Question

# 1.For a competitive, profit-maximizing firm, the labor demand curve is the same as the Group of...

1.For a competitive, profit-maximizing firm, the labor demand curve is the same as the

marginal revenue curve.

marginal product curve.

marginal cost curve.

marginal revenue product curve.

2.Scenario 21
Gertrude Kelp owns three boats that participate in commercial fishing for fresh Pacific salmon off the coast of Alaska. As part of her business she hires a captain and several crew members for each boat. In the market for fresh Pacific salmon, there are thousands of firms like Gertrude's. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market.

Refer to Scenario 21. If Gertrude is a price taker in the labor market, she can choose

the price at which she will sell the fish she catches.

how many crew members she will hire.

the wages that she will pay to her crew members.

All of the above.

3.The distribution of income for Danville is as follows:

 Number of Families Income 500 less than \$15,000 600 between \$15,000 and \$20,000 1,000 between \$20,000 and \$25,000 700 between \$25,000 and \$30,000 500 over \$30,000

If the poverty rate in Danville is 15.2 percent, what is the poverty line in Danville?

\$15,000.

\$20,000.

\$25,000.

\$30,000.

4.Which of the following observations would be valid if the Gini coefficient is equal to one?

Perfect income inequality

Greater degree of income equality

Lorenz curve overlaps the line of perfect income equality

equal distribution of income

5.

The C-Gourmet Burger company sells burgers for \$4.05 each. The owner of the this company pays workers \$192 per day. The following table (Table 22) shows employment and production of burgers per day at this company.

Table 22

 Labor (number of workers) Quantity (Units of burgers per day) 0 0 1 74 2 136 3 189 4 236 5 270 6 300

Refer to Table 22. To maximize its profit, how many workers would the C-Gourmet Burger company employ? Show you work.

Q1. marginal revenue product curve.

​​​​​A perfectly competitive profit maximizing firm demands the labor at the level where the value of marginal product is equal to the nominal wage paid to the labor.

That is

W = P*MPL

where W is wage

P is price of output and

MPL is marginal product of labor

P*MPL is the marginal revenue product.

So, the labor demand curve for a perfectly competitive profit maximizing firm is same as marginal revenue product curve.

​​​​​​

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