Question

1. At the market equilibrium wage:

a, is the market value created by the output of these skilled workers.

b, the strength of labor unions.

c, the monopsony power of firms.

d, the quantity demanded for labor = quantity supplied for labor

2.

Figure 17-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.


Refer to Figure 17-2. If Becca can sell her bracelets at $3 each, what is the marginal product of the 4th worker?

1, 36 bracelets

2, $144

3, 12 bracelets

4, $36

Answer 1

1. At the equilibrium market wage :the quantity demanded for labour is equal to quantity supplied for labour.

In labour market, equilibrium exists where quantity demanded for labour is equal to quantity supplied for labour and there will equilibrium wages at which both supply and demand are equal.

Option D is correct.

2. Marginal product of 4th worker will be 36 bracelets as shown in the figure because on the y axis there is marginal product of workers and on x axis quantity of labor. Corresponding to 4th labour marginal product is 36.

The answer is not $36 because marginal product tells the output not the worth of output.

Option A is correct.