Prairie cabinets produces and sells custom kitchen cabinets. the firm has determined that if it hires 10 workers, it can produce 10 sets of cabinets per day. if it hires 11 workers, it can produce 12 sets of cabinets per day. it sells each set of cabinets for $2,000, and it pays each of its workers $200 per day. which of the following is correct?
a.
for the 11th worker, the value of the marginal product of labor is $400.
b. for the 11th worker, the value of the marginal product of labor is $4,000.
c. the firm should not hire the 11th worker since hiring this worker reduces profit.
d. in order to justify hiring the 11th worker the firm will need to raise the price of a set of cabinets.
2. the following table shows the number of calculators that can be assembled per week by various numbers of workers. if the price per calculator in a perfectly competitive product market is $8, how many workers would the firm employ if the weekly wage rate is $800?
quantity of labor # of calculators per week
0 0
1 200
2 360
3 480
4 560
5 600
a.
1
b.
2
c.
3
d.
4
3. factory workers who work the day shift earn less per hour than similarly-skilled factory workers who work on the night shift. the difference in pay is attributed to
a. the marginal product of labor.
b. the marginal product of capital.
c. diminishing marginal returns.
d. a compensating differential.
4. other things equal, a particular job will likely pay a higher wage if it involves
a.
danger to the worker.
b.
personal enjoyment for the worker.
c.
intellectual stimulation for the worker.
d.
all of the above are correct.
5. public school teachers are known to have low wages. this is probably because
a.
public school teacher jobs are easy.
b.
public school teachers are required to be college graduates.
c.
public school teachers need very little money to live.
d.
many people perceive the job of public school teacher to have a high element of personal satisfaction.
6. in recent years, the ratio of earnings of the typical u. s. college graduate to the earnings of the typical high school graduate without additional education has
a.
risen as the demand for skilled labor has increased relative to the demand for unskilled labor.
b.
risen as the demand for skilled labor has decreased relative to the demand for unskilled labor.
c.
fallen as the demand for skilled labor has increased relative to the demand for unskilled labor.
d.
fallen as the demand for skilled labor has decreased relative to the demand for unskilled labor.
7. which of the following statements is not correct?
a.
both the human capital theory and the signaling theory of education could explain why college graduates earn more than high school graduates.
b.
the signaling theory of education suggests that the ability to complete a college degree is correlated with the ability to perform well in the labor market.
c.
if the human capital theory of education is correct, a government policy that pays for additional schooling for all workers would not increase wages.
d.
if the signaling theory of education is correct, a government policy that pays for additional schooling for all workers would not increase wages.
8. which of the following statements is correct?
a.
compensating wage differentials reflect different skills of workers.
b.
efficiency wages are equal to the marginal productivity of workers.
c.
the signaling theory of education suggests that schooling does not affect worker productivity.
d.
the superstar phenomenon explains why more talented entertainers earn more than less talented entertainers.
9. if the demand curve for beef shifts to the right, then the value of the marginal product of labor for butchers will
a.
rise.
b.
fall.
c.
remain unchanged.
d.
rise or fall; either is possible.
labor
output
marginal product
of labor
value of marginal
product of labor
wage
marginal
profit
0
0




1
400
400
$1200
$400
$800
2
700
300
$ 900
$400
$500
3
950
250
$ 750
$400
$350
4
1050
100
$ 300
$400
-$100
10. refer to table . the price of output is:
a.
$1.
b.
$2.
c.
$3.
d.
$400.
11. refer to table above. how many workers should the firm hire?
a.
1
b.
2
c.
3
d.
4