The diagram below shows the MRP curve for a firm producing copper plumbing pipe.The factor of production being considered here is hours of labour.
FIGURE 13-1
-Refer to Figure 13-1.Suppose this firm initially has the marginal revenue product curve MRP1.One reason that the curve could shift to MRP2 is
A)a decrease in demand for the firmʹs output,copper plumbing pipe.
B)an increase in the supply of labour.
C)a decrease in the wage rate.
D)a decrease in the market price of copper plumbing pipe.
E)an improvement in workersʹ human capital.

Question

The diagram below shows the MRP curve for a firm producing copper plumbing pipe.The factor of production being considered here is hours of labour.
  FIGURE 13-1
-Refer to Figure 13-1.Suppose this firm initially has the marginal revenue product curve MRP1.One reason that the curve could shift to MRP2 is
A)a decrease in demand for the firmʹs output,copper plumbing pipe. 
B)an increase in the supply of labour. 
C)a decrease in the wage rate. 
D)a decrease in the market price of copper plumbing pipe. 
E)an improvement in workersʹ human capital.

Quizplus · Accepted Answer

An improvement in workers' human capital can increase their productivity, shifting the marginal revenue product curve to the right from MRP1 to MRP2.

The Diagram Below Shows the MRP Curve for a Firm