Question

1. In a labor market, marginal cost for a firm is ____________.

a. recruiting cost

b. education cost

c. wage

d. all of the above

2. In a labor market, marginal benefit for a firm is the __________.

a. price of one unit of the item

b. marginal product of labor

c. development around the factory

d. None of the above

3. Suppose that automation decreases marginal product of labor.

Then capital and labor are _________.

a. substitutes.

b. complements.

c. monopsonies.

d. monopolies.

4. In a perfectly competitive labor market, the equilibrium is determined by ___________.

a. Supply & Demand

b. Marginal Cost of Hiring & Demand

c. Marginal Cost of Hiring & Supply

d. Marginal Cost of Hiring & Demand & Supply

5. The minimum wage always ___________.

a. destroys jobs.

b. reduces involuntary unemployment.

c. has nothing to do with jobs.

d. None of the above

Answer 1

1.In the labor market wage rate is equal to the marginal cost.

Answer-C

2.Marginal product of labor is equal to the marginal benefit .

Answer-B

3.Capital and labor are substitutes in production.

Answer-A

4.Marginal cost of hiring is equal to the demand for Labor.

Answer-C

5.Minimum wage increases unemployment rate but only when it is binding.

Answer-Either A or D

D is more appropriate.