____ 28. Refer to Figure 18-2. What happens to the profit earned by apple produc
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Question
____ 28. Refer to Figure 18-2. What happens to the profit earned by apple producers and to the wage earned by apple pickers when the price of apples rises?
a.
Profit will rise. and the wage will fall.
b.
Profit will fall, and the wage will rise.
c.
Both profit and the wage will rise.
d.
Both profit and the wage will fall.
Figure 18-4
____ 29. Refer to Figure 18-4. Which of the following factors could possibly explain the shift of the labour demand curve from D1 to D2?
a.
a change in workers’ attitudes toward the work–leisure tradeoff
b.
decreases in wages in other labour markets
c.
an increase in the price of firms’ output
d.
new technology that replaces workers
____ 30. With regard to capital, which of the following is it important to distinguish between?
a.
the supply price of capital and the demand price of capital
b.
the rental price of capital and the purchase price of capital
c.
firms and the demanders of capital
d.
the suppliers of capital and the owners of capital
a.
Profit will rise. and the wage will fall.
b.
Profit will fall, and the wage will rise.
c.
Both profit and the wage will rise.
d.
Both profit and the wage will fall.
Wage Wa D2 D1 Quality of LabourExplanation / Answer
28. The figure 18-2 is not provided so I am not able to ans this question.
29. Labour demand curve shift from D1 to D2 implies that the demand of labour increase but not because of wages ( as there is rightward shift in demand curve)
The correct ans is C) an increase in the price of firm's output.
It is so because the demand of labour is derived demand and as the price of the product increases the suppliers want to supply more (law of supply ) so they demand more labour to produce more.
Other options are incorrect as
A. Change in workers attitude does not effect the demand but it will effect the supply of labour.
B. If there is decrease in wages in other market then the demand of labour will fall in this market so leftward shift not rightward shift.
D. This also represent leftward shift of labour demand curve.
30. With regard to capital, it is important to distinguish between the rental price of capital and the purchase price of capital.
It is so because these prices are determined by somewhat different economic factors.
So correct ans is b)
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