QUESTION 1 The value of the marginal product of labor a. increases when the pric

Question

QUESTION 1 The value of the marginal product of labor a. increases when the price of output decreases. b. is the firm's demand for labor O c, equals the marginal product of labor divided by the wage rate. d. All of the above are correct. QUESTION 2 The owners of capital resources are compensated according to the 0 a. value of the marginal product of capital. O b. purchase price of the capital stock. O c. absolute level of production of final goods and services. O d. marginal product of capital. QUESTION 3 Which of the following best illustrates the concept of "derived demand?" a. An increase in the wages of auto workers will lead to an increase in the demand for robots in automobile factories. b. An automobile producer's decision to supply more cars will lead to an increase in the demand for automobile production worken c. An increase in the price of gasoline will lead to an increase in the demand for small cars. d. An automobile producer's decision to supply more minivans results from a decrease in the demand for station wagons QUESTION 4

Explanation / Answer

1) Option b is correct (Marginal product of labour is the firm's demand for labour)

2) Option a is correct (Compensation to the owners of capital resources is same as the value of MPK)

3) Option b is correct (Demand for automobile production workers is derived from the producer's decision/demand for more cars)

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