ECO 201 Chap 16

  1. Michael Spence proposed the signaling hypothesis. According to this hypothesis
    employers view a college education as a signal that potential workers have a certain desirable qualities
  2. The demand for labor is different from the demand for final goods and services because
    The demand for labor is derived from the demand for the good or service the labor is used to produce
  3. The Marginal product of labor is
    The additional output a firm produces as a result of hiring one more worker.
  4. A firm should hire more workers to increase its profits if
    the wage rate is less than the marginal revenue product of labor
  5. The demand curve for labor is also
    the marginal revenue product of labor curve
  6. as more output is produced the marginal product of labor declines
    Due to the law of diminishing returns
  7. For a firm operating in competitive markets, the marginal revenue product of labor equals the
    Marginal product of labor multiplied by the product price
  8. Which of the following is not held constant along a firms demand curve for labor
    the wage rate
  9. An increase in a perfectly competitive firm's demand for labor could be caused by
    a increase in the amount of human capital amoung the labor force
  10. An increase in the supply of capital which is a complement to labor, will lead to
    an increase in the demand for labor
  11. a firm chooses its profit-maximizing quantity of capital by
    comparing the price of capital w the price of labor
  12. Which of the following factors has significantly increased the supply of labor in the USsince 1950?
    an increase in the labor force participation rate of women
  13. which of the following would cause an increase in the equilibrium wage?
    the demand for labor increases faster than the supply of labor
  14. How will an increse in labor productivity affect equilibrium in the labor market?
    The demand for labor will incrase and the equilibrium wage and quantity of labor will increase
  15. Most economist believe that a small amount of the gap between the wages of white m
Card Set
ECO 201 Chap 16
The markets for labor and other factors of production