Question 1

As more workers are hired by a firm and diminishing returns set in, the dollar value of each additional worker's productivity:

Accepted Answer

When diminishing returns set in, the productivity of each additional worker decreases, meaning the dollar value of their productivity also decreases. This is a fundamental concept in economics related to the law of diminishing returns.

Question 2

In markets other than those that are purely competitive, the value of additional production by labor:

Accepted Answer

In markets that are not purely competitive, such as monopolistic or oligopolistic markets, the value of additional production by labor tends to fall because the firm must lower the price to sell the additional output. This is due to the downward-sloping demand curve these firms face, where price must be reduced to increase sales.

Question 3

Marginal revenue product is:

Accepted Answer

Marginal revenue product (MRP) is defined as the change in total revenue that results from the sale of the output produced by the addition of one more unit of a variable input. It measures the additional revenue generated from using one more unit of input.

Question 4

The marginal revenue product of labor determines how many:

Accepted Answer

The marginal revenue product of labor is the additional revenue a firm earns by employing one more unit of labor, and it directly influences the decision on how many workers to hire.

Question 5

-What is the marginal product of the third worker?

Accepted Answer

The marginal product of the third worker is the additional output produced when the third worker is hired. Without specific data, it's assumed to be 300 units based on the given options.

Question 6

-What is the marginal revenue product of the third worker if the firm can sell whatever it produces at $5.00 each?

Accepted Answer

The marginal revenue product (MRP) is calculated by multiplying the marginal product of labor (additional output from hiring one more worker) by the price at which the firm can sell the product. If the third worker's marginal product is 300 units, then MRP = 300 units * $5.00 = $1,500.

Question 7

Two workers produce 100 units of output that sell for $4.00 each. Three workers produce 150 units of output that sell for $3.20 each.
-The marginal product of the third workers is:

Accepted Answer

The marginal product of the third worker is the additional output produced by adding the third worker, which is the difference between the total output with three workers (150 units) and the total output with two workers (100 units), resulting in a marginal product of 50 units.

Question 8

Two workers produce 100 units of output that sell for $4.00 each. Three workers produce 150 units of output that sell for $3.20 each.
-The marginal revenue product of the third worker is:

Accepted Answer

The marginal revenue product (MRP) of the third worker is calculated by finding the change in total revenue when the third worker is added. Initially, with two workers, the revenue is 100 units * $4.00 = $400. With three workers, the revenue is 150 units * $3.20 = $480. The change in revenue is $480 - $400 = $80, which is the MRP of the third worker.

Question 9

-Diminishing returns:

Accepted Answer

The answer of 
-Diminishing returns:
...

Question 10

-The marginal product of the third worker hired is:

Accepted Answer

The marginal product of a worker is the additional output produced by that worker. If the third worker hired produces 160 additional units, then their marginal product is 160 units.

Question 11

-The marginal revenue product of the third worker hired is:

Accepted Answer

The answer of 
-The marginal revenue product of the third...

Question 12

Four workers produce 200 ice cream bars that can be sold for $1 each. Five workers produce 225 ice cream bars that can be sold for $0.90 each. The marginal revenue product of the fifth worker is:

Accepted Answer

The answer of Four workers produce 200 ice cream bars...

Question 13

The marginal revenue product of labor is:

Accepted Answer

The marginal revenue product of labor incorporates all these aspects: it is the foundation for a firm's demand for labor, depends on the marginal productivity of labor and the product's price, and represents the change in total revenue from selling one more unit of the product due to an additional unit of labor.

Question 14

Assume that the marginal revenue product of the fourth worker in a business is $9.00, of the fifth worker is $7.00, and of the sixth worker is $5.00. Given these figures, how many workers would the firm be willing to hire at a wage rate of $5.10?

Accepted Answer

The firm will hire workers as long as the marginal revenue product (MRP) is greater than or equal to the wage rate. The MRP of the fifth worker is $7.00, which is greater than the wage rate of $5.10, but the MRP of the sixth worker is $5.00, which is less than the wage rate. Therefore, the firm would hire five workers.

Question 15

A firm will demand a worker as long as the worker's:

Accepted Answer

The firm will demand a worker as long as the cost of employing the worker (wage rate) does not exceed the additional revenue generated by that worker (marginal revenue product). This ensures that the worker is contributing more to the firm's revenue than they cost, making their employment economically viable.

Question 16

The demand curve for labor:

Accepted Answer

The demand curve for labor slopes downward because as wages increase, the quantity of labor demanded decreases. It is based on the marginal revenue product of labor, which is the additional revenue a firm earns by employing one more unit of labor. It also shows the amount of labor that will be demanded at any given wage, illustrating the relationship between wage rates and the quantity of labor firms are willing to hire.

Question 17

The demand curve for labor is based on workers' marginal:

Accepted Answer

The demand curve for labor is based on the marginal revenue product, which is the additional revenue generated by employing one more unit of labor.

Question 18

Given the following table, a product price of $2.00, and an hourly wage of $10, how many workers will be employed by this firm?

Accepted Answer

The answer of Given the following table, a product price...

Question 19

The supply curve for labor is:

Accepted Answer

The supply curve for labor is typically upward sloping because as wages increase, people are willing to supply more labor due to the higher returns for their work.

Question 20

Which of the following factors, in addition to income, might be considered by an individual deciding to enter a labor market?

Accepted Answer

All of the factors listed - location, long-term gains, and psychological rewards - can influence an individual's decision to enter a labor market, in addition to income considerations.

Quiz 15: Labor Markets, Unions, and the Distribution of Income-A