Question 1

The table shows labor demand data on the left and labor supply data on the right. How many units of output will this profit-maximizing firm produce?

Accepted Answer

The answer of  The table shows labor demand data...

Question 2

Suppose the MRP of a firm's 20th worker is $16 and the worker's marginal wage cost is $22. We can say with the most certainty that the firm

Accepted Answer

The firm will find it profitable to hire fewer workers because the marginal revenue product (MRP) of the 20th worker is less than the marginal wage cost, indicating that the cost of hiring an additional worker exceeds the revenue generated by that worker.

Question 3

A firm operating in a purely competitive labor market has the marginal revenue product schedule shown in the table.  If the wage rate decreases from $22.50 to $21.50, by how much will the firm expand employment?

Accepted Answer

The answer of A firm operating in a purely competitive...

Question 4

A firm can hire 8 workers at a wage rate of $7 per hour but must pay $8 per hour to all of its employees to attract a ninth worker. The marginal wage cost of the ninth worker is

Accepted Answer

The marginal wage cost of the ninth worker includes the $8 per hour for the ninth worker plus an additional $1 per hour for each of the 8 workers already hired (since their wage increases from $7 to $8 to attract the ninth worker), totaling $8 + (8 * $1) = $16.

Question 5

Suppose in some economy there are 100 million workers; 8 million of those workers work in retail trade, and 2 million of the retail workers belong to unions. Total union membership in this economy is 30 million. The rate of unionization in the economy is

Accepted Answer

The rate of unionization in the economy is 30 million / 100 million = 30%. The rate of unionization in retail trade is 2 million / 8 million = 25%.

Question 6

A firm pays the same wage rate to all its workers. At present, 20 workers are employed at $50 per day. Wages are subsequently raised to $55 per day in order to attract an extra worker. Thus, the marginal labor cost per day is

Accepted Answer

The marginal labor cost is the additional cost incurred by hiring one more worker. Initially, the total wage cost for 20 workers is 20 x $50 = $1000. After hiring one more worker at $55, the total wage cost becomes 21 x $55 = $1155. The marginal labor cost is $1155 - $1000 = $155.

Question 7

The table shows labor demand data on the left and labor supply data on the right. How many workers will this profit-maximizing firm choose to employ?

Accepted Answer

The answer of  The table shows labor demand data...

Question 8

A profit-maximizing firm operates in purely competitive product and resource markets, with the resource and production schedules shown in the table.  The product price is $15 per unit and the cost per worker is $540. How many workers will the firm employ?

Accepted Answer

The answer of A profit-maximizing firm operates in purely competitive...

Question 9

The table shows labor demand data on the left and labor supply data on the right. What will be the profit-maximizing selling price of the product?

Accepted Answer

The answer of  The table shows labor demand data...

Question 10

Real wages in the United States are

Accepted Answer

Real wages in the United States are relatively high compared to many countries around the world, reflecting the country's high productivity and standard of living. However, they are not the highest globally, as some other industrially advanced nations have higher real wages due to various economic, social, and policy factors.

Question 11

Real wages in the United States in the long run

Accepted Answer

Real wages in the United States in the long run have increased at about the same rate as increases in output per worker, reflecting productivity growth.

Question 12

Increases in the productivity of labor result partly from

Accepted Answer

Improvements in technology often lead to increases in the productivity of labor by enabling workers to produce more output in the same amount of time or with the same effort.

Question 13

Over the long run, real earnings per worker can increase only at about the same rate as the economy's rate of growth of

Accepted Answer

Real earnings per worker can increase only at about the same rate as the economy's rate of growth of output per worker. This is because improvements in productivity (output per worker) are what enable increases in real wages over the long term.

Question 14

Given the table for a competitive firm that is maximizing profits, if the marginal revenue product of the last worker hired is $300 and three workers are employed per day, the price of a unit of output must be

Accepted Answer

The answer of Given the table for a competitive firm...

Question 15

Suppose in some economy there are 100 million workers; 10 million of those workers work in retail trade, and 1 million of the retail workers belong to unions. Total union membership in this economy is 40 million. The rate of unionization in retail trade is

Accepted Answer

The rate of unionization in retail trade is calculated by dividing the number of unionized retail workers by the total number of retail workers, which is 1 million divided by 10 million, resulting in 10 percent.

Question 16

The table shows labor demand data on the left and labor supply data on the right. We can conclude that

Accepted Answer

The answer of  The table shows labor demand data...

Question 17

The long-run trend of real wages

Accepted Answer

Real wages have generally shown an upward trend over the long term, reflecting increases in productivity and economic growth that have outpaced inflation.

Question 18

If the nominal wages of carpenters rose by 5 percent in 2019 and the price level decreased by 3 percent, then the real wages of carpenters

Accepted Answer

Real wages adjust for inflation, showing the purchasing power of earnings. A 5% nominal wage increase combined with a 3% decrease in the price level effectively boosts real wages by 8%, as workers can buy more with their earnings.

Question 19

The table shows labor demand data on the left and labor supply data on the right. What will be the profit-maximizing wage rate?

Accepted Answer

The answer of  The table shows labor demand data...

Question 20

If the nominal wages of carpenters rose by 5 percent in 2019 and the price level increased by 3 percent, then the real wages of carpenters

Accepted Answer

Real wages adjust for inflation, showing the purchasing power of income. A 5% nominal wage increase minus a 3% price level increase equals a 2% real wage increase.

Quiz 17: Wage Determination

The table shows labor demand data on the left and labor supply data on the right. How many units of output will this profit-maximizing firm produce?

Suppose the MRP of a firm's 20th worker is $16 and the worker's marginal wage cost is $22. We can say with the most certainty that the firm

A firm operating in a purely competitive labor market has the marginal revenue product schedule shown in the table. If the wage rate decreases from $22.50 to $21.50, by how much will the firm expand employment?

A firm can hire 8 workers at a wage rate of $7 per hour but must pay $8 per hour to all of its employees to attract a ninth worker. The marginal wage cost of the ninth worker is

Suppose in some economy there are 100 million workers; 8 million of those workers work in retail trade, and 2 million of the retail workers belong to unions. Total union membership in this economy is 30 million. The rate of unionization in the economy is

A firm pays the same wage rate to all its workers. At present, 20 workers are employed at $50 per day. Wages are subsequently raised to $55 per day in order to attract an extra worker. Thus, the marginal labor cost per day is

The table shows labor demand data on the left and labor supply data on the right. How many workers will this profit-maximizing firm choose to employ?

A profit-maximizing firm operates in purely competitive product and resource markets, with the resource and production schedules shown in the table. The product price is $15 per unit and the cost per worker is $540. How many workers will the firm employ?

The table shows labor demand data on the left and labor supply data on the right. What will be the profit-maximizing selling price of the product?

Real wages in the United States are

Real wages in the United States in the long run

Increases in the productivity of labor result partly from

Over the long run, real earnings per worker can increase only at about the same rate as the economy's rate of growth of

Given the table for a competitive firm that is maximizing profits, if the marginal revenue product of the last worker hired is $300 and three workers are employed per day, the price of a unit of output must be

Suppose in some economy there are 100 million workers; 10 million of those workers work in retail trade, and 1 million of the retail workers belong to unions. Total union membership in this economy is 40 million. The rate of unionization in retail trade is

The table shows labor demand data on the left and labor supply data on the right. We can conclude that

The long-run trend of real wages

If the nominal wages of carpenters rose by 5 percent in 2019 and the price level decreased by 3 percent, then the real wages of carpenters

The table shows labor demand data on the left and labor supply data on the right. What will be the profit-maximizing wage rate?

If the nominal wages of carpenters rose by 5 percent in 2019 and the price level increased by 3 percent, then the real wages of carpenters