LABOR MARKETS The demand for labor: a. determines the demand for the output that

Question

LABOR MARKETS The demand for labor: a. determines the demand for the output that labor helps produce. b. is derived from the demand for the output that labor helps produce. c. depends entirely on the cost of labor. d. is perfectly elastic for the market as a whole, but downward-sloping for an individual employer Each of the following reflects labor demand as a derived demand except. The demand for the services of a babysitter by new parents The demand for teachers by a public school system The demand for financial planners by Fidelity Investments The demand for baristas by Starbucks a. d· 3. The value of the marginal product of labor (VMPL) is the: a. change in total revenue that results from selling one more unit of output. b. change in output that results from employing one more unit of labor. c. d. additional revenue generated from employing one more unit of labor. total revenue generated from the use of labor. Use the information below to answer questions 4 and 5. ABC Manufacturing produces widgets and sells them in a perfectly competitive market for $2 each. The firm hires workers in a perfectly competitive labor market for $75 per day. ABC's production function is given in the chart below. Output Per Day 0 240 420 530 580 600 4 The marginal product (MP) of the second worker is- units of output, and the value of the marginal product (VMP) of the second worker is $ a. 180;90 b. 180;360 c. 210; 420 d. 210; 105 To maximize profit, ABC Manufacturing should hire: a. 2 workers. c. 4 workers d. 5 workers. b. 3 workers. 315 Chapter 15 Assignments

Explanation / Answer

The correct option is b) because demand for labor is the derived demand .It is derived for the output demanded in the product market. The correct option is d, because it doesn’t tell that demand for baristas depends on sale of coffees. The correct answer is option c), because VMPL = MPL*Price of output. The correct option is b) Because MP2 = (TP)2 –(TP)1 = 420-240 = 180. VMPL = 2*180 = 360. The correct option is c, because Equilibrium condition for labor market is VMPL = wage. At L = 4 VMPL> 75 but at L= 5 VMPL< 75.

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.