Economics Study Set 4
Quiz 17: The Markets for Labor and Other Factors of Production
Refer to Table 17-1
Refer to Table 17-1.Suppose the output price is $3.If the wage rate is $90,what is the profit-maximizing quantity of labor that the firm should hire? A) 7 units B) 5 units C) 4 units D) 3 units
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Firms use information on labor's marginal revenue product to determine A) how much to produce at each output price. B) how many workers to hire at each wage rate. C) how much marginal product to produce at each wage rate. D) how much labor services to supply at each wage rate.
A reason why a perfectly competitive firm's demand for labor curve slopes downward is that A) each additional unit of labor hired is less efficient than previously hired units. B) in the short run, as more labor is hired, labor's marginal product falls because of the law of diminishing returns. C) the extra cost of hiring additional units of labor increases as a firm hires more units of labor. D) the firm's demand curve for the product that uses labor is downward sloping.
A firm's primary interest when it hires an additional worker is A) the cost of hiring the additional worker. B) how the average output of the firm will be affected by this new worker. C) the extra revenue the firm realizes from hiring that worker. D) whether or not the new worker gets along with the firm's existing workers.
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