Question 21

1. 21) How would an increase in the demand for labor occur:
4. a. when there is an increase in labor productivity
7. b. when there is an increase in the demand for the product labor produces
10. c. when there is an increase in the supply of labor
13. d. both (a) and (b)

3 points

Question 22

1. 22) What determines the quantity supplied of labor?
4. a, the wage rate
7. b. the demand for labor
10. c. the marginal revenue product of labor
13. d. the marginal revenue product of capital

3 points

Question 23

1. 23) What will lead to an increase in the wage rate?
4. a. a decrease in the demand for labor
7. b. an increase in the demand for labor
10. c. an increase in the supply of labor
13. d. a decrease in demand for the product labor produces

3 points

Question 24

1. 24) What will lead to a decrease in the wage rate?
4. a. an increase in the demand for labor
7. b. an increase in the supply of labor
10. c. a decrease in the supply of labor
13. d. an increase in demand for the product labor produces

3 points

Question 25

25) Efficiency wage theory states:

a, it is efficient to pay labor the lowest wage rate possible

b. it is efficient to only pay labor the market wage rate

c. it is efficient to supply labor with the least amount of fringe benefits as possible

d. it is efficient to pay labor a higher than average wage rate (including benefits) as this will elicit a better work effort from labor and increase the firm's profits