According to the marginal productivity theory of income

According to the marginal productivity theory of income,

			the greater the quantity of resources owned by an individual, the greater his incentive to increase productivity and his income.
			the average income received by an individual who supplies resources is influenced by the resources owner’s marginal productivity.
			the income received by an individual who supplies labor services equals the incremental benefit generated to the firm by that individual’s labor.
			the income received by an individual who supplies labor services equals the profit generated to the firm by that individual’s labor.

	Points Received:	1 of 1
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Scenario: In academia, professors in some disciplines receive higher salaries than others. For example, professors teaching in business schools receive higher salaries than professors in the English department. Suppose in Unity College, assistant professors in the business school earn $W_bwhile assistant professors in the English department earn $W_e < W_b. Now suppose the government passes comparable worth legislation that requires academic institutions to pay all faculty the same salaries.

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Following the passage of comparable worth legislation, Unity College responds by placing salaries at $W_abetween the two existing salaries. Which of the following is the result of the legislation?

			The supply of English professors increase and the supply of business professors decrease.
			The demand for English professors decrease and the demand for business professors increase.
			There will be a surplus in the market for English professors and a shortage in the market for business professors.
			There will be a surplus in the market for English professors and the market for business professors will not be affected.

	Points Received:	1 of 1
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Question 3.

Question :

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If, hiring another worker would increase output by three units per hour, then to maximize profits the firm should

			not change the number of workers it currently hires.
			not hire an additional worker.
			hire another worker.
			There is not enough information to answer the question.

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Question 4.

Question :

Table 16-2

Refer to Table 16-2. The marginal profit from hiring the second unit of labor is

			$4,200.
			$1,960.
			$1,800.
			$1,450.

	Points Received:	1 of 1
	Comments:

Question 5.

Question :

Worker discrimination occurs when

			workers refuse to perform risky tasks.
			workers refuse to work with persons of a different race.
			customers refuse to buy products produced by a racially diverse workforce.
			employers pay different employees different wages based on race.

	Points Received:	1 of 1
	Comments:

Question 6.

Question :

The marginal revenue product of capital is

			the cost to the firm of renting an additional unit of capital.
			the change in the firm’s revenue as a result of employing one more unit of capital, such as a machine.
			the economic rent received by hiring an additional unit of capital.
			the revenue generated by substituting capital for labor in the production process.

	Points Received:	1 of 1
	Comments:

Question 7.

Question :

Which of the following is a reason why some firms donot use commission pay?

			It gives workers incentive to produce more.
			It increases firm profits.
			It is difficult to measure the output and attribute output to a particular worker.
			The best workers stay and less productive workers leave.

	Points Received:	1 of 1
	Comments:

Question 8.

Question :

Which of the following statements about commission systems of compensation is false?

			They increase the risk to workers because sometimes output declines for reasons not connected to the worker’s effort.
			During sluggish periods, an employer’s payroll expenses will decline along with sales.
			If workers are paid on the basis of the number of units produced, they may become less concerned about quality.
			The lack of income stability will induce the more productive workers to leave in search of more secure employment.

	Points Received:	1 of 1
	Comments:

Question 9.

Question :

Which of the following is a reason why it is difficult to estimate the extent of economic discrimination in the labor market?

			Employers who discriminate are likely to do so in overt ways such as awarding some workers with benefits-in-kind.
			Ultimately, employers who discriminate cannot remain profitable.
			Employers who discriminate pay an economic penalty.
			Differences in wages can be attributed to many other factors as well, such as differences in productivity and preferences.

	Points Received:	1 of 1
	Comments:

Question 10.

Question :

An increase in the supply of capital, which is a complement to labor, will lead to

			a decrease in the quantity demanded of labor.
			an increase in the demand for labor.
			a decrease in the demand for labor.
			an increase in the quantity demanded of labor.

	Points Received:	1 of 1
	Comments:

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