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14 Cards in this Set

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  • Back

Marginal revenue product measures the

Amount by which the extra production of one more worker increases a firm's total revenue

When economists say that the demand for labor is a derived demand, they means that it is

Related to the demand for the product or service labor is producing

The MRP curve for labor

Is the firm's labor demand curve

If one worker can pick $30 worth of grapes and two workers together can pick $50 worth of grapes the

Marginal revenue product of the second worker is $20

Refer to the graph. A move from b to a along labor demand curve D1 would result from

An increase in the wage rate

Refer to the graph. Other things equal, an increase in labor productivity would cause a

shift from D2 to D3

Refer to the graph. Other things equal, an increase in the price of a complementary resource would cause a

shift from D3 to D2

Assume the price of capital doubles and, as a result, firms make no change in the relative quantities of capital and labor they employ. This implies that

Label is not readily substitutable for capital

On January 1, 2010, Alex deposited $5,000 into a savings account that pays interest of 5% compounded annually. If he makes no further deposits or withdrawals, how much will Alex have in his account on December 31, 2012 (3 years later)

$5,788

Present value, refers to the

Value today of a specific amount of money to be received in the future

If the interest rate is 15%, what is the future of value of $10,000 two years from now?

$13,225

If the interest rate is 10%, what is the present value of $25,000 received two years from now?

$20,661

If the interest rate is 5%, what is the present value of$10,000 received three years from now

$8,638

If the interest rate is 5%, what is the present value of$10,000 received three years from now?

$8,638