When the demand for automobiles is high, the demand for workers who build automo

Question

When the demand for automobiles is high, the demand for workers who build automobiles is high. This relation between the market for automobiles and the market for the labor that builds automobiles is why demand in a factor market is called:

A. the marginal productivity theory of income distribution.

B. a compensating differential.

C. a derived demand.

As the _____ of labor used in production increases, ceteris paribus, eventually the _____ will _____.

A. price; supply of labor; increase

B. quantity; marginal product of labor; fall

C. quantity; marginal product of labor; rise

Which example is a factor of production at a college?

A. the faculty

B. lab concentrations to use in experiments

C. scantron sheets

(Table: Workers and Corn Output) Examine the table Workers and Corn Output. Laura is a price-taking farmer who produces corn. Assume the wage rate for workers is $125 and the price per bushel of corn is $10. The table shows Laura's production function. Suppose Laura is employing seven workers. If she lets the seventh worker go and reduces employment to six workers, her profits will:

A. decrease by $970.

B. increase by $105.

C. increase by $90.

Explanation / Answer

c.a derived demand

b.quantity,marginal product labor,falls

c,the faculty(labor)

c.incease

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