1.The market supply curve for labor curve is upward-sloping because a) As the wa
ID: 1203076 • Letter: 1
Question
1.The market supply curve for labor curve is upward-sloping because a) As the wage rises, most workers want to work fewer hours. b)As the wage falls, most workers want to work more hours. c)As the wage rises, most workers are willing to work more hours. d) For most workers, as the wage rises, the preference for leisure time increases. 2 As marginal physical product diminishes, marginal revenue product a)Also diminishes. b) Is not affected. c) Rises at a diminishing rate and eventually falls. d) Rises. 3. For a minimum wage to have any impact on a labor market, it must be set at a level a)Higher than the equilibrium wage. b) Higher than MPP. c) Higher than MRP. d) Consistent with economic growth. 4. Because a union is a form of monopoly, it must be concerned about the ________ slope of the demand curve for labor. a)vertical b) horizontal c) downward d) upward
Explanation / Answer
(1) (c)
As the number of labor hours increases with an increase in wage rate, the labor supply curve slopes upward.
(2) (a)
Marginal revenue product (MRP) = Marginal physical product (MP) x Output price (P)
So, as MP falls, MRP also falls ceteris paribus.
(3) (a)
Minimum wage is example of a price floor, and a price floor is effective (binding) only if it is set at a level higher than market equilibrium price.
(4) (b)
When labor demand curve is horizontal, the wage rate is fixed, irrespective of how much labor is demanded. A labor union should feel concerned about this situation because they cannot manipulate the wage rate.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.