71.Why the value of marginal product equal to the marginal : 1413870
71.Why is the value of marginal product equal to the marginal revenue product under perfect competition in the product market?
a.Because price is equal to average revenue
b.Because price is equal to average cost
c.Because marginal revenue is equal to marginal cost.
d.Because price is equal to marginal revenue
e.Because average revenue is equal to average cost
72.A firm that was initially a monopsonist but has to buy from a competitive resource market all of a sudden will:
a.buy more amount of resources and pay a higher price for these resources.
b.buy the same amount of resources and pay a higher price for these resources.
c.buy less amount of resources and pay a lower price for these resources.
d.buy less amount of resources and pay a higher price for these resources.
e.buy more amount of resources and pay a lower price for these resources.
73.Which of the following statements is not true?
a.Assuming a perfectly competitive labor market, a firm selling in a monopolistic product market will have a lower marginal revenue product curve than a firm in a perfectly competitive product market.
b.The intersection of market-labor supply with market-labor demand establishes equilibrium in a perfectly competitive labor market.
c.In monopsonistic labor markets, an individual firm faces a positively sloped labor-supply curve.
d.In a perfectly competitive labor market, an individual firm can hire as many workers as it needs at the equilibrium wage rate
e.In a monopsonistic labor market, marginal revenue product is equal to the value of marginal product.
74.The value of the marginal product of a resource is equal to:
a.the marginal revenue of the firm, if the product market is perfectly competitive.
b.the market price of the product divided by the price of the resource.
c.the market price of the product divided by the marginal product of the resource.
d.the marginal revenue product of the resource, if the product market is perfectly competitive.
e.the marginal product of the resource divided by the price of the resource.
75.Which of the following statements brings out the relationship between the value of marginal product (VMP) and the marginal revenue product (MRP)?
a.They are the same for a firm selling in a perfectly competitive market structure.
b.They are the same for a firm purchasing inputs in a perfectly competitive market structure.
c.VMP is greater than MRP when a firm is perfectly competitive in the product market.
d.VMP is less than MRP when a firm is perfectly competitive in the product market.
e.They are same when a firm is a monopolist.
76.Earnings of a resource is termed as economic rent if:
a.it has a perfectly elastic demand.
b.it has a perfectly elastic supply.
c.it has a perfectly inelastic supply.
d.it has a perfectly inelastic demand.
e.it has no demand.
77.If a resource has perfectly elastic supply curve then its income is termed as:
b.rental rate of capital.
78.If the elasticity of supply of a resource is greater than zero but less than infinity, its income will comprise of:
a.only economic rent.
b.only transfer earnings.
c.salaries and traveling allowances.
d.both economic rent and transfer earnings.
e.salaries, traveling allowances, as well as other incentives.
79.If a resource can be put to a single use and has no alternative uses then:
a.economic rents are zero.
b.transfer earnings are maximized.
c.total earnings are zero.
d.all earnings are economic rents.
e.all earnings are transfer earnings.
80.The more inelastic the supply of a particular resource:
a.the higher are its transfer earnings.
b.the higher is its economic rent.
c.the higher are its total earnings.
d.the higher is the elasticity of demand for the resource.
e.the lower is the elasticity of demand for the resource.
81.Transfer earnings of a factor is equal to its:
82.If a person is earning $80,000 per year as a dentist and could earn at most $45,000 per year doing something else, his transfer earnings are ____, whereas his economic rent is ____.
NARRBEGIN: Scenario 14.1
A worker in Firm A earns an income of $5,000 per month. He has been offered a job in Firm B where he will be paid a salary of $7,000 per month.
83.Refer to Scenario 14.1. If the worker joins Firm B, his opportunity cost is:
d.more than $5,000 but less than $7,000.
e.less than $2,000.
84.Refer to Scenario 14.1. If the worker joins Firm B, his economic rent is:
c.less than $7,000 but more than $2,000.
e.less than $2,000.