Question

A) The marginal revenue product of labor

1. Is the amount a firm saves by employing another worker.
2. is equal to marginal revenue times the marginal product of labor
3. Depends on the market wage paid by other firms.
4. sings "the cheese stands alone."

B) For a given shift in supply...

1. A more elastic demand curve would see prices change more and quantities change less.
2. A more inelastic demand curve would see prices change less and quantities change more.
3. A more inelastic demand curve would see prices change more and quantities change less.
4. The elasticity of demand is irrelevant to price and quantity changes.

C) Consider what you have learned about supply and demand in econ 110 and this class. Now, suppose the U.S. were to allow more low skilled immigrants to legally work in this country. Obviously, the supply of low skilled labor would increase. If this were to happen what would you expect to happen to the short run wages of current low skilled workers?

1. They would decline
2. They would decrease
3. They would drop
4. All of the above

Answer 1

a). The marginal revenue product shows the additional value that is created from the an additional unit of output produced, the marginal revenue product is calculated by marginal revenue is multiplied by the marginal product. Here the it should be multiplied by the marginal revenue product of labour.

Ans: is equal to marginal revenue times the marginal product of labor

b). The higher the elastic the demand curve , the higher will be the quantities change and the price changes less. For inelastic demand curves the quantities change less and the prices change higher.

Ans: A more inelastic demand curve would see prices change more and quantities change less.

c). If there is an increase in the low skilled immigrants , it will increase the labour supply and the labour supply curve would shift downward and there would be a decline in the wages.

Ans: All of the above.