WorksheetsECON Labor Market
Total questions: 14
Worksheet time: 9mins
Which of the following is not an example of a derived demand?
As advancements in medical technology increase the safety and success of laser eye surgery, the demand for opticians has decreased.
Millicent Manning, the owner of a furniture store, is concerned that her sales have fallen for the past six months. She attributes this to the downturn in the real estate market.
Several of the animated films released between 1999 and 2001 failed to earn a profit, which caused some companies to stop making these films, thereby decreasing the demand for animators.
Seth Bullock, a personal-injury attorney, complains that he is earning far less now than a few years ago largely because personal injury cases have been undercut by state laws limiting class-action suits and payouts on damages.
The demand for labor is described as a derived demand because
it is derived by workers seeking to earn income to fund the consumption of goods and services.
it is derived from government institutions which rely on labor markets for the purpose of raising tax revenue.
it is derived by producers seeking to make profits by starting new businesses.
it is derived from the demand for products that use labor in the production process.
Suppose you have worked at a local sandwich shop for six months and now you plan to ask your manager for a raise. How can you convince your manager that you are worth more money than you are currently being paid?
by showing your manager that your marginal revenue product has increased since your last wage increase
by threatening to quit if he refuses to give you a raise
by explaining to him how difficult it is for you to save enough money to go to college
by convincing him that you are a dedicated worker and ready to take on more responsibilities at the shop
Marginal revenue product for a perfectly competitive seller is equal to
the output price multiplied by the number workers hired.
the marginal cost of production.
the output price multiplied by the total product of labor.
the change in total revenue that results from hiring another worker.
What is the difference between labor's marginal product and marginal revenue product?
Labor's marginal product is a measure of labor's productivity while labor's marginal revenue product is a measure of labor's ability to sell the firm's products.
The marginal product of labor is the increase in output as a result of hiring an additional worker while the marginal revenue product of labor is the increase in profit as a result of hiring an additional worker.
The marginal product of labor is the additional labor's contribution to the firm's total output while the marginal revenue product is the additional labor's contribution to the firm's total sales revenue.
The marginal revenue product of labor is the dollar value of hiring an additional worker while the marginal product of labor is the increase in the firm's physical output as a result of hiring an additional worker.
What is the difference between a firm's marginal revenue and its marginal revenue product?
Marginal revenue is the increase in revenue when a firm raises its output price while marginal revenue product is the increase in marginal product when a firm hires an additional worker.
Marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the change in total revenue from hiring one more worker.
There is no difference between the two terms.
Marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the profit earned from hiring one more worker.
Firms use information on labor's marginal revenue product to determine
how much to produce at each output price.
how much labor services to supply at each wage rate.
how much marginal product to produce at each wage rate.
how many workers to hire at each wage rate.
A firm's primary interest when it hires an additional worker is
the extra revenue the firm realizes from hiring that worker.
whether or not the new worker gets along with the firm's existing workers.
the cost of hiring the additional worker.
how the average output of the firm will be affected by this new worker.
The firm's gain in profit from hiring another worker is
the extra output of the extra worker.
the difference between marginal revenue product and the wage of the worker.
the marginal revenue product of the extra worker.
the reduction in costs from hiring another worker.
The term "derived demand" refers to
a demand curve that derives from the availability of resources.
the demand for a factor of production that is derived from the demand for the good the factor produces.
a firm's estimated demand curve derived from sales data.
the demand for financial products called derivatives.
As more output is produced, the marginal product of labor declines
because the firm's marginal revenue declines.
if firms reduce the wage paid to labor.
because of the law of diminishing returns.
if the firm's output supply curve is inelastic
The marginal revenue product of labor is defined as
the change in the firm's revenue as a result of hiring one more worker.
the change in the firm's revenue as a result of selling one more unit of output.
the change in the firm's output as a result of hiring one more worker.
the change in the firm's profit as a result of hiring one more worker.
If MPL is 20 and the price of the good is $3 what is the MRPL?
$20
$60
$10
$3
Refer to Figure 16-1. If the wage rate is $40, how many workers should Dale hire?
6
5
4
3
