Question

A firm is unlikely to hire a worker if:

A. the additional output a firms gets by hiring the worker is greater than his or her wage.

B. there are diminishing marginal returns to labor.

C. the minimum wage set by law is less than the equilibrium wage in the market.

D. the additional revenue generated by hiring the worker is less than his or her wage.

In a competitive labor market, the equilibrium wage rate is determined by:

A. labor demand and labor supply.

B. employees.

C.employers.

D. government regulation.

Assume that the average male wage rate is 20 percent higher than the average female wage rate. One can infer that:

A.customers overvalue male employers, so employers pay males more.

B.this is evidence of discrimination only if all factors affecting productivity are equal.

C.this is evidence of discrimination because females should be paid the same as males.

D.employers undervalue female employees, so they're able to pay them less.

The demand for labor is described as a derived demand because

A. it is derived from the demand for products that use labor in the production process.

B.it is derived by producers seeking to make profits by starting new businesses.

C.it is derived by workers seeking to earn income to fund the consumption of goods and services.

D.it is derived from government institutions which rely on labor markets for the purpose of raising tax revenue.

Answer 1

Correct choice is option D. The form will compare the wage rate with the marginal revenue product. This is the revenue generated by the additionally hired labor unit. as long as the revenue is greater than the wage rate the workers will continued to be hired

Option A is correct. forces of labour demand and labour supply determine the market wage rate in competitive market for labour

Option B is correct. workers are paid according to their productivity and if the productivity is same their compensation should also be same

Option A is correct. Labour produces different products and prices of those products determine the marginal revenue product for labour and hence their wage rates.