9) A decrease in the supply of labor (leftward shift in the supply curve) to the
ID: 2440169 • Letter: 9
Question
9)
A decrease in the supply of labor (leftward shift in the supply curve) to the market for teachers could be caused by which of the following?
(2pts)
A decrease in the wage paid to teachers.
An increase in the wage paid in a competing occupation.
An improvement in the nonpecuniary aspects of teaching.
all the above
none of the above
10)
Which of the following is listed in the textbook as a condition necessary for everyone to receive the same pay?
(2pts)
The demand for every type of labor is the same.
There are no special nonpecuniary aspects to any job.
All labor is ultimately homogeneous and can costlessly be trained for different types of employment.
All labor is mobile at zero cost.
All the above.
None of the above.
11)
If VMP > MRP, we can conclude which of the following?
(2pts)
The firm is not maximizing profits.
The firm has monopoly power in the product market.
The firm has monopsony power in the factor market.
All the above.
None of the above.
12)
Which of the following statements correctly expresses the idea behind the positive version of Marginal Productivity Theory (as found in the PowerPoint lecture slides)?
(2pts)
If a CEO is 400 times as productive as a production line worker, then the CEO should be paid 400 times as much.
None of the other answers is correct.
Since factor and product markets are seldom if ever perfect, workers are almost never paid a wage equal to their value of marginal product.
Firms in competitive or perfect product and factor markets pay factors their marginal revenue products.
People who earn very high salaries almost never deserve them.
Explanation / Answer
9) an increase in the wage paid in the competing occupation.
When wage in the competing occupation increases, workers move to that occupation which reduces supply of labor in teaching market.
10) all of the above.
When all conditions mentioned are met, there is no reason for wage differential in the labor market.
11) the firm has monopsony power in the factor market.
When firm has monopsony power it pays lower wages to workers than in perfect competition. This makes marginal revenenue product less than value of marginal product of labor.
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