What can cause the demand curve for labor to shift? Explain
What will be an ideal response?
The demand curve for labor is the marginal revenue product curve, which is marginal physical product multiplied by marginal revenue. For a perfectly competitive firm, marginal revenue equals price. Whenever the product price changes, the demand curve for labor shifts. Whenever marginal physical product changes due to changes in productivity, the demand curve for labor shifts. The changes in the prices of related factors (substitutes and complements) will also shift demand. The demand for labor is a derived demand, so an increase in the demand for the product produced causes the demand for labor and other variables inputs to change.
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If the absolute value of the price elasticity of demand for cell phone service is 3, then if the price of cell phone service increases by 1%, quantity demanded would:
A. decrease by 3%. B. increase by 3%. C. increase by 0.33%. D. decrease by 0.33%.
If the government sets a minimum wage which is more than the equilibrium wage, the firms tend to demand more labor
a. True b. False Indicate whether the statement is true or false
Since a union represents individuals rather than firms, it cannot be considered a monopoly.
Answer the following statement true (T) or false (F)
A carbon tax is an example of:
A. a Coase theorem solution. B. a Coase tax. C. a Pigovian tax. D. a market failure.