Factor Markets — Practice Set 1

The demand for labor is called 'derived demand' because:

Marginal revenue product of labor equals:

A profit-maximizing firm hires labor until:

If a worker's MRP is $25/hour and the wage is$20/hour, the firm should:

A competitive firm's labor demand curve is its ___ curve below ___ .

An increase in the price of the firm's output will:

Better training that raises workers' marginal product will:

If capital and labor are substitutes, a fall in the price of capital will:

The marginal factor cost of labor for a competitive buyer is:

A monopsonist hiring labor faces an upward-sloping supply curve, so its MFC is ___ the wage.