1. Marginal resource cost is A) the increase in total resource cost associated w
ID: 1208104 • Letter: 1
Question
1. Marginal resource cost is
A) the increase in total resource cost associated with the production of one more unit of output.
B) the increase in total resource cost associated with the hire of one more unit of the resource.
C) total resource cost divided by the number of inputs employed.
D) the change in total revenue associated with the employment of one more unit of the resource.
2. Which of the following increases in labor demand is due to a change in the price of a related resource?
A) Software sales rise, thus increasing the demand for software developers.
B) Snowboarding increases in popularity, thus increasing the demand for the workers who make snowboards.
C) A decrease in the price of wood decreases the cost of furniture, thus increasing the demand for furniture workers.
D) A technological change increases output per worker in the computer industry, thus increasing the demand for computer workers.
3 The labor demand curve of a firm
A) will shift to the left if the price of the product the labor is producing falls.
B) is perfectly elastic if the firm is selling its product in a purely competitive market.
C) reflects a direct relationship between the number of workers hired and the money wage rate.
D) is the same as its marginal product curve.
Explanation / Answer
1. MArginal resource cost is the the increase in total resource cost associated with the hire of one more unit of the resource..
2. A decrease in the price of wood decreases the cost of furniture, thus increasing the demand for furniture workers.. This is because wooed is a resource, and a decrease in its price increases the cost of the furniture.
3. The labor demand curve of a firm will shift to the left if the price of the product the labor is producing falls. This is becuase when the price ofthe product falls, then fewer labor will be demanded by the curve.
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