exam 4 set 1

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A production function shows ____________.

the number of workers employed and the corresponding output levels that will be produced.
According to the Law of Diminishing Returns, ____

the marginal productivity of an additional unit of labor eventually decreases as the quantity of labor increases.
When the firm's VMPL is plotted in a diagram with the quantity of labor measured along the horizontal axis, the resulting curve will be ____and constitutes the firm's ____

downward sloping, demand curve for labor
Because this firm is competitive and has no control over its product's price, the declining values for VMPL are a result of diminishing

marginal productivity
When the VMPL is plotted in a diagram with the number of workers measured along the horizontal axis, the resulting curve (connecting the plotted points) is the firm's

demand for labor
How does the labor-leisure trade-off determine the supply of labor?

An increase in the wage rate is an increase in the opportunity cost of leisure, and can therefore be expected to reduce the amount of leisure one wishes to consume. Choosing less leisure is equivalent to supplying more labor, thus yielding a positive relationship between the wage rate and the amount of labor supplied.
gps location devices in delivery trucks

LCT
Radio frequency identification tags in grocery stores

LST
Which strategy is more likely to lead your employees to agree to a 50-hour work week?

Strategy 2, because the MC of not working increases significantly after 40 hours of work.
How will this law affect the equilibrium quantity of labor in this labor market? How will it affect the equilibrium wage in this industry?

The equilibrium wage and quantity both decline, with the wage declining less than in the previous case where workers consider the insurance to be the equivalent of $11 in wages.

Author

dwrght16

330762

Card Set

exam 4 set 1

Description

exam 4

Updated

2017-04-26T01:30:13Z