1. Refering to the individsal laber supply graph above, it a wage below W a) low
ID: 1108878 • Letter: 1
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1. Refering to the individsal laber supply graph above, it a wage below W a) lowering the wage rate will increase the individua's quantiny of labor supolied c) the income effect dominates +) the wage fate has so effects the individual's quantity of labor supplied s evidence of 4 A market supply carve for labor in generally assumed to be a) upward sloping b) downward sloping c) upward sleping in sose industries and dewnward sloping in other induseries d) upward sloping at low wages and downward slepiag lighwaPt )dowwward sloping at loue wages and upward sloping at high wages. Why might an individual's lahor supply curve be backwand bending In the neoclassical lhor modeL of the frn in callod the 5. armount that ana duonul worker heed a dio ervenor, )Higher wapes induce the individaal to work more hours b) The individual has a target income c) The substitution effect dominates their labor supply decisions d) The individual desires to parchase more consumer goods e) The individual is solely motivated by financial gain a) marginal physical product b) maxime reveaue price c) marginal factor cost d) marginal revenue product e) marginal fractional cost For Questions 2 and 3, refer to the graph belew. In the neoclassical labor model, the amount that it costs te hire an additional worker is called the oflaber 6 wage a) marginal physical preduct b) mancimum reverue price c) marginal facter cest d) marginal revenue product e) marginal fractional cost 7. In the neoclassical medel of the labor market, firms hire laber until a) the marginal revenue product equals the marginal factor cost b) the total revesue prodoct equals the total factor cost c) the marginal physical preduct equals the marginal reveaue preduct d) the marginal physical product equas e) the total physical product equals the total revenue product 2 Referring to the graph abeve which ene of the following statrments is faise the marginal factor cost. a) The graph lustrates a possible labor supply curve for an individual b) The quantity of labor sapplied is maximized at a wage of W c) The graph Mustrates a pessilble labor supply curve for an entire market d] Below a wage of Ws the substitution effect dominates the iscome effect e) Above a wage of Ws the income effect dominates the substitution eflectExplanation / Answer
1. d, because for backward bending labour supply curve as wages increases consumer wishes to supply less number of labour.
2. c, because the graph is an individual’s decision to supply labour but not market.
3. b, because below W as wages increases labour supply increases as wages increases until point W.
4.d, because at lower wages substitution effect dominates income effect thus upward sloping and at a higher wage income effect dominates substitution effect thus downward sloping labour supply curve
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