Evaluate the statement: “There is no difference between the labor supply curve for the single competitive firm and the supply curve in a competitive market for labor.”
What will be an ideal response?
The statement is incorrect. The labor supply curve for the competitive firm is perfectly elastic at the market wage rate. The firm is usually small relative to the labor market and can employ all the workers it needs at the market equilibrium wage. In contrast, the supply curve for labor in the competitive market will be up sloping because the group of firms in the market must pay higher wages to attract the total number of workers they need in the industry. The higher wages are necessary to bid workers away from alternative employment or to draw them into employment when previously they were not working.
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Social cooperation by means of voluntary contracts and exchanges
A) cannot occur in a socialist economic system. B) cannot occur where government sets rules that restrict behavior. C) is easier to achieve when the laws of the society are clear and unchanging. D) is harder to achieve when the members of the society own very little material property in common.
The value of marginal product of labor is the change in
A) profit from hiring one more worker. B) output from hiring one more worker. C) total revenue from hiring one more worker. D) profit from producing one more unit of output.
The case of New Zealand, as described in the text, draws what simple conclusion regarding the country's international debt position?
What will be an ideal response?
The productivity growth rates of richer countries tend to be ____ than those of poorer countries
a. higher b. lower c. increasing faster d. decreasing faster