# Quiz 13: Factor Markets

Business

Q 1Q 1

Which of the following is NOT a goal of a labor union?
A) profit maximization
B) job security
C) competitive market wage
D) total wage maximization

Free

Multiple Choice

C

Q 2Q 2

A monopsony has a marginal revenue product curve of MRP

_{L}= 100 - l and faces a labor supply curve of W = 1.5l. How many workers will the price taker hire? A) 100 B) 50 C) 25 D) 40Free

Multiple Choice

D

Q 3Q 3

(Figure: Marginal Productivity of Apple Pickers I) Assume that the marginal productivity of apple pickers has increased. Which graph best illustrates this change?
A) (a)
B) (b)
C) (c)
D) (d)

Free

Multiple Choice

C

Q 4Q 4

(Figure: Labor Union Wages I) The figure represents a labor union with wage in dollars and quantity of labor in hundreds of hours. If the labor union chooses to maximize profit, how many workers will it supply?
A) 2,750
B) 4,000
C) 5,000
D) 8,000

Free

Multiple Choice

Q 5Q 5

(Figure: Budget Constraints and Indifference Curves I) The figure shows budget constraints and indifference curves for a representative individual. Identify the substitution effect of the increase in the wage rate in the associated graph.
A) C to B
B) B to A
C) A to C
D) A to B

Free

Multiple Choice

Q 6Q 6

A pizza shop's marginal product of labor, measured as the number of pizzas delivered per week, is MP

_{L}= 55 - 5L, where L is the number of workers. The average price of a pizza in this highly competitive market is $10. The shop can hire workers at the market wage of $300 per week. The marginal product of labor for the fourth worker is ____. A) 55 B) 45 C) 35 D) 25Free

Multiple Choice

Q 7Q 7

Table (Baristas Labor I). Suppose that the wage rate for baristas is $9 per hour and the average price of cappuccino is $4.45. Suppose the productivity of workers increases by 10% compared to the output shown in the table. The profit-maximizing quantity of labor would now be ____.
A) 2
B) 3
C) 4
D) 5

Free

Multiple Choice

Q 8Q 8

Assume that the labor market is in equilibrium. An increase in the availability of public transportation would shift labor __________ the equilibrium wage and _____ the amount of labor employed.
A) demand to the right, increasing; increasing
B) supply to the right, decreasing; increasing
C) demand to the left, decreasing; decreasing
D) supply to the left, increasing; decreasing

Free

Multiple Choice

Q 9Q 9

Which of the following statement(s) is (are) true?
I) A labor union can choose to maximize profit, maximize total wages of its members, or accept the competitive wage.
II) The number of workers employed when a union is present is generally greater than the number employed in a perfectly competitive labor market.
III) The wage rate paid to union workers typically exceeds that of workers in a competitive market.
A) I, II, and III
B) III
C) I and III
D) II and III

Free

Multiple Choice

Q 10Q 10

Table (Baristas Labor I). Suppose that the wage rate for baristas is $9 per hour and the average price of cappuccino is $3. The profit-maximizing quantity of labor is ____.
A) 2
B) 3
C) 4
D) 5

Free

Multiple Choice

Q 11Q 11

Suppose the demand faced by a labor monopsony is W = 20,000 - 50l, where W is the annual wage and l is the number of workers hired. The labor supply is given by W = 5,000 + 75l. The monopsony will pay a wage equal to:
A) $14,000.
B) $10,625.
C) $16,250.
D) $20,000.

Free

Multiple Choice

Q 12Q 12

Assume there is a decrease in the demand for soda, some of which comes in aluminum cans. In the market for bauxite, the main mineral source of aluminum, the equilibrium price would _____ and the equilibrium quantity would _____.
A) rise; fall
B) fall; fall
C) rise; rise
D) fall; rise

Free

Multiple Choice

Q 13Q 13

A monopsony has a marginal revenue product curve of MRP

_{L}= 100 - l and faces a labor supply curve of W = 1.5l. How many workers will the monopsony hire? A) 100 B) 50 C) 25 D) 40Free

Multiple Choice

Q 14Q 14

A pizza shop's marginal product of labor, measured as the number of pizzas delivered per week, is MP

_{L}= 55 - 5L, where L is the number of workers. The average price of a pizza in this highly competitive market is $10. The shop can hire workers at the market wage of $300 per week. The marginal product of labor for the second worker is ____. A) 55 B) 45 C) 35 D) 25Free

Multiple Choice

Q 15Q 15

(Figure: Budget Constraint I) If Jude gets paid $20 per hour, which graph best illustrates their budget constraint?
A) (a)
B) (b)
C) (c)
D) (d)

Free

Multiple Choice

Q 16Q 16

A pizza shop's marginal product of labor, measured as the number of pizzas delivered per week, is MP

_{L}= 55 - 5L, where L is the number of workers. The average price of a pizza in this highly competitive market is $10. The shop can hire workers at the market wage of $300 per week. There is a diminishing marginal product of labor when worker number ____ is hired. A) 2 B) 3 C) 4 D) 5Free

Multiple Choice

Q 17Q 17

(Figure: Budget Constraint I) If Katarina earns $20 per hour but can work only 4 hours per day, which graph best illustrates her budget constraint?
A) (a)
B) (b)
C) (c)
D) (d)

Free

Multiple Choice

Q 18Q 18

(Figure: Budget Constraint I) If Aleksandra was getting paid $20 per hour, then received a raise of $10 per hour, which graph would best illustrate her new budget constraint?
A) (a)
B) (b)
C) (c)
D) (d)

Free

Multiple Choice

Q 19Q 19

(Figure: Budget Constraints and Indifference Curves I) The figure shows budget constraints and indifference curves for a representative individual. Identify the income effect of the increase in the wage rate in the associated graph.
A) C to B
B) B to C
C) A to C
D) A to B

Free

Multiple Choice

Q 20Q 20

A union faces a labor demand curve given by MRP

_{L}= 100 - 5L. If the union wishes to maximize the total wages of its membership, members will earn an average wage of $____. A) 70 B) 60 C) 50 D) 40Free

Multiple Choice

Q 21Q 21

(Figure: Monopsony Employment I) The deadweight loss associated with the monopsony equals:
A) $701.75.
B) $562.50.
C) $400.
D) $312.25.

Free

Multiple Choice

Q 22Q 22

(Figure: Monopsony Employment I) The monopsony will offer a wage of:
A) $52.50.
B) $60.
C) $75.
D) $37.50.

Free

Multiple Choice

Q 23Q 23

(Figure: Labor Union Wages II) The figure represents a labor union with wage in dollars and quantity of labor in hundreds of hours. If the labor union chooses to maximize profit, the deadweight loss will be:
A) C + E + F + H + I.
B) F + I.
C) C + E + F.
D) B + D + G.

Free

Multiple Choice

Q 24Q 24

A pizza shop's marginal product of labor, measured as the number of pizzas delivered per week, is MP

_{l}= 55 - 5L, where L is the number of workers. The current average price of a pizza in this highly competitive market is $10. The shop, a monopsonist, faces labor supply of W = 100 + 40l, where W is the wage per week and L is the number of workers. The pizza shop will hire ____ workers when the price of a pizza is $10. A) 5.00 B) 3.46 C) 2.67 D) 1.89Free

Multiple Choice

Q 25Q 25

The marginal product of labor curve for Coast to Coast, a standup paddle board outfitter, is MRP

_{L}= 500 -100L, where L is the number of guides hired per week and MRP_{L}is dollars earned per guide per week. The prevailing market wage is $200 per week. The choke wage for Coast to Coast is $____. A) 200 B) 300 C) 400 D) 500Free

Multiple Choice

Q 26Q 26

(Figure: Monopsony Employment I) The price taker will offer a wage of:
A) $100.
B) $50.
C) $40.
D) $60.

Free

Multiple Choice

Q 27Q 27

(Table: Short-run Production Function I) The table shows the short-run production function for a competitive firm. The marginal product of labor for the second worker is ____.
A) 30
B) 24
C) 18
D) 16

Free

Multiple Choice

Q 28Q 28

For a given labor demand curve, which of the following is NOT held constant?
A) the price of the output
B) the production function
C) the productivity of labor
D) the price of labor

Free

Multiple Choice

Q 29Q 29

(Table: Labor Hours Supplied I) The table shows the number of labor hours supplied per worker for various hourly wage rates. The total amount of labor hours supplied at $20 per hour is:
A) 20.
B) 30.
C) 90.
D) 100.

Free

Multiple Choice

Q 30Q 30

When examining the labor market in the short run, which of the following is assumed to be constant?
A) marginal productivity of labor
B) quantity of capital
C) the wage rate
D) labor supply

Free

Multiple Choice

Q 31Q 31

(Table: Short-run Production Function I) The table shows the short-run production function for a competitive firm. Assuming the firm sells its output for $20 per unit, the marginal revenue product of labor for the second worker is ____.
A) 600
B) 480
C) 370
D) 320

Free

Multiple Choice

Q 32Q 32

(Figure: Monopsony Employment I) A price taker will choose to employ _____ workers.
A) 60
B) 50
C) 40
D) 25

Free

Multiple Choice

Q 33Q 33

If MRP

_{L}= W, then the firm: A) should hire more labor. B) should reduce the amount of labor it uses. C) should not change the amount of labor it uses, since the amount is optimal now. D) should reconsider how much capital it uses.Free

Multiple Choice

Q 34Q 34

Table (Baristas Labor I). Suppose that the wage rate for baristas is $12 per hour and the average price of cappuccino is $9. The profit-maximizing quantity of labor is ____.
A) 2
B) 3
C) 4
D) 5

Free

Multiple Choice

Q 35Q 35

If a monopsony faces an elasticity of labor supply of 3 and a marginal expenditure of $120, it will offer a wage of:
A) 100.
B) 50.
C) 25.
D) 40.

Free

Multiple Choice

Q 36Q 36

(Figure: Labor Union Wages I) The figure represents a labor union with wage in dollars and quantity of labor in hundreds of hours. If the labor union chooses to maximize total wages, how many workers will it supply?
A) 2,750
B) 4,000
C) 5,000
D) 8,000

Free

Multiple Choice

Q 37Q 37

(Table: Short-run Production Function I) The table shows the short-run production function for a competitive firm. Assuming the firm sells its output for $20 per unit, the marginal revenue product of labor for the third worker is ____.
A) 600
B) 480
C) 370
D) 320

Free

Multiple Choice

Q 38Q 38

A pizza shop's marginal product of labor, measured as the number of pizzas delivered per week, is MP

_{l}= 55 - 5L, where L is the number of workers. The current average price of a pizza in this highly competitive market is $10. The shop, a monopsonist, faces labor supply of W = 100 + 40l, where W is the wage per week and L is the number of workers. The pizza shop will hire ____ workers when the price of a pizza is $15. A) 4.68 B) 6.30 C) 2.67 D) 1.89Free

Multiple Choice

Q 39Q 39

(Table: Demand for Labor I) If the market wage is $25, the firm should hire _____ workers.
A) 5
B) 4
C) 3
D) 6

Free

Multiple Choice

Q 40Q 40

The marginal product of labor curve for Coast to Coast, a standup paddle board outfitter, is MRP

_{L}= 500 -100L, where L is the number of guides hired per week and MRP_{L}is dollars earned per guide per week. The prevailing market wage is $200 per week. The optimal number of labor for Coast to Coast to hire is ____. A) 2 B) 3 C) 4 D) 5Free

Multiple Choice

Q 41Q 41

A labor market monopsony faces a(n):
A) horizontal labor supply curve.
B) vertical labor supply curve.
C) upward-sloping labor supply curve.
D) downward-sloping labor supply curve.

Free

Multiple Choice

Q 42Q 42

(Table: Demand for Labor I) The table shows the quantity of labor demanded at different wage rates. Which of the following statements is TRUE?
I) When the market wage is $25 and the firm hires 7 workers, the benefit of hiring the seventh worker is greater than the costs of hiring the seventh worker.
II) When the market wage is $25 and the firm hires 4 workers, the benefit of hiring the fourth worker is less than the costs of hiring the fourth worker.
III) When the market wage is $25 and the firm hires 5 workers, the benefit of hiring the fifth worker on the margin equals the costs on the margin of hiring the fifth worker.
A) I
B) I and II
C) III
D) I and III

Free

Multiple Choice

Q 43Q 43

(Figure: Labor Union Wages II) The figure represents a labor union with wage in dollars and quantity of labor in hundreds of hours. If the labor union chooses to maximize total wages, the deadweight loss will be:
A) C + E + F + H + I.
B) F + I.
C) C + E + F.
D) B + D + G.

Free

Multiple Choice

Q 44Q 44

Suppose the demand faced by a labor monopsony is W = 40,000 - 100l, where W is the annual wage and L is the number of workers hired. The labor supply is given by W = 10,000 + 100l. The monopsonist would pay a wage of $____.
A) 40,000
B) 30,000
C) 20,000
D) 10,000

Free

Multiple Choice

Q 45Q 45

(Table: Labor Hours Supplied I) The table shows the number of labor hours supplied per worker for various hourly wage rates. The correct market-level labor supply curve is:
A)
B)
C)
D)

Free

Multiple Choice

Q 46Q 46

Compass Rose Landscaping operates in a very competitive market. It charges $80 per hour and pays the going market wage of $20 per hour to its workers. At its current level of employment, it has 3 workers, with the marginal product of the third worker equal to 5. Compass Rose should:
A) continue to use 3 workers.
B) hire more than 3 workers.
C) hire fewer workers.
D) The question cannot be answered with the information provided.

Free

Multiple Choice

Q 47Q 47

Table (Baristas Labor I). Suppose that the wage rate for baristas is $9 per hour and the average price of cappuccino is $4.50. The profit-maximizing quantity of labor is ____.
A) 2
B) 3
C) 4
D) 5

Free

Multiple Choice

Q 48Q 48

If the labor supply curve faced by a monopsony is given by l = -800 + 50W, then the correct marginal expenditure curve will be:
A) l = -800 + 100W.
B) W = 16 - 0.02l.
C) l = -800 + 25W.
D) W = 16 - 0.04l.

Free

Multiple Choice

Q 49Q 49

If the marginal cost of labor curve lies above the labor supply curve, the firm is likely a(n):
A) monopsony.
B) bilateral monopoly.
C) oligopoly.
D) monopoly.

Free

Multiple Choice

Q 50Q 50

(Table: Short-run Production Function I) The table shows the short-run production function for a competitive firm. Assuming the firm sells its output for $20 per unit and workers earn a market wage of $160 per day, the firm should hire ____ workers.
A) 8
B) 7
C) 6
D) 5

Free

Multiple Choice

Q 51Q 51

The government offers subsidies to homeowners for the purchase and installation of solar energy generating equipment. Given that silicon (derived from silicate minerals) is the main input in the production of solar panels, how will the subsidy affect the market for silicon?
A) Demand will rise, leading to an increase in the equilibrium price and quantity.
B) Supply will rise, leading to an increase in the equilibrium quantity and decrease in price.
C) Demand will fall, leading to a decrease in the equilibrium price and quantity.
D) Supply will fall, leading to an increase in the equilibrium price and decrease in quantity.

Free

Multiple Choice

Q 52Q 52

In the market for unimproved land, supply would best be described as:
A) elastic.
B) inelastic.
C) perfectly elastic.
D) perfectly inelastic.

Free

Multiple Choice

Q 53Q 53

A firm sells bagels for 50 cents each. With 10 workers the firm produces 100 dozen per hour, and with 12 workers it produces 123 dozen per hour. If the firm has 12 workers at the competitive equilibrium, the workers are earning $____ per hour assuming an average 8-hour shift per worker.
A) 8.63
B) 8.23
C) 7.94
D) 7.74

Free

Multiple Choice

Q 54Q 54

(Table: Short-run Production Function I) The table shows the short-run production function for a competitive firm. Assuming the firm sells its output for $20 per unit and workers earn a market wage of $80 a day, the firm should hire ____ workers.
A) 8
B) 7
C) 6
D) 5

Free

Multiple Choice

Free

Multiple Choice

Q 56Q 56

Suppose the demand faced by a labor monopsony is W = 20,000 - 50l, where W is the annual wage and l is the number of workers hired. The labor supply is given by W = 5,000 + 75l. What is the deadweight loss associated with this monopsony, rounded to the nearest dollar?
A) $105,502
B) $120,356
C) $126,563
D) $130,000

Free

Multiple Choice

Q 57Q 57

A union faces a labor demand curve given by MRP

_{L}= 100 - 5L. If the union wishes to maximize the total wages of its membership, ____ members will be employed. A) 20 B) 10 C) 8 D) 6Free

Multiple Choice

Q 58Q 58

Assume that the labor market for house painters is in equilibrium. An increase in the price of painting a house would:
A) shift labor demand to the right, increasing the equilibrium wage and number of painters employed.
B) shift labor supply to the right, decreasing the equilibrium wage and increasing the number of painters employed.
C) shift labor demand to the left, decreasing the equilibrium wage and number of painters employed.
D) shift labor supply to the left, increasing the equilibrium wage and decreasing the number of painters employed.

Free

Multiple Choice

Q 59Q 59

(Figure: Monopsony Employment I) The monopsony will hire _____ workers.
A) 100
B) 50
C) 25
D) 40

Free

Multiple Choice

Q 60Q 60

Suppose the demand faced by a labor monopsony is W = 40,000 - 100l, where W is the annual wage and L is the number of workers hired. The labor supply is given by W = 10,000 + 100l. The marginal expenditure equation is W = ____.
A) 80,000 - 100l
B) 40,000 - 200l
C) 10,000 + 200l
D) 20,000 + 100l

Free

Multiple Choice

Q 61Q 61

The marginal revenue product of labor is equal to:
A) MP

_{K}× MR. B) MP_{L}× MR. C) MP_{L}× W. D) MP_{K}× R.Free

Multiple Choice

Q 62Q 62

If the marginal expenditure for a monopsony is $75 and it is paying a wage of $50, the elasticity of labor supply is:
A) 0.5.
B) 2.
C) 0.
D) 1.

Free

Multiple Choice

Q 63Q 63

(Table: Short-run Production Function I) The table shows the short-run production function for a competitive firm. The marginal product of labor for the third worker is ____.
A) 30
B) 24
C) 18
D) 16

Free

Multiple Choice

Q 64Q 64

(Figure: Marginal Productivity of Apple Pickers I) Assume that the price per pound of apples has increased. Which graph best illustrates this change?
A) (a)
B) (b)
C) (c)
D) (d)

Free

Multiple Choice

Q 65Q 65

Suppose the demand faced by a labor monopsony is W = 40,000 - 100l, where W is the annual wage and L is the number of workers hired. The labor supply is given by W = 10,000 + 100l. The monopsonist would hire ____ workers.
A) 400
B) 300
C) 200
D) 100

Free

Multiple Choice

Q 66Q 66

(Figure: Labor Union Wages I) The figure represents a labor union with wage in dollars and quantity of labor in hundreds of hours. If the labor union chooses to maximize total wages, the equilibrium wage will be:
A) $75.
B) $63.
C) $100.
D) $130.

Free

Multiple Choice

Q 67Q 67

A backward-bending labor supply curve occurs when:
A) the substitution effect of a wage increase is greater than the income effect.
B) the income effect of a wage increase is greater than the substitution effect.
C) the substitution effect of a wage increase equals the income effect.
D) a negatively sloped labor supply curve is not possible.

Free

Multiple Choice

Q 68Q 68

(Figure: Marginal Productivity of Apple Pickers I) Assume that there is a decrease in the wage paid to apple pickers. Which graph best illustrates this change?
A) (a)
B) (b)
C) (c)
D) (d)

Free

Multiple Choice

Q 69Q 69

In the long run, a firm's decision about hiring labor is _____ compared to the short run.
A) less responsive
B) equally responsive
C) more responsive
D) unresponsive

Free

Multiple Choice

Q 70Q 70

Suppose the demand faced by a labor monopsony is W = 20,000 - 50l, where W is the annual wage and l is the number of workers hired. The labor supply is given by W = 5,000 + 75l. How many workers will the firm hire?
A) 50
B) 75
C) 60
D) 80

Free

Multiple Choice

Q 71Q 71

Assume that there has been an increase in the marginal productivity of construction workers building new housing. How might this affect the market for new housing?
A) Demand for new housing will rise, leading to an increase in the equilibrium price and quantity of new housing.
B) Supply of new housing will rise, leading to an increase in the equilibrium quantity and decrease in the price of new housing.
C) Demand for new housing will fall, leading to a decrease in the equilibrium price and quantity of new housing.
D) Supply of new housing will fall, leading to an increase in the equilibrium price and decrease in the quantity of new housing.

Free

Multiple Choice

Q 72Q 72

A pizza shop's marginal product of labor, measured as the number of pizzas delivered per week, is MP

_{L}= 55 - 5L, where L is the number of workers. The average price of a pizza in this highly competitive market is $10. The shop can hire workers at the market wage of $300 per week. The pizza shop should hire ____ workers. A) 2 B) 3 C) 4 D) 5Free

Multiple Choice

Q 73Q 73

(Figure: Marginal Productivity of Apple Pickers I) There is a decrease in total factor productivity. Which graph best illustrates this change?
A) (a)
B) (b)
C) (c)
D) (d)

Free

Multiple Choice

Q 74Q 74

Which of the following may affect a person's willingness to work?
A) age
B) health
C) family circumstances
D) All of the answers are correct.

Free

Multiple Choice

Q 75Q 75

Assume that the initial short-run labor demand curve is given by MRP

_{L}_{1}= 800 - 50l, where l is the quantity of labor demanded. The market wage rate is $200 per week. Graphically explain why long-run labor demand is flatter than short-run labor demand.Free

Essay

Q 76Q 76

A union faces a labor demand curve given by MRP

_{L}= 100 - 5L. If the union wishes to maximize the total wages of its membership, how many members will be employed and what will be the average wage?Free

Essay

Q 77Q 77

(Figure: Market for Labor I)
a. Determine the MRP

_{L}, l^{S}_{,}and ME equations. b. Calculate and then illustrate the equilibrium outcome for the monopsonist. c. Calculate and then illustrate the equilibrium outcome if the employer were a perfect competitor. d. Complete the following table.Free

Essay

Q 78Q 78

A pizza shop's marginal product of labor, measured as the number of pizzas delivered per week, is MP

_{L}= 55 - 5L, where L is the number of workers. The average price of a pizza in this highly competitive market is $10. The shop can hire workers at the market wage of $300 per week. a. What is the marginal product of labor for the second worker? b. Does the law of diminishing marginal productivity apply in this scenario? If so, at what quantity level does it occur? c. How many workers will the pizza shop hire?Free

Essay

Q 79Q 79

Table (Baristas Labor I). Suppose that the wage rate for baristas is $9 per hour and the average price of cappuccino is $3.
a. Find the profit-maximizing quantity of labor.
b. What would be the new profit-maximizing quantity of labor if the market wage increased $12 per hour, ceteris paribus?
c. What would be the new profit-maximizing quantity of labor if the market wage remained at $9 per hour but the price of cappuccino increased to $4.50, ceteris paribus?
d. What would be the new profit-maximizing quantity of labor if the market wage remained at $9 per hour and the price of cappuccino at $3 but baristas all became 10% more productive because of an improvement in the way cappuccinos are made?

Free

Essay

Q 80Q 80

Use your understanding of marginal revenue product of labor, along with the appropriate graph, to explain one reason the average salary of National Football League players is higher than the average salary of college professors.

Free

Essay

Q 81Q 81

(Figure: Minimum Wage I) Explain and graphically illustrate how the passage of a minimum wage would affect this market.

Free

Essay

Q 82Q 82

(Table: Marginal Expenditure Curve I) Explain why a monopsony faces a marginal expenditure curve that lies above the supply curve. Each worker is named, for a total of four workers. All dollar values are given as dollars per hour.

Free

Essay

Q 83Q 83

The marginal product of labor curve for Coast to Coast, a standup paddle board outfitter, is MRP

_{L}= 500 -100L, where L is the number of guides hired per week and MRP_{L}is dollars earned per guide per week. The prevailing market wage is $200 per week. a. Graph both the MRP_{L}and the prevailing market wage in the grid provided. b. What is the choke wage for Coast to Coast? c. What will be the optimal amount of labor for Coast to Coast to hire?Free

Essay

Q 84Q 84

Suppose the demand faced by a labor monopsony is W = 40,000 - 100l, where W is the annual wage and L is the number of workers hired. The labor supply is given by W = 10,000 + 100l.
a. Derive the marginal expenditure equation.
b. Determine the wage the monopsonist would pay and how many workers it would hire.

Free

Essay

Q 85Q 85

(Figure: Budget Constraint for Work or Leisure I)
a. Graph a budget constraint assuming a person has 24 hours that can be used for work or leisure at a wage rate of $20. Note the optimal consumption-leisure bundle.
b. Graph a budget constraint assuming a person has 24 hours that can be used for work or leisure at a wage rate of $30. Note the optimal consumption-leisure bundle.
c. Determine both the income and substitution effects on the graph.

Free

Essay

Q 86Q 86

At many colleges and universities, adjunct (part-time) faculty do not belong to a union. Explain what would happen to faculty wages and employment at a university if the adjunct faculty successfully unionized.

Free

Essay

Q 87Q 87

A firm sells bagels for 50 cents each. With 10 workers the firm produces 100 dozen per hour, and with 12 workers it produces 123 dozen per hour. If the firm has 12 workers at the competitive equilibrium, what is the marginal revenue product of labor and the market wage rate, assuming an average 8-hour shift per worker?

Free

Essay

Q 88Q 88

Monika, a student, can work or enjoy leisure for 16 hours a day. (Assume she sleeps 8 hours a day.)
a. On a graph, construct Monika's budget constraint if she earns $10 per hour. Label is BC

_{1}. b. On the same graph, construct Monika's budget constraint if she earns $15 per hour. Label is BC_{2}. c. On the same graph, construct Monika's budget constraint if she earns $10 per hour but receives the equivalent of $50 per day from her parents. Label is BC_{3}.Free

Essay

Q 89Q 89

On a graph, draw an indifference curve for a workaholic versus a laid-back person. Comment on their respective marginal rates of substitution between leisure and consumption.

Free

Essay

Q 90Q 90

Explain how the following would affect the equilibrium wage and quantity of labor in the labor market.
a. a decrease in the price of the output made by labor
b. an increase in legal immigration
c. an increase in the amount of capital used by firms

Free

Essay

Q 91Q 91

(Table: Short-run Production Function I) The table shows the short-run production function for a competitive firm.
a. Complete the table, assuming the firm sells its output for $20 per unit.
b. How many workers will the firm hire at the market wage of $160 per day?

Free

Essay

Free

Essay

Q 93Q 93

A pizza shop's marginal product of labor, measured as the number of pizzas delivered per week, is MP

_{l}= 55 - 5L, where L is the number of workers. The current average price of a pizza in this highly competitive market is $10. The shop, a monopsonist, faces labor supply of W = 100 + 40l, where W is the wage per week and L is the number of workers. a. How many workers will the pizza shop hire when the price of a pizza is $10? b. An influx of college students coming back from vacation raises the market price of a pizza to $15. How many workers will the pizza shop hire when the price of a pizza is $15?Free

Essay

Free

Essay