Suppose that Congress caps executive pay at a level below the equilibrium.The quantity of executives demanded willOA. increase; increaseOB. increase; decreaseC. decrease; increaseOD. decrease; decreaseExecutive pay will ▼The outcome is inefficient becauseOA. there is surplus of executives and some become unemployedO B. the marginal benefit to firms exceeds the marginal cost of work to executivesOC. the marginal cost of work to executives exceeds the marginal benefit to firmsO D. government employees will move to the private sector#34the quantity of executives supplied will5O96&748Ö Suppose that Congress caps executive pay at a level below the equilibrium.The quantity of executives demanded willOA. increase; increaseOB. increase; decreaseOC. decrease; increaseO D. decrease; decreaseExecutive pay willThe outcome is ineOA. there is surOB. the marginaOC. the marginaOD. governmenrisefallсto$, the quantity of executives supplied willes and some become unemployeds exceeds the marginal cost of work to executiveso executives exceeds the marginal benefit to firmsI move to the private sector

The demand curve depicts the quantity demanded at each price level, keeping other factors of demand…

Suppose that Congress caps executive pay at a level below the equilibrium. The quantity of executives demanded will OA. increase; increase OB. increase; decrease OC. decrease; increase O D. decrease; decrease Executive pay will The outcome is inefficient because the quantity of executives supplied will

Suppose that Congress caps executive pay at a level below the equilibrium. The quantity of executives demanded will OA. increase; increase OB. increase; decrease OC. decrease; increase O D. decrease; decrease Executive pay will The outcome is inefficient because the quantity of executives supplied will

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 7PA

See similar textbooks

Similar questions

To maximize profit, a firm OA. uses the quantity of land at which the rental rate equals the value of marginal product of land OB. uses the quantity of capital at which the suppliers' expected profit equals the value of marginal product of capital O c. uses the quantity of capital at which the marginal revenue equals the value of marginal product of capital O D. balances the rental rate of capital against the wage rate of labor 7 5 > 6 M & 7 O * 8 O Next C NS Co ho Miha NS. ythor ers [T Camp.
24 A competitive firm will hire inputs up to the point where: a. The price of the-input equals îts marginat physical product of the input. b. The marginal product of the input reaches a maximum. The price of the input equals the(valuelof the marginal product of the input. d. The price of the input equals the price of the output.
56 48 40 32 24 16 0 - Total Cost is $ 2400 4800 7200 The graph shows the short-run cost curves for a firm in a perfectly competitive market. The firm's only variable input is labour and the wage rate is $36. If market price is $48: - profit-maximizing level of output is - Total Fixed Cost is $ - for the profit maximizing output the firm should hire - the firm's profit is $ If market price is $16: - profit-maximizing level of output is 9600 - the firm's profit is $ SMC ATC units of labour. AVC
Leadbelly Co. sells pencils in a perfectly competitiveproduct market and hires workers in a perfectly compel·ilive labor market. Assume tha t the market wage ra le forworkers is $150 per day.a. What rule should Leadbcily follow to hire theprofit-maximizing ammmt ol labor?b. Al the profit-maximizing level of output, the marginal product of the last worker hirro is 30 boxesof pencils per day. Calculate the price of a box ofpencils.c. Draw a diagram of the labor market fo r pencil wo.rkers (as in Figure 4 ol this chapter) next to a diagramof the labor supply and demand for Leadbelly Co. (asin Figure 3). Label the equilibrium wage and quanti tyof labor lor both the market and the lirm. How arethese d iagrams related?d. Suppose some pencil workers switch to jobs in thegrowing computer industry. On the sidc,-by-5idediagrams from part (c), show how this changeaffects the equilibrium wage and quantity o( laborlor both the pencil market and lor Leadbelly. Howdocs this change affect the marginal…
Completed 0 out of 30 Resources Submit Question 24 of 30 What is the elasticity of demand for labor? A measure of how upset your boss is when his employees ask for more money. O A measure of how responsive firms' supply of labor is to changes in the wage rate. A measure of the extra revenue earned by the firm resulting from hiring one more unit of labor. A measure of how much firms' profits are affected by changes to wages. A measure of how sensitive the amount of labor firms will hire is to changes in the wage rate. A measure of the sensitivity of wage rates to the unemployment rate. Suppose you discover that your boss has a demand for labor that is very elastic. What does this imply in terms of y requesting a raise? Your boss may likely eliminate some positions (fire some people) if wages rise. Your boss will maintain the exact same labor force (not fire or hire anyone) if wages rise. Your boss is a flexible and undertanding person, so he or she is likely to accomodate any request…
16. Bob White argues that if his wage went up from $10/hour to $20/hour he would still be able to pay rent and feed his family even if he worked half as many hours. So, if his wage increased he would want to work less. What is strange about Bob White's labor supply curve? a. it is very elastic b. it is very inelastic c. it slopes down d. it is vertical
A firm will be better off by hiring an additional worker only when: The overall benefit is greater than the overall cost of having all the workers it has. The extra benefit is greater than the extra cost of doing so. Wages in the labor market drop. O The price of what it produces increases.
5. As an employer hires more labor, we expect the marginal revenue product of labor to: a. Increase. b. Decrease. c. Remain constant. d. Impossible to determine. 6. If a firm has market power ( as opposed to being perfectly competitive) and can thus exercise some control over wages, a. It will pay a wages less than MRP. b. it will pay a wage eqaul to MRP. c. it will pay a wage greater than MRP. 7. Rasing the minimum wage will a. Create a surplus of labor. b. raise workers' wages. c. Increase unemployment. d. all of the above. 8. The ease with which people will increase or decrease their income relative to the rest of society is called: a. Income inequality. b. consumption inequality. c. Economic mobility. d. progressive taxation. 9. what is one reason why income inequality in a society might result in economic efficiency? a. it will raise everyone's standard of living equally. b. it will provide an incentive for people to acquire valuable skills. c. it will fully utilize the abilities…
What causes the labor supply curve sometimes to bend backward at higher wages? O It can be harder to get a high wage job. O An employee may want to work less if wages are higher. O An employer may not be willing to hire as many workers at higher wages. An employee may want to work more days at higher wages. O An employer might allow fewer breaks at higher wages.
In 2018, General Motors (GM) announced that it would reduce employment by 14,000 workers. a. What does this decision reveal about how GM viewed its marginal revenue product (MRP) and marginal resource cost (MRC)? O The MRC of those 14,000 workers was negative. O The MRC of those 14,000 workers was less than the MRP. O The MRP of those 14,000 workers was negative. O The MRC of those 14,000 workers was greater than the MRP. b. Why didn't GM reduce employment by more than 14,000 workers or by fewer than 14,000 workers? O The company wanted to set the labor level where MRC equaled MRP to maximize profits. The company wanted to set the labor level where MRC equaled MRP to maximize revenue. O This was what the board of directors voted to do. O It lowered GM's cost enough to make some profit.
1. A competitive firm sells its output for $30 per unit. The marginal product of the 10th worker is 20 units of output per day; the mar ginal product of the 11th worker is 16 units of output per day. The firm pays its workers a wage of $1 50 per day. a. For the 11th worker, the value of the marginal product of labor is $120. b. For the 11th worker, the value of the marginal product of labor is S$480. c. For the 11th worker, the value of the marginal product of labor is $600. d. For the 11th worker, the value of the marginal product of labor is S$2,400.
A profit-maximizing firm will continue to hire workers until O A. the marginal product equals the wage.rate. O B. the value of the marginal product surpasses the wage rate OC. the marginal product starts to decrease O D. the revenue from the marginal worker equals the wage rate.