Micro Unit 5

Question 1

the resource market

Answer 1

any place where individuals supply their resources to businesses

Question 2

Demand for labor

Answer 2

the different quantities of workers that businesses are willing and able to hire at different wages

Question 3

supply for labor

Answer 3

the different quantities of individuals that are willing and able to sell their labor to businesses at different wages

Question 4

derived demand

Answer 4

the demand for resources is derived from the products they help produce

ex. if demand for houses increases then the wage and quantity of carpenters will increase

Question 5

MRP

Answer 5

Marginal revenue product- the additional revenue generated for hiring one additional worker

Question 6

MRC

Answer 6

Marginal resource cost- the additional cost of hiring one additional worker

MRC=wage in a perfectly competitive labor market (and is constant)

Question 7

Shifters of Labor Demand

Answer 7

1. changed in demand for product
2. changes in productivity of the resources (workers)
3. changed in price of other resources

Question 8

shifters of labor supply

Answer 8

1. number of qualified workers
2. government regulation/licensing
3. personal values regarding leisure time and societal roles

Question 9

minimum wage

Answer 9

the minimum amount firms have to pay their workers. represented on a market graph by a price floor;

Raising minimum wage decreases employment

Question 10

why is the MRP curve shaped like an upside down check mark?

Answer 10

the law of diminishing marginal returns