Question 1
According to the balance of economic resources and unlimited want, what is the condition of maximising effectiveness in labour market?
Wage level > marginal rate of substitution
Wage level < marginal rate of substitution
Wage level = marginal rate of substitution
Wage level > marginal rate of technical substitution
Question 2
Marginal product of labour is which of the following things?
Product increase when additional unit of labour is hired
Income increase when additional unit of labour is hired
Product value increase when additional unit of labour is hired
Wage increase when additional unit of labour is hired
Question 3
Which of the following is two factors affecting real wage level?
Monetary wage and price index
Time and price indices
Monetary wages and hours
Monetary wages and prices of some commodities
Question 4
Which of the following curve indicates the relationship between unemployment rate and inflation rate?
A) Indifference curve
B) Keel Lorenz curve
C) Utility curve
D) Philipps curve
E) None of the above
Question 1
According to the balance of economic resources and unlimited want, effectiveness of labor utilization in labor market can be maximized when condition of equality between wage rate prevailing in the market and marginal rate of substitution between labor and other factors of production is achieved.
So, the condition of maximizing effectiveness in labor market is wage level equals marginal rate of substitution.
The correct answer is the option (3).
Question 2
Marginal product of labor refers to the increase in total output produced when one additional unit of labor is employed.
So, marginal product of labor is product increase when additional unit of labor is hired.
Hence, the correct answer is the option (1).
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