1. For each supply cunvehe determinants of labor supply listed below, tell which
ID: 1122678 • Letter: 1
Question
1. For each supply cunvehe determinants of labor supply listed below, tell which direction the labor (3 points) rve will shift (LEFT or RIGHT): a. There is a large emigration from our country due to internal unrest. b. Silicon Valley companies offer all-day free cafeterias for their c. Women, who have been generally out of the labor force, enter the employees labor force in large numbers. 2. a. Write the formula for marginal revenue product of labor. (2 points) b. Write the formula for marginal revenue product of capital. (2 points) For each of the determinants of labor demand listed below, tell which direction the labor demand curve will shift (RIGHT/UP or LEFT/DOWN): (3 points) 3. a. Marginal physical product of labor (MPP) increases. b. The price of the product workers produce increases d. Demand for the product workers produce shift to the left. 4. Here is a picture of an initial equilibrium in a competitive labor market in a competitive product market, for the overall market. How will the market wage and employment level change IF WORKERS BECOME MORE PRODUCTIVE? (3 points) i) Draw the new curve ii) Does total employment increase or decrease? ii) Does the wage rate increase or decrease? Page 1 of4Explanation / Answer
1.
A.The labour supply curve will shift to the left due to people leaving the country.
B.Labour supply will shift to the right as labours are attracted by incentives.
C.Labour supply will shift to the left because women entering the labour force would increase the size of the labour force.
2a.MRPL=MR×MPL (Marginal revenue*Marginal product of labour)
b.MRPK=MR*MPK(capital)
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