A Firm'S Demand For Labor Curve Is Also Called Its

Question: A firm’s demand for labor curve is also called its:

marginal revenue product of labor curve.

marginal factor cost of labor curve.

marginal benefit of labor curve.

marginal valuation curve.

Answer: marginal revenue product of labor curve.

Question: Firms use information on labor’s marginal revenue product to determine:

How much to produce at each output price.

How many workers to hire at each wage rate.

How much labor services to supply at each wage rate.

How much marginal product to produce at each wage rate.

Answer: How many workers to hire at each wage rate.

Question: Let MP = marginal product, P = output price, and W = wage, then the equation that represents the condition where a competitive firm would hire another worker is:

P × MP < W.

P × MP > W.

P × MP = W.

P × W > MP.

Answer: P × MP > W.

Question: The firm’s gain in profit from hiring another worker is:

The extra output of the extra worker.

The difference between marginal revenue product and the wage of the worker.

The reduction in costs from hiring another worker.

The marginal revenue product of the extra worker.

Answer: The difference between marginal revenue product and the wage of the worker.

Question:

Answer: It is derived from the demand for products that use labor in the production process.

Question:

Answer: The marginal product of labor is the additional labor’s contribution to the firm’s total output while the marginal revenue product is the additional labor’s contribution to the firm’s total sales revenue.

Question:

Answer: The additional revenue received from selling the output produced as a result of hiring an additional worker.

Question: If a worker can produce 20 units of output which can be sold for $4 per unit, what is the maximum wage that firm should pay to hire this worker?

Answer: $80

Question:

Answer: In the short run, as more labor is hired, labor’s marginal product falls because of the law of diminishing returns.

Question: Marginal revenue product for a perfectly competitive seller is equal to:

The marginal cost of production.

The output price multiplied by the number workers hired.

The output price multiplied by the total product of labor.

The change in total revenue that results from hiring another worker.

Answer: The change in total revenue that results from hiring another worker.