Question

8.) Derived demand is exemplified in which of the following? a.) The salary of computer techs rise, resulting in a decrease in supply and an increase in demand. b.) The salary of computer techs fall, resulting in an increase in supply and a decrease in demand. c.) Consumers want computers, so producers raise the price of computers. d.) Consumers want faster computers, so technology firms invest in capital and labor. e.) None of the above 9.) Demand for capital a.) b.) c) d) e.) is a derived demand. is always greater for human than physical. is dependent on the interest rate. is modeled in the product market. is more elastic than the demand for land. 10.) Of the following factors, which will have a quantity that is likely to be less responsive to price changes? I. capital II. labor III. land a.) b.) C.) d.) e.) only ll only Ill only and Il only I, II, and III 11.) Marginal revenue product in a competitive market is equal to a.) marginal product multiplied by the product price. b.) product price divided by the marginal product. c.) marginal product divided by the marginal cost. d.) marginal product multiplied by marginal cost. e.) marginal product divided by the product price. 12.) A competitive firm pays their labor a wage of $10 an hour. Their product sales for $7. In order to achieve a marginal revenue product of $63 what must the marginal product of labor be?. a.) 5 b.) 6.3 c) 9 d.) 21 e.) 70 13.) For a profit maximizing firm in the factor market, the MRP curve and the demand curve a.) b.) c) d.) e.) are equivalent. both slope upward. both vertical in the short run. are horizontal in competitive market. are horizontal in an imperfect market. 14.) Marginal revenue product is best described by which of the following? a.) b.) c.) d.) e.) The total revenue that is generated after the marginal resource is employed. The resulting profit that is generated after the marginal resource is employed. The optimal amount of capital and labor that maximizes revenue. The change in costs after factoring how much an additional worker produced. The amount of revenue that the next employed resource brings to the firm.

Answer 1

Q 9. Demand for capital is a derived demand. option a

Q. 10. Land is less responsive to price change as it is difficult to increase or decrease it's supply. Option c

Q11. Marginal revenue product = Marginal product* price in a competitive market. Option a

Q12 MRP = P*Marginal product

Therefore, to achieve MRP = 63,

63 = 7*MP => MP = 9 option c

Q13. option a)

Q14 marginal revenue product is defined as the additional revenue that is brought in due to the addition of a new resource. Therefore option e)