Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 18, Problem 6CQQ
To determine
Theeffect of reducing stock of capital on factor marker.
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Chapter 18 Solutions
Principles of Microeconomics (MindTap Course List)
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- The demand for a factor of production (productive resource) is derived from the demand for the good the factor produces True Falsearrow_forwardSuppose that the market for labor is initially in equilibrium. An increase in the price of output will cause the equilibrium wage a. and the equilibrium quantity of labor to fall. b. and the equilibrium quantity of labor to rise. c. to rise and the equilibrium quantity of labor to fall. d. to fall and the equilibrium quantity of labor to rise.arrow_forwardWhich of the following correctly explains the effect of a variable on the labor demandāĀ curve? A. If human capital increasesā, then we will move up the labor demand curve. B. If the price of the product increasesā, then the labor demand curve will shift to the left. C. If the number of firms in the market increasesā, then the labor demand curve will shift to the right. D. If the wageā increases, then the labor demand curve will shift to the right.arrow_forward
- wheat is the main input in the production of flour. all else equal, if the price of wheat decreases, what would we expect?arrow_forwardWhich of the statement is FALSE? A. An increase in the relative price of good X will increase the real price of the factor that is used intensively in the production of good X. B. A decrease in the relative price of good X will decrease the marginal productivity of the factor that is used scarcely in the production of good X. C. A decrease in the relative price of good X will increase the inverse of the relative factor price that is used in the production in good X. D. A decrease in the relative price of good X will increase the marginal productivity of the factor that is used intensively in the production of good X.arrow_forwardEconomics: Labor Economics Question: 1 If unskilled labor and robotics are substitutes in production a decrease in the price of robotics is predicted to a. decrease the demand for unskilled labor if the scale effect outweighs the substitution effect. b. decrease the demand for unskilled labor if the substitution effect outweighs the scale effect. c. unambiguously increase the demand for unskilled labor. d. unambiguously decrease the demand for unskilled labor. Ā Question: 2 Assuming capital is fixed in the short run and variable in the long run what would likely happen to wages in the short and long run following a wave of immigration? a. a large decrease in the short run, followed by a smaller decrease in the long run b. a small decrease in the short run followed by a larger decrease in the long run c. an increase in the short run followed by a large decrease in the long run d. a decrease in the short run followed by an increase in the long run Ā Question: 3 Which of the followingā¦arrow_forward
- The information below is for a competitive labor market. A. Calculate the value of the marginal product of labor at X. B. Find the equilibrium wage. C. Find the equilibrium quantity of labor employed.arrow_forwardFor each of the following determine the impact on the demand or the supply of labor and the effect on the equilibrium wage and quantity of labor employed. a. An increase in the price of capital.Ā Ā Ā Ā Ā Ā Ā Ā Ā b. A union is formed which uses collective bargaining to obtain higher wages for its members.Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā c. The marginal productivity of workers rises.Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā d. People desire leisure more than ever before (e.g. it is Christmas Day).Ā Ā Ā Ā Ā Ā Ā e. The wages offered in other labor markets requiring similar skills are now offering substantially higher wages.Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā f. The fringe (non-monetary) benefits offered in this market have increased substantially.Ā Ā Ā Ā Ā Ā Ā Ā Ā g. The government has just adopted an "open-door' immigration policy?arrow_forwardWhich of the following causes a rightward shift in the demand for labor in the market for cars? a. The price of motorbike (a substitute good) increases. b. The price of car increases. Car manufactures purchase and install labor augmenting car manufacturing equipment. All of the above C. d.arrow_forward
- 1. factor markets? take an example 2. changes of labor supply and labor demand? take an example 3.Optimal choice of factors in perfectly competitive factor markets? take an examplearrow_forwardWhich would decrease the demand for a particular type of labor? An increase in the prices of the resources that are complements to that type of labor An increase in the wages of that type of labor X An increase in the demand for the products produced by that type of labor A decrease in the prices of those resources that are complements for that type of laborarrow_forwardYou publish a magazine for calculator collectors. To produce and distribute this magazine, you use a number of inputs: ā¢ computers labor . ŃŠ°per ā¢ postage ā¢ staplers What is the impact on the market, if the price of labor goes down ? Choose one: O A. The demand for the magazine shifts to the right, and the supply curve shifts to the left. The equilibrium price rises, but there is an unknown change in the equilibrium quantity. O B. The demand for the magazine does not change, and the supply curve shifts to the left. The equilibrium price rises, but the equilibrium quantity falls. O C. The demand for the magazine does not change, and the supply curve shifts to the right. The equilibrium price falls, but the equilibrium quantity rises. O D. The demand for the magazine shifts to the left, and the supply curve shifts to the right. The equilibrium price falls, but there is an unknown change in the equilibrium quantity.arrow_forward
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