Figure 18-3 -Refer to Figure 18-3.Assume That W₁

question 108

Multiple Choice

Figure 18-3

-Refer to Figure 18-3.Assume that W₁
= $20 and W₂
= $18 and that the market stays in equilibrium.What would happen to the marginal product of labour if the labour supply curve shifts from S₁ to S₂

• A)The shift decreases the value of the marginal product of labour by more than $2.
• B)The shift decreases the value of the marginal product of labour by $2.
• C)The shift increases the value of marginal product of labour by more than $2.
• D)The shift increases the value of the marginal product of labour by $2.

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Definitions:

Economic Profit

The distinction in a corporation's gross income versus its overall charges, factoring in both apparent and assumed costs.

Zero Economic Profit

A situation where a company's total revenues exactly equal its total costs, implying normal profit but no economic profit above that.

Competitive Price-searcher Market

A market structure where companies have some control over the prices they charge but must also consider the prices set by their competitors.

Economic Profits

Profits calculated by deducting both the explicit and implicit costs from the total revenues, differing from accounting profits by considering opportunity costs.