Question 1

-In the above table, what is the marginal revenue product of the 4th worker?

Accepted Answer

The answer of 
-In the above table, what is the...

Question 2

If the demand for a monopolist's product increases, its

Accepted Answer

When the demand for a monopolist's product increases, its marginal revenue increases as well. This is because a monopolist has control over the price of its product, and can increase the price as demand goes up. As a result, the profit margin also increases, making it more profitable for the monopolist to hire more workers to increase its production and meet the growing demand.

Question 3

If we assume competitive labor markets, the supply curve of labor when the firm is a monopoly is

Accepted Answer

The answer of If we assume competitive labor markets, the...

Question 4

In a perfectly competitive labor market, the least-cost combination rule for resource use

Accepted Answer

The least-cost combination rule in a perfectly competitive labor market states that firms should hire workers up to the point where the marginal physical product per dollar spent is equal for each type of worker. This ensures that the firm is using the most efficient combination of resources and minimizing costs. Therefore, option B is the correct answer. Options A, C, and D are incorrect, as they do not accurately describe the least-cost combination rule in a competitive labor market.

Question 5

In constructing the monopolist's input demand curve, which of the statements is FALSE?

Accepted Answer

The answer of In constructing the monopolist's input demand curve,...

Question 6

-In the above table, if the marginal factor cost is $48, how many workers would be hired?

Accepted Answer

The number of workers hired is determined by where the marginal revenue product (MRP) equals the marginal factor cost (MFC). If MFC is $48, you hire workers until the MRP is equal to or just above $48.

Question 7

When a firm has monopoly power, it

Accepted Answer

When a firm has monopoly power, it faces a downward sloping demand curve and its marginal revenue curve lies below the demand curve. This means that in order to maximize profits, the firm will produce at a lower level of output and charge a higher price. This leads to a reduction in the quantity of labor demanded, which means the firm hires fewer workers compared to a competitive market. Therefore, the correct choice is A.

Question 8

-Refer to the above table. How many workers will this firm hire if the weekly wage rate is $770?

Accepted Answer

The answer of 
-Refer to the above table. How many...

Question 9

In the employment of any resource, a firm should

Accepted Answer

When a firm is considering hiring additional resources, it should aim to hire input units that will add more to revenue than they add to costs. This is because hiring an input unit that costs more than it contributes to revenue would decrease the firm's profits. In order to determine if an input unit will add more revenue than cost, a firm can equate the marginal revenue product (the additional revenue generated by one more unit of the resource) with the cost of that additional resource. Therefore, both option A and B are correct, and the answer is D. Option C, on the other hand, focuses solely on the physical product of the input unit rather than its contribution to revenue and costs, and is therefore not the best choice.

Question 10

-Refer to the above table. How many worker will this firm hire if the weekly wage rate is $1350?

Accepted Answer

The answer of 
-Refer to the above table. How many...

Question 11

The MRP curve for a monopolist in the product market is

Accepted Answer

A monopolist has market power and faces a downward sloping demand curve. This means that to sell more units of output, the monopolist must lower the price of each unit. As a result, the marginal revenue (MR) curve for the monopolist is below the demand curve and has a steeper slope. The marginal revenue product (MRP) curve for the monopolist is derived from the MR curve and represents the value of the last unit of input (e.g., labor) to the firm. Since the MRP curve is based on the MR curve, it is also downward sloping and to the left and below the MRP curve for a perfectly competitive firm. This is because in a perfectly competitive market, the firm is a price taker and faces a horizontal demand curve, so MR and price are the same. Therefore, the MRP curve for a monopolist is not the same as the MRP curve for a perfectly competitive firm.

Question 12

What does a monopolist's demand curve for labor look like? How does it compare to the market demand curve for a competitive industry? What does the supply curve of labor to a monopolist look like? Explain.

Accepted Answer

The answer of What does a monopolist's demand curve for...

Question 13

-Refer to the above table. How do we know that this is not a competitive firm?

Accepted Answer

In a competitive firm, marginal revenue remains constant as output changes because the firm is a price taker. The fact that marginal revenue changes with output indicates that the firm has some control over its pricing, which is not characteristic of a competitive firm.

Question 14

-In the above table, what is the marginal revenue product of the 2nd worker?

Accepted Answer

The marginal revenue product of the 2nd worker is $99, which is the difference in total revenue between having 1 worker and having 2 workers.

Question 15

-In the above table, what is the marginal revenue product of the 1st worker?

Accepted Answer

The answer of 
-In the above table, what is the...

Question 16

-In the above table, if the marginal factor cost is $20, how many workers would be hired?

Accepted Answer

The answer of 
-In the above table, if the marginal...

Question 17

In an imperfectly competitive labor market, the firm is faced with a(n) ________ MPP curve and a(n) ________ MR curve.

Accepted Answer

In an imperfectly competitive labor market, the firm has some degree of market power and faces a downward-sloping MPP curve because as it hires more workers, the marginal product of each additional worker decreases. The firm also faces a downward-sloping MR curve because it cannot freely set the wage rate and must consider the impact of hiring an additional worker on its total labor costs. Therefore, the best choice is B, with a downward-sloping MPP curve and a downward-sloping MR curve.

Question 18

-Refer to the above table. How many workers will this firm hire if the weekly wage rate is $900?

Accepted Answer

The answer of 
-Refer to the above table. How many...

Question 19

"Other things being equal, the monopolist hires fewer workers than would be hired than a perfectly competitive industry." Do you agree or disagree? Why?

Accepted Answer

The answer of "Other things being equal, the monopolist hires...

Question 20

-In the above table, if the marginal factor cost is $96, how many workers would be hired?

Accepted Answer

The answer of 
-In the above table, if the marginal...

Quiz 28: The Labor Market: Demand, Supply and Outsourcing

-In the above table, what is the marginal revenue product of the 4th worker?

If the demand for a monopolist's product increases, its

If we assume competitive labor markets, the supply curve of labor when the firm is a monopoly is

In a perfectly competitive labor market, the least-cost combination rule for resource use

In constructing the monopolist's input demand curve, which of the statements is FALSE?

-In the above table, if the marginal factor cost is $48, how many workers would be hired?

When a firm has monopoly power, it

-Refer to the above table. How many workers will this firm hire if the weekly wage rate is $770?

In the employment of any resource, a firm should

-Refer to the above table. How many worker will this firm hire if the weekly wage rate is $1350?

The MRP curve for a monopolist in the product market is

What does a monopolist's demand curve for labor look like? How does it compare to the market demand curve for a competitive industry? What does the supply curve of labor to a monopolist look like? Explain.

-Refer to the above table. How do we know that this is not a competitive firm?

-In the above table, what is the marginal revenue product of the 2nd worker?

-In the above table, what is the marginal revenue product of the 1st worker?

-In the above table, if the marginal factor cost is $20, how many workers would be hired?

In an imperfectly competitive labor market, the firm is faced with a(n) MPP curve and a(n) MR curve.

-Refer to the above table. How many workers will this firm hire if the weekly wage rate is $900?

"Other things being equal, the monopolist hires fewer workers than would be hired than a perfectly competitive industry." Do you agree or disagree? Why?

-In the above table, if the marginal factor cost is $96, how many workers would be hired?