Y13 Micro Chapter 4 Last Lesson Quiz

In a neoclassical competitive labour market, the demand curve for labour is given by which one of the following?

• Marginal revenue product

• Total physical product

• Marginal physical product

• Total revenue product

A monopsony type of market failure is said to occur for which one of the following?

• Suppliers of labour have market power

• Suppliers of products have market power

• Buyers of products have market power

• Buyers of labour have market power

Which one of the following describes a state of the labour market which is most likely to be linked to a lower wage for those employed?

• Bilateral monopoly

• Strong trade unions

• Monopsony

• Natural monopoly

A labour market structure in which the marginal cost of labour curve will lie above the average cost of labour curve...

• Monopsony

• Perfectly competitive labour market

• Perfect competition

• Oligopoly

The addition to total revenue from employing the last person is best described as...

• Marginal physical product

• Marginal revenue

• Marginal revenue product

• Marginal utility

When economists refer to labour demand as a derived demand, they mean

• Its demand is derived from the demand for the good or service workers contribute to producing

• Its demand is found by taking the first derivative of the total revenue function

• Its demand is derived from the historical precedent of compensation for comparable jobs

• Its demand is derived from supply

Firms' primary objective is often

• Output maximisation

• Utility maxmisation

• Profit maximisation

• Respect maximisation

In economic theory with perfect information models, the profit maximising output occurs where

• Average revenue equals average costs

• Marginal revenue equals marginal costs

• A firm’s customer goodwill is maximised

• Total revenue equal total costs

The Marginal Product of Labour (MPL) represents the

• Additional sales generated by increasing labour by one unit

• Additional output generated by increasing labour by one unit

• Additional output generated by increasing capital by one unit

• Additional output generated by increasing both labour and capital such that the factor proportions used in the production process are unaltered

A critical assumption economists make about the relationship between the quantity of labour hired and the marginal product of labour is that

• The MPL increases as additional units of labour are added to the production process

• The MPL diminishes to an irreducible minimum, then increases (i.e., the MPL curve is u-shaped)

• The two variables are totally unrelated

• The MPL diminishes as additional units of labour are added to the production process