How is the demand for labor derived from the value of marginal product of labor?
What will be an ideal response?
The demand for labor is determined by the value of marginal product of labor. To maximize its profit a firm hires the number of workers that sets the wage rate equal to the value of marginal product of labor. When the wage rate changes, the firm changes the quantity of labor it demands so that the (new) wage rate equals the value of marginal product. So when the wage rate changes, the firm moves along its value of marginal product of labor curve to determine the quantity of labor demanded, thereby making its value of marginal product of labor curve its demand for labor curve.
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Natalie can produce 6 shirts in a day, or cook three meals. Her opportunity cost of producing a shirt is 2 meals
Indicate whether the statement is true or false
Consider a stock with a 50 percent probability of zero net earnings and a 50 percent probability of net earnings equal to $20 per share each year continuously in the future. Furthermore, assume that people are risk averse. That is, they will have to be compensated for uncertainty accompanying variation in their future wealth. If the interest rate were 5 percent, how much would people be willing
to pay for a share of this stock? a. $10 b. $200 c. less than $200 d. more than $200 e. $400
The rate at which prices in general are increasing is called the:
A. inflation rate. B. standard of living. C. trade balance. D. unemployment rate.
When the government institutes a target price,
A) a surplus is created. B) consumers must pay the target price. C) the farmer receives a deficiency payment if the market price is below the target price. D) the farmer receives a deficiency payment if the market price is above the target price. E) all of the above