Question 1

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.If the price of a power cord is $2 and the market wage rate is $20 per hour, the profit-maximizing quantity of labor is __ workers.

Accepted Answer

From the graph, we can see that the profit-maximizing quantity of labor is where the value of the marginal product of labor (VMPL) equals the market wage rate. At $2 price of a power cord and $20 market wage rate, VMPL equals $2. Therefore, the profit-maximizing quantity of labor is where the VMPL curve intersects the horizontal line at $2, which occurs at 6 workers.

Question 2

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.If the price of a power cord is $2 and the market wage rate is $100 per hour, the profit-maximizing quantity of labor is __ workers.

Accepted Answer

The answer of (Table: Value of the Marginal Product of...

Question 3

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.If the price of a power cord is $2 and the market wage rate is $60 per hour, the profit-maximizing quantity of labor is __ workers.

Accepted Answer

The profit-maximizing quantity of labor is where the value of the marginal product of labor (VMPL) is equal to the wage rate. At a wage rate of $60, this occurs at 4 workers. At any quantity of workers above 4, the VMPL is less than the wage rate and it is not profitable to hire additional workers. Therefore, the profit-maximizing quantity of labor is 4 workers.

Question 4

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.If the price of a power cord is $4 and the market wage rate is $120 per hour, the profit-maximizing quantity of labor is __ workers.

Accepted Answer

The answer of  (Table: Value of the Marginal Product...

Question 5

Figure: The Value of the Marginal Product Curve
(Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, if the market wage rate increases:

Accepted Answer

When the market wage rate increases, the value of the marginal product of labor (VMPL) curve does not shift. Instead, the marginal product of labor (MPL) decreases due to the law of diminishing marginal returns. As a result, the profit-maximizing quantity of labor decreases because the additional output produced by an additional unit of labor is now worth less than before, making it less profitable to hire more labor. Therefore, the correct choice is D.

Question 6

(Table: Workers and Corn Output) Laura is a price-taking farmer who produces corn.The table Workers and Corn Output shows her production function.Suppose Laura acquires more land and as a result the output that can be produced by any given number of workers doubles.If the wage is $130 and the price per bushel of corn is $10, Laura should hire workers to maximize
Profits.

Accepted Answer

The answer of   (Table: Workers and Corn Output)...

Question 7

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.If the price of a power cord is $4 and the market wage rate is $80 per hour, the profit-maximizing quantity of labor is __ worker(s).

Accepted Answer

The profit-maximizing quantity of labor is where the value of the marginal product of labor (VMPL) equals the wage rate. At a wage rate of $80, the VMPL is highest at 5 workers and then starts to decrease. Therefore, hiring 5 workers would be the optimal choice to maximize profits.

Question 8

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.If the price of a power cord is $2 and the wage rate is $90 per hour, the profit- maximizing quantity of labor is workers.

Accepted Answer

The answer of (Table: Value of the Marginal Product of...

Question 9

(Table: Employment and Output) In the table Employment and Output, if the price of a bushel of wheat is $10 and the price of labor (wage) is $120, then the profit-maximizing quantity of labor is:

Accepted Answer

The profit-maximizing quantity of labor is where Marginal Revenue Product (MRP) of labor equals the wage rate. From the table, we can see that at four units of labor, MRP is $480 ($140 + $120 + $110 + $110) and the wage rate is $120. Thus, the profit-maximizing quantity of labor is four.

Question 10

Figure: The Value of the Marginal Product Curve    (Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, if a technological advance makes labor more productive and everything else stays the same, then the profit-maximizing quantity of labor:

Accepted Answer

A technological advance that increases labor productivity will shift the value of the marginal product curve upward. At the profit-maximizing quantity of labor, the wage rate will be equal to the value of the marginal product. Since the value of the marginal product has increased, the wage rate that maximizes profit will also increase. This means that the profit-maximizing quantity of labor will increase.

Question 11

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.The price of a power cord is $2, the market wage rate is $40 per hour, and four workers are hired.Profit can be maximized by hiring worker(s).

Accepted Answer

The profit can be maximized by hiring one more worker because the value of the marginal product of labor is still greater than the wage rate when the fourth worker is hired. Hiring more than one worker will result in a decrease in the value of the marginal product of labor, leading to a decrease in profit.

Question 12

Figure: The Value of the Marginal Product Curve
(Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, the VMPL curve will shift to the right if:

Accepted Answer

A shift to the right of the VMPL curve indicates an increase in the marginal product of labor. A technological advance would increase the productivity of labor and therefore increase the marginal product, causing the curve to shift to the right. An increase in the wage rate (option A), a decrease in the price of the good (option C), or a decrease in the wage rate (option D) would not directly affect the marginal product of labor and therefore would not shift the VMPL curve.

Question 13

(Table: Employment and Output) In the table Employment and Output, if the price of a bushel of wheat is $10, then the value of the marginal product of the fifth worker is:

Accepted Answer

The answer of (Table: Employment and Output) In the table...

Question 14

(Table: Employment and Output) In the table Employment and Output, if the price of a bushel of wheat is $5 and the price of labor (wage) is $40, then the profit-maximizing quantity of labor is:

Accepted Answer

The profit-maximizing quantity of labor is found where the marginal revenue product of labor (MRP) equals the wage rate. From the table, the MRP of the 6th unit of labor is $240, which is equal to the wage rate of $40. Therefore, the profit-maximizing quantity of labor is 6. To determine the profit-maximizing quantity of labor, we need to calculate the marginal product of labor (MPL) at each level of employment and compare it to the wage rate. We can see that MPL first increases, reaches a maximum at employment level 6, and then decreases. At employment levels below 6, MPL is greater than the wage rate, indicating that hiring more workers would increase profits. However, at employment levels above 6, MPL is less than the wage rate, meaning that each additional worker hired would decrease profits. Therefore, the profit-maximizing quantity of labor is 6.

Question 15

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.If the price of a power cord is $2, the value of the marginal product for the fifth worker is:

Accepted Answer

The value of the marginal product of the fifth worker is equal to the additional revenue generated by hiring that worker, which can be found by the change in total product between the fourth and fifth worker multiplied by the price of the power cord. From the graph, the change in total product between the fourth and fifth worker is 10 units of output, and the price of a power cord is $2. Therefore, the value of the marginal product of the fifth worker is $2 * 10 = $40.

Question 16

(Table: Employment and Output) In the table Employment and Output, if the price of a bushel of wheat is $10, then the value of the marginal product of the third worker is:

Accepted Answer

The answer of (Table: Employment and Output) In the table...

Question 17

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.The price of a power cord is $2, the market wage rate is $40 per hour, and eight workers are hired.Profit can be maximized by hiring worker(s).

Accepted Answer

The answer of (Table: Value of the Marginal Product of...

Question 18

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.The price of a power cord is $2, the market wage rate is $20 per hour, and eight workers are hired.Profit can be maximized by hiring worker(s).

Accepted Answer

The answer of  (Table: Value of the Marginal Product...

Question 19

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.If the price of a power cord is $2, the value of the marginal product for the third worker is:

Accepted Answer

The answer of   (Table: Value of the Marginal...

Question 20

Figure: The Value of the Marginal Product Curve
(Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, if the price of the good increases and everything else stays the same, then the profit- maximizing quantity of labor:

Accepted Answer

If the price of the good increases and everything else stays the same, then the value of the marginal product increases at each level of labor input. This will lead to an increase in the profit-maximizing quantity of labor. Therefore, the answer is A.

Quiz 19: Factor Markets and the Distribution of Income

Figure: The Value of the Marginal Product Curve (Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, if the market wage rate increases:

(Table: Employment and Output) In the table Employment and Output, if the price of a bushel of wheat is $10 and the price of labor (wage) is $120, then the profit-maximizing quantity of labor is:

Figure: The Value of the Marginal Product Curve (Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, if a technological advance makes labor more productive and everything else stays the same, then the profit-maximizing quantity of labor:

Figure: The Value of the Marginal Product Curve (Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, the VMPL curve will shift to the right if:

(Table: Employment and Output) In the table Employment and Output, if the price of a bushel of wheat is $10, then the value of the marginal product of the fifth worker is:

(Table: Employment and Output) In the table Employment and Output, if the price of a bushel of wheat is $5 and the price of labor (wage) is $40, then the profit-maximizing quantity of labor is:

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.If the price of a power cord is $2, the value of the marginal product for the fifth worker is:

(Table: Employment and Output) In the table Employment and Output, if the price of a bushel of wheat is $10, then the value of the marginal product of the third worker is:

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.If the price of a power cord is $2, the value of the marginal product for the third worker is:

Figure: The Value of the Marginal Product Curve (Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, if the price of the good increases and everything else stays the same, then the profit- maximizing quantity of labor: