from production.

Marginal revenue product

• is calculated as the marginal product of labor divided by the price of output.

• eventually increases as labor input increases.

• measures the benefit to the firm from hiring an additional unit of labor.

• increases when marginal product decreases.

If a pet grooming salon hires an additional groomer, that worker can groom 4 additional pets per day. The average grooming fee is $25. The most the salon would be willing to pay that groomer is

• $4 per day

• $25 per day

• $100 per day

• indeterminate with the given information

The marginal revenue product of labor is

• the additional revenue a firm earns by employing one additional unit of labor.

• the additional profit a firm earns by employing one additional unit of labor.

• the marginal product of capital times the price of labor.

• the additional revenue the firm makes by selling one unit of labor.