Identify and define the term used to describe how consumer demand affects the demand curve for labor, and provide an example.
What will be an ideal response?
Answers will vary but should include a discussion of derived demand. When a
consumer product or service rises in popularity, it increases the demand for the factors
of production used to produce it. This demand is called “derived demand.” For example,
an increase in the popularity of a television ballroom dance competition increases the
number of people interested in learning how to dance and therefore the demand for
instructors at a dance studio.
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A firm chooses its profit-maximizing quantity of capital by
A) examining the total cost of capital equipment. B) comparing the price of capital with the price of labor. C) comparing the marginal revenue product of capital with the rental price of capital. D) determining the rate at which the firm can borrow funds to purchase plant and equipment.
All of the following are reasons for immigration to a foreign country, except that:
a. the domestic country may be politically repressive. b. there is an abundance of employment opportunities in the domestic country. c. the domestic country is economically stagnant. d. there is no scope for upward mobility in the domestic country. e. there are religious prosecutions.
Which of the following is true in the circular flow diagram?
a. Household savings flow into the factor market, and investment flows to foreign economies. b. Household savings flow into financial markets, and investment flows back to households. c. Household savings flow into financial markets, and investment flows into product markets. d. Household savings flow into foreign economies, and investment flows into financial markets.
Which is the most accurate statement?
A. Collective bargaining negotiations usually end as a strike. B. Most strikes cause devastating economic disruption. C. The firm with the least ability to withstand a strike would be a service firm.