Economics Ch 11 Quiz

Topics: Supply and demand, Wage, Employment / Pages: 12 (2765 words) / Published: Apr 1st, 2012
Marginal [revenue] product
The increase in a firm's total revenue resulting from hiring an [additional] unit of labor or other variable resource.

Demand curve for labor
A curve showing the different quantities of labor employers are willing to [hire] at [different] wage rates in a given time period, ceteris paribus. It is equal to the marginal revenue product of labor.

Derived demand
The demand for labor and other factors of production that depends on the [consumer] demand for the final goods and services the factors produce.

Supply curve of labor
A curve showing the different quantities of labor [workers] are willing to offer employers at different wage rates in a given time period, ceteris paribus.

Human capital
The [accumulation] of [education], training, [experience], and health that enables a worker to enter an occupation and be productive.

Collective bargaining
The process of [negotiating] labor contracts between the union and management concerning wages and working conditions.

This chapter begins with a discussion of how the forces of supply and demand in a competitive labor market determines the wage rate. The firm's demand curve for labor is the firm's marginal revenue product, MRP, curve. The supply curve of labor is the relationship between the wage rate of labor and the quantity of labor supplied in the market. As a product's price is determined, the equilibrium wage rate is established by the intersection of the labor market supply and demand curves. Labor unions can increase the wage rate by increasing the demand for labor, decreasing the supply of labor, or collective bargaining.

If more and better technology is used for producing wheat in the United States than in a lesser-developed country, then the: Selected Answer: MRP of the U.S. workers will be lower than the MRP of the workers in the lesser-developed country.
Correct Answer: MRP of the U.S. workers will be higher than the MRP of the workers in the lesser-developed

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