How does the price of the final good for which labor is used to produce affect the demand for labor?
What will be an ideal response?
The demand for labor varies directly with the price of the final good that it is used to produce. If there is an increase in the price of the final good, the value of the marginal product of labor increases, which will cause firms to demand more workers. Hence, the demand curve for workers shifts to the right. Conversely, if there is a decrease in the price of the final good, the value of the marginal product of labor decreases and this causes firms to demand fewer workers, and the demand curve for workers shifts to the left.
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Indifference curves describe ________
A) the relationship between current and future income B) the utility received by an individual consumer C) the relationship between utility and income D) productivity levels
Suppose that C = $700, I = $200, G = $200, NX = $100, and that the money supply is equal to $400. Based upon these assumptions, velocity is equal to ________________. If consumption and velocity both rise beyond their initial levels, then it follows that another component of spending ___________ necessarily fall
A) 3; must B) 3; does not C) 4; must D) 4; does not
Holding other factors constant, if the education and skills of the typical worker in an economy increases, then the real wages of workers will ________ and employment of workers will ________.
A. decrease; increase B. decrease; not change C. increase; decrease D. increase; increase
Which of the following statements is true?
A) A stock can possibly pay dividends forever, but bonds have a fixed number of payments. B) Differences of opinion about a bond's future may vary considerably but there is less difference about a stock's future. C) The future growth of a stock is more certain than the payments of a bond. D) Bonds represent partial ownership in a firm but stocks do not.