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Exam 11: Labor Markets

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Question 41

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Firms should hire additional units of a resource as long as the:

A) marginal product of the resource exceeds the price of the resource multiplied by the quantity of output produced.
B) marginal product of the resource is less than the price of the resource.
C) price of the output produced is positive.
D) marginal revenue product of the resource exceeds the cost of an additional unit of the resource.

E) None of the above
F) A) and B)

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Question 42

Multiple Choice

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Suppose a firm can hire 100 workers at $8.00 per hour but must pay $8.05 per hour to hire 101 workers. Marginal factor cost (MFC) for the 101st worker is approximately equal to:

A) $8.00.
B) $8.05.
C) $13.05.
D) $13.00.

E) A) and C)
F) A) and B)

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Question 43

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A monopsony is defined as a monopoly that has to negotiate with a labor union.

Exhibit 11-14 Labor cost data for a monopsonist $\begin{array} { | c | c | } \hline \text { Wage Rate } & \begin{array} { c } \text { Number of } \\\text { Workers }\end{array} \\\hline \$ 0 & 0 \\5 & 10 \\8 & 20 \\12 & 30 \\16 & 40 \\\hline\end{array}$ -In Exhibit 11-14, when the monopsonist hires 30 workers, total wage cost is:

Exhibit 11-14 Labor cost data for a monopsonist $\begin{array} { | c | c | } \hline \text { Wage Rate } & \begin{array} { c } \text { Number of } \\\text { Workers }\end{array} \\\hline \$ 0 & 0 \\5 & 10 \\8 & 20 \\12 & 30 \\16 & 40 \\\hline\end{array}$ -In Exhibit 11-14, the marginal factor cost when the monopsonist goes from 30 to 40 workers hired is:

Harold Brown runs a company that sells encyclopedia sets for $250 each. When he employs 10 workers, they can sell 60 sets per week, while only 54 sets are sold when 9 workers are employed. What is the weekly marginal revenue product of the tenth worker?

Exhibit 11-14 Labor cost data for a monopsonist $\begin{array} { | c | c | } \hline \text { Wage Rate } & \begin{array} { c } \text { Number of } \\\text { Workers }\end{array} \\\hline \$ 0 & 0 \\5 & 10 \\8 & 20 \\12 & 30 \\16 & 40 \\\hline\end{array}$ -In Exhibit 11-14, the monopsonist will maximize profits by hiring how many workers?

The following chart indicates the reductions in total losses due to theft if a jewelry store hires additional security guards. $\begin{array} { | c | c | } \hline \begin{array} { c } \text { Number } \\\text { of Guards }\end{array} & \begin{array} { c } \text { Dollar Value of } \\\text { Thefts Prevented }\end{array} \\\hline 1 & 150 \\2 & 240 \\3 & 310 \\4 & 360 \\5 & 400 \\6 & 430 \\\hline\end{array}$ If the security guards can be hired for $45 per day, how many guards should the shop hire?

The increase in a firm's total revenues resulting from hiring an additional unit of labor is known as the marginal:

The labor supply curve facing a monopsonist is:

Exhibit 11-4 Supply and demand curves for food servers -In Exhibit 11-4, suppose that in the interest of boosting incomes of the working poor, Congress imposes a minimum wage of $6.00 per hour. This minimum wage rate creates a(n) :

An individual firm in a competitive labor market faces a(n) :

If the demand for the finished product increases, the:

Exhibit 11-9 A labor market -If the labor market shown in Exhibit 11-9 is competitive, the wage rate and number of workers employed will be determined at point: ​

A union can influence the demand for labor by:

Which of the following statements is true?

The demand for labor curve is identical to the:

A worker's accumulated investment in education, training, experience, and health is called:

Which of the following statements is true?

A monopsony is a: