The Figure Given Below Represents Equilibrium in the Labor Market

question 39

Multiple Choice

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6
In the figure,
D = MRP implies demand for labor = Marginal Revenue Product
MFC represents Marginal Factor Cost curve
S represents the supply curve of labor

-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.

Identify the conditions under which price ceilings and floors become effective or ineffective.

Understand the implications of market interventions for consumers and producers.

Explore various nonprice rationing mechanisms and their efficiency in resource allocation.

Comprehend the broader economic cost concepts including opportunity cost and economic choice.

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