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WorksheetsEcon Friday
Total questions: 24
Worksheet time: 16mins
Which of the following is a firm’s demand for labor?
the firm’s marginal factor cost (MFC) curve
the firm’s long-run average total cost (LRATC) curve
the firm’s marginal revenue product of labor (MRPL) curve
the firm’s marginal revenue (MR) curve
The graph shows the conditions that a monopsonist faces in a labor market. How many workers would this monopsonist hire and what wage rate would it pay, respectively?
8 workers, $18 wage rate
10 workers, $20 wage rate
12 workers, $22 wage rate
15 workers, $25 wage rate
A profit-maximizing firm will continue to hire workers until the marginal revenue product of labor is equal to the:
marginal factor cost
average total cost
marginal utility of labor
total revenue
Which of the following best describes a monopsony market?
many buyers, many sellers
many buyers, a few sellers
a few buyers, many sellers
one buyer, many sellers
What area represents deadweight loss in this monopsony labor market? Options: wazQ10, vzy, vxy, wbvxwd, wbvQ10
wazQ10
vzy
vxy
wbvxwd
A monopsony pays _____ & hires ____ than a perfectly competitive firm.
more & more
less & less
equal & equal
more & less
The table gives output, marginal product, and average product of a firm producing novelty T-shirts using different numbers of workers. The firm produces t-shirts in a perfectly competitive market where the price of a t-shirt is $10. What is the marginal revenue product of labor (MRPL) of the fourth worker?
$500
$700
$450
$800
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
2 workers
3 workers
4 workers
5 workers
What is the impact of a minimum wage on a competitive labor market?
Decreases unemployment
Increases wages without affecting employment
No impact on unemployment
Increases unemployment
How does an increase in the price of a substitute good affect the demand for a product?
The demand for the product will become elastic.
The demand for the product will increase.
The demand for the product will remain unchanged.
The demand for the product will decrease.
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 left.
The supply curve for labor will shift to the right.
The demand curve for labor will shift to the left.
What 2 P things increase demand for workers?
Increase in productivity of workers
Increase in the Wages of Workers
Increase in Price of the Product Produced
Decrease in Demand for the product produced
What is MRC?
Marginal Revenue Cost
Marginal Resource Counting
Marginal Resource Cost
Mad, Risky, Customers
The two types of factor markets are
Monopoly
Oligopoly
Monopolistic Competition
Perfect Competition & Monopsony
An condition for a monopsony to be effective is:
they are the only place to work
the workers have the same skills
the workforce is immobile
it is unionized
Which of the following explains why the marginal factor (resource) cost curve lies above the supply curve for labor in a monopsonistic labor market?
The monopsonist must lower its price to sell more output.
Each worker is paid a different wage, based on individual marginal productivity.
The monopsonist has market power and pays whatever wage it desires.
The supply of labor is perfectly elastic.
Which of the following explains why the marginal factor (resource) cost curve lies above the supply curve for labor in a monopsonistic labor market?
The monopsonist must increase the wage for all workers to hire more workers
The monopsonist must lower its price to sell more output
The supply of labor is perfectly elastic
What happens to the number of workers hired when the wage falls?
It increases
It fluctuates unpredictably
It remains the same
It decreases
In a perfectly competitive factor market, firms are considered as what?
Monopsonists
Monopolists
Wage takers
Price setters
The formula for calculating MRP is
Price x Revenue
Price x marginal product
Marginal produce / wage
MRC x price
In perfectly competitive labor markets, the relationship between wage and MRC is
MRC < Wage
MRC > Wage
MRC is unrelated to wage
MRC = Wage
A firm employs 4 workers and produces 360 units of output. Its selling price is $4. When it hires a 5th worker, its total output rises to 400. The MRP of the 5th worker is
$4
$60
$160
$400
$0
