Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 18, Problem 2CQQ
To determine
Determining factor of labor demand curve in a profit maximizing firm.
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Which of the following determines the firm's demand curve for labor?
a.The size of the labor force
b.The marginal product of labor
c.The total product of labor
d.The average product of labor
38) In the short run, the marginal product of labor might increase initially as more workers are hired because
A) the first workers hired get to use the best equipment.
B) specialization allows a worker to focus on one task, thereby increasing her proficiency at that task.
c the best workers are hired first and later hires are not as skillful.
Dj beyond some point, a firm has hired too many workers.
Economics
Q)how changes in productivity influence the demand for labor.
please explain correctlt
Chapter 18 Solutions
Principles of Microeconomics (MindTap Course List)
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- Barb's Bakery employs three workers who produce 6 cakes per hour. After Barb hires a fourth worker, production increases to 12 cake per hour. Which of the following statements is TRUE? a. b. C. d. Because the marginal product of the fourth worker is greater than the average product of three workers, the average product must rise. Because the marginal product of the fourth worker is less than the average product of three workers, the average product must fall Because the marginal product of the fourth worker is less than the average product of three workers, the average product must rise. Because the marginal product of the fourth worker is greater than the average product of three workers, the average product must fall.arrow_forwardSuppose a firm finds itself in a situation where the marginal product of the last employee hired is 4 units per hour, and the marginal product of the last machinepurchased is 10 units per hour. If the wage is $20/hour and the hourly rental rate of a machine is $50, what should this firm do if it wants to be as productive aspossible?a. Lay off workers and use more machines.b. Hire workers and use less machines.c. Lay off workers and use less machines,d. Hire workers and use more machines.e. Nothing. This firm is already operating efficiently.arrow_forwardFirms will hire additional workers as long as the wage: a) is less than the marginal product of labor. b) equals the marginal product of labor. c) is greater than the marginal product of labor. d) is less than the value of the marginal product of labor.arrow_forward
- Question 20. SG store sells its products at a price of $60,000 per unit. it is assumed that labor is the only input that changes. it is known that the marginal product of the 11th worker is 16 units, MU store pays its workers $150,000 per day. What is the value of the marginal product of labor for the 11th worker? a. $2,400,000. b. $480,000. c $1,200,000. d. $960,000.arrow_forwardLabour is the beginning and end of production. Explainarrow_forwardIn the short run, the owner of a firm should continue to hire additional units of labor until: a. the price of the product is equal to the wage rate divided by the marginal product of labor. b. the wage rate is equal to the price of the product multiplied by the marginal product of labor. c. the marginal product of labor is equal to the wage rate divided by the product price. d. Both a and c are correct. e. All of the above are correct.arrow_forward
- demand curve for labor is determined bya. the opportunity oost of wO<kers' time. b. the value of the marginal product of labor.c. offsetting income and substi tution effects.d. the value of the marginal product of capital.arrow_forwardA small specialty cookie company, whose only variable input is labor, finds that the average worker can produce 100 cookies per day, the cost of the average worker is $32 per day, and the price of a cookie is $1.00. Is the firm maximizing profit? The firm A. is not maximizing profit because the marginal revenue product of labor is greater than the wage. B. is not maximizing profit because the marginal revenue product of labor is less than the wage. C. is maximizing profit because the marginal product of labor is greater than the wage. D. is not maximizing profit because the price of the output is not equal to the wage. E. is not maximizing profit because the marginal product of labor is greater than the wage.arrow_forwardRobert can make 10 pizzas each hour. He works 8 hours each day. He is paid $100 a day. The shop can sell the pizzas for $15 each. What is Robert's value of marginal product of labor?arrow_forward
- You own a landscaping company. You currently have 3 employees and are considering hiring a fourth. Hiring a fourth employee will increase the number of lawns your company can mow from 18 to 20. What is the marginal product of labor of the fourth employee? A) $5 B) 20 lawns C) 2 lawns D) 5 lawnsarrow_forwardWhen a firm experiences diminishing marginal product, what is the shape of the curve that represents the value of the marginal product of labor? Select one: a. upward sloping b. downward sloping c. vertical d. U-shapedarrow_forwardA firm in a competitive market should hire workers up to the point where the value of the marginal product of labor = a. the wage b. total revenue c. total cost d. total profitarrow_forward
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