Question

1.Which of the following occurs when wages increase? a. The number of workers employed by the government increases b. The quantity of labor supplied decreases c. The quantity of labor demanded decreases d. The minimum wage falls 2.Which of the following is true regarding the labor market? a. Businesses supply labor in the labor market b. Individuals demand labor in the labor market c. The government sets wages in the labor market d. Businesses demand labor in the labor market 3.The supply for labor shows a(n) ______ relationship between wages and the number of workers that want a job. a. direct b. inverse c. limited d. temporary 4.Which of the following will most likely increase the wages of car mechanics? a. A decrease in the number of qualified car mechanics b. A decrease in the demand for cars c. An increase in the number of schools that train car mechanics d. An increase in the number of people that fix their own cars 5.A decrease in the demand for carpenters will a. increase the demand for wood b. increase the number of people that want to become carpenters c. increase the number of carpenters employed by the government d. decrease the wages of carpenters 6.Education and training will result in all the following EXCEPT a. higher wages for workers b. more productivity c. a decrease in human capital d. innovation 7.The additional revenue generated from hiring an additional worker is called a. the marginal revenue product b. the marginal resource cost c. the law of diminishing marginal returns d. the law of diminishing marginal utility

Answer 1

1.c. The quantity of labor supplied decrease.

2.d. Businesses demand labor in the labor market.

3.b. Inverse.

4.a. A decrease in the number of qualified car mechanics.

5.d. Decrease the wages of carpenters.

6.a. Higher wages for workers.

7.a. Marginal revenue product.

Explanation:

1. The demand for labour will decrease because

• Increasing wages increases the cost value of businesses which produces the products, and leading to hike in their selling prices, due to which consumers will buy now lesser.

• A increase in the wages can also make labour even more expensive relative to the capital so businesses can substitute capital for labour.

This means that less labour will be used.

2. The labor market is defined as the job market in which employees such as workers provide the supply to the market and employers like businesses provide the demand to the market.

3. As the wages increases,number of workers decreases and vice versa thus showing an inverse relationship between them.

4. A decrease in the number of qualified car mechanics will eventually increase the demand for them and hence it will lead to increasing wages of car mechanics.

5. A decreasing demand for carpenters would lessen the need of carpenters, leading to decrease the wages of carpenters.

6. Education and training might lower the wages of workers since the need and demand of workers get decreased.

7. The change in total profits to the change in the no. of inputs provided is defined as Marginal Revenue Product also known as MRP.Theoretically, it is the additional revenue generated during hiring an additional worker which is equivalent to usage of one more units of the input .