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Exam 10: Input Demand: The Labor and Land Markets

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Question 61

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Assuming labor is the only variable factor of production, production of a good will not occur

A) as long as the marginal revenue product of labor is positive.
B) if society values a good less than it costs firms to hire the workers to produce the good.
C) as long as the productʹs price is less than the marginal revenue product of labor.
D) if the marginal cost of a unit of output equals the marginal revenue product of labor.

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Question 62

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A competitive firm will use a factor of production as long as its marginal revenue product exceeds its unit cost.

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Question 63

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If the individual labor supply curves for all workers in a given location slope up, the market supply curves in that location

Pookie's Pool Cleaning Service uses only one variable input, chlorine. Pookieʹs ________ curve for chlorine in the short run is the inputʹs marginal revenue product curve.

The return to any factor of production that is in ________ is pure rent.

Assuming that labor is the only variable input, if society values a good ________ it costs firms to hire the workers to produce that good, the good ________ be produced.

A decrease in the wage rate will change

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

If the wage rate is greater than the marginal revenue product of labor, the firm should ________ to maximize profits.

Related to the Economics in Practice on page 215: A study discussed in the Economics in Practice found that NFL teams that trade two lower draft picks for one higher pick tend to ________ player productivity and therefore ________ for that pick in terms of the draft-pick trade.

Refer to the information provided in Figure 10.2 below to answer the question(s) that follow. Figure 10.2 -Refer to Figure 10.2. This firm's marginal cost curve has shifted from MC₀ to MC₁. A profit-maximizing firm should ________ the amount of output produced and ________ its demand for labor.

A decrease in the productivity of a factor of production will

Bonita's Braidworks hires workers to braid hair. The store sells the service for $25 per customer. The marginal revenue product of this storeʹs fifth worker is $50. The marginal product of the fifth worker is

Assume that labor is the only variable input and that the payment made to labor is denoted as W. The marginal product of labor can be stated as

The formula (MP_L) (MR_X) , where L is for labor and X is the output, is for

Refer to the information provided in Figure 10.1 below to answer the question(s) that follow. Figure 10.1 -Refer to Figure 10.1. This firm is currently hiring 16 workers and paying a wage of $10. This firm should

If the price of the product produced by labor decreases, the marginal revenue product of labor curve will

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

Refer to the data provided in Table 10.1 below to answer the following question(s) . Table 10.1 -Refer to Table 10.1. If the payment to labor per day is $100, this T-shirt manufacturer is maximizing profits if he will hire ________ employee(s) .

Assume that labor is the only variable input and that the payment made to labor is denoted as W. The ________ can be stated as W/MC.