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Exam 18: The Markets for the Factors of Production

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Question 41

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Over the last 60 or so years, the percentage of women with paid jobs has increased significantly. Is this increase in female employment associated with an increase in the demand for labor, or is it associated with an increase in the supply of labor?

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The increase in fema...

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Question 42

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A firm hires some number of custodians to clean a large warehouse. When only a few custodians are hired, they can quickly find and remove a lot of dust and debris. As the number of custodians increases, additional custodians have to go to greater lengths and spend more time to find and remove additional dust and debris. What property of production functions is relevant to the custodians' situation?

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The property is dimi...

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Question 43

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Figure 18-5 -Refer to Figure 18-5. When the relevant labor supply curve is S₁, and the labor market is in equilibrium, the

If the value of the marginal product of labor exceeds the wage, then hiring another worker

When a firm decides to retain its earnings instead of paying dividends, the stockholders necessarily suffer.

For profit-maximizing, competitive firms, the demand curve for each factor of production equals the value of the marginal product of that factor.

From 1960 to 2015, inflation-adjusted wages increased by 165 percent in the U.S., and yet firms more than doubled the amount of labor they employed.

When a labor market experiences a surplus of labor, there is downward pressure on

Figure 18-8 The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. ​ -Refer to Figure 18-8. What is the marginal product of the second mechanic?

Table 18-3 ​ ​ -Refer to Table 18-3. Which firm's production function exhibits positive but diminishing marginal product?

Growth in real wage rates is closely tied to growth in labor productivity.

Assume the market for candles is competitive. A decrease in the market price of candles

Scenario 18-4 Suppose that workers from northern Minnesota, North Dakota, and Montana decide to immigrate to southern Canada. -Refer to Scenario 18-4. In the labor market in southern Canada, the equilibrium wage

Table 18-6 Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. ​ ​ $\begin{array} { | c | c | c | c | c | c | } \hline \begin{array} { c } \text { Labor } \\\text { (Number of } \\\text { workers) }\end{array} & \begin{array} { c } \text { Output } \\\text { (Cupcakes per } \\\text { day) }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Product } \\\text { of Labor } \\\text { (Cupcakes per } \\\text { day) }\end{array} & \begin{array} { c } \text { Value of the } \\\text { Marginal } \\\text { Product of Labor } \\\text { (Cupcakes) }\end{array} & \begin{array} { c } \text { Wage } \\\text { (Dollarsper } \\\text { worker per } \\\text { day) }\end{array} & \begin{array} { c } \text { Margin } \\\text { Profit } \\\text { (Dollar }\end{array} \\\hline 0 & 0 & & & 325 & \\\hline 1 & 200 & & & 325 & \\\hline 2 & 350 & & & 325 & \\\hline 3 & 475 & & & 325 & \\\hline 4 & 575 & & &325 & \\\hline\end{array}$ ​ -Refer to Table 18-6. The marginal product of labor begins to diminish with the addition of which worker?

A firm's demand for labor is derived from its decision to supply a good in another market.

Among the people who are characterized below, who has the highest opportunity cost of leisure?

Figure 18-8 The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. ​ -Refer to Figure 18-8. If the shop charges $150 per repair, then what is the value of the marginal product of the second mechanic?

Consider the labor market for computer programmers. During the late 1990s, the value of the marginal product of all computer programmers increased dramatically. Holding all else equal, what effect did this process have on the labor market for computer programmers? The equilibrium wage

Suppose the prices of agricultural products such as corn and soybeans increase. What is the effect of these price increases on the marginal product of the 1,000^th farm worker? What is the effect on the value of the marginal product of the 1,000^th farm worker?

An increase in the wages paid to high-school student who detassle corn will increase the labor supply of high-school students who weed soybean fields, all else equal.