Question : 19.4   Chapter Figures The figure above shows a firm’s VMP curve. 1) : 1238901

 

19.4   Chapter Figures

 

The figure above shows a firm’s VMP curve.

 

1) Suppose that a new technology doubles the marginal product of the workers and the price of the product does not change. As a result, the value of marginal product of the second worker

A) remains $12.

B) becomes $6.

C) becomes $24.

D) becomes $30.

E) More information about the supply of labor is needed to answer the question.

2) Suppose that the price of the product doubles and the marginal product of the workers does not change. As a result, the value of marginal product of the second worker

A) remains $12..

B) becomes $6.

C) becomes $24.

D) becomes $30.

E) More information about the supply of labor is needed to answer the question.

 

3) Suppose that the price of the product rises. As a result,

A) there is a movement upward along the curve, such as a movement from point C to point B.

B) there is a movement downward along the curve, such as a movement from point C to point D.

C) the curve shifts rightward.

D) the curve shifts leftward.

E) More information is needed to answer the question.

 

4) Suppose that new technology raises the workers’ marginal product. As a result,

A) there is a movement upward along the curve, such as a movement from point C to point B.

B) there is a movement downward along the curve, such as a movement from point C to point D.

C) the curve shifts rightward.

D) the curve shifts leftward.

E) More information is needed to answer the question.

The figure above shows a labor market in which a union has formed.

 

5) Labor unions’ support for import restrictions represents an attempt to shift the

A) labor demand curve from LD0 to LD1.

B) labor demand curve from LD1 to LD0.

C) labor supply curve from LS0 to LS1.

D) labor supply curve from LS1 to LS0.

E) None of the above answers is correct.

 

6) Labor unions’ support for increasing the minimum wage represents an attempt to shift the

A) labor demand curve from LD0 to LD1.

B) labor demand curve from LD1 to LD0.

C) labor supply curve from LS0 to LS1.

D) labor supply curve from LS1 to LS0.

E) None of the above answers is correct.

7) Labor unions’ support for programs that increase their members’ marginal products represents an attempt to shift the

A) labor demand curve from LD0 to LD1.

B) labor demand curve from LD1 to LD0.

C) labor supply curve from LS0 to LS1.

D) labor supply curve from LS1 to LS0.

E) None of the above answers is correct.

 

19.5   Integrative Questions

 

1) The value of marginal product of labor curve

A) is upward sloping because firms want to hire more workers to increase production.

B) shows the price of a factor of production multiplied by the amount of the factor employed.

C) is the same as a firm’s supply of labor curve.

D) is downward sloping if each additional worker’s marginal product is decreasing.

E) is U-shaped.

 

2) Which rule does the United Corporation use when maximizing profit?

A) Employ all resources until the value of their marginal products is equal.

B) If the value of the marginal product of labor exceeds the wage rate, hire fewer workers.

C) Hire labor up to point at which the value of marginal product of labor equals the wage rate.

D) Reduce the wage rate until it equals the marginal product of labor.

E) Hire labor up to point at which the value of marginal product of labor equals the price of the good or service the labor produces for United Corporation.

3) The supply of labor curve for nurses shifts if

A) the wage rate paid nurses increases.

B) there is an increase in the time spent in nursing school.

C) the value of marginal product of nurses increases.

D) the value of marginal product of nurses decreases.

E) the marginal product of nurses decreases.

 

4) The demand for labor curve of nurses shifts rightward if the

A) value of marginal product of nurses increases.

B) wage rate paid to nurses rises.

C) supply of labor curve for nurses shifts leftward.

D) wage rate paid to nurses falls.

E) supply of labor curve for nurses shifts rightward.

 

5) Which of the following curves is most inelastic?

A) the supply of land

B) the supply of labor for an individual worker

C) the supply of labor for all workers

D) the demand for capital

E) the demand for labor