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Labor Economics Study Set 3

Business

Quiz 3 :

Labor Demand

Quiz 3 :

Labor Demand

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The elasticity of substitution is the
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E

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Labor demand is more elastic the greater the elasticity of substitution between labor and capital because
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C

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The production function relates
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C

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What is the most accurate description of the value of a worker to the firm?
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Labor demand is more elastic
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The marginal rate of technical substitution at any particular labor-capital bundle is
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Ally owns a shoe store. The market wage is $10 per hour, and the cost of capital is $2 per week for every $1000, of capital borrowed. Consider the isocost line associated with spending $8000, per week, and let the y-axis be the amount of capital borrowed in increments of $1000. Which of the following is not true?
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At a wage of $25 per hour, the firm employs 50,000 of hours of labor per week. If the wage would increase to $27 per hour, the firm would employ 45,000 hours of labor per week. What is the elasticity of labor demand?
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What is an example of the substitution effect?
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Why is the short run labor demand curve less elastic relative to the long run labor demand curve?
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At what point should a firm stop hiring workers?
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Which of the following statements is false?
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When estimating a labor demand function, one needs to
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Labor demand is more elastic the greater the elasticity of demand for the firm's output because
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What is not true when thinking of the firm's objective as a cost-minimization problem rather than as a profit-maximization problem?
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What is an example of the scale effect?
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The cross-elasticity of labor with respect to capital is the
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The slope of the production function while holding capital fixed is
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The law of diminishing returns, as it applies to labor, means that
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How does a profit-maximizing firm that is operating in a competitive labor market respond to an increase in the wage rate?
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