Solved Marginal Productivity Theory (Factor Pricing

Marginal Productivity Theory MCQs for Competitive Exams

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Topic Notes: Marginal Productivity Theory

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What is the expected impact on the market for capital in the fishing industry if the supply of fishermen decreases?

increase the demand for fishing boats and decrease rental rates on fishing boats

decreases the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry

decreases the demand for fishing boats and increase rental rates on fishing boats.

reduces their wage, and increases employment in the fishing industry

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How does a decline in the market demand for fish impact the labor market for fishermen?

decreases the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry

increases the value of the marginal product of fishermen, increases their wage, and increases employment in the fishing industry

increases the value of the marginal product of fishermen, increases their wage, and decreases employment in the fishing industry

decreases the value of the marginal product of fishermen, reduces their wage, and reduces employment in the fishing industry

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What are the likely long-term consequences of an increase in real wages on capital usage and input demand?

encourage the use of less capital, reduce demand for all inputs

encourage the use of more capital increase demand for all inputs

encourage the use of more capital in the long run, reduce demand for all inputs

encourage the use of less capital reduce demand for all inputs

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What is the correct mathematical formula for the Marginal Revenue Product of Labor (MRPL)?

MPL/PX

PX/MPL

MPL + PX

(MPL) (PX)

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Why does an individual firm's demand curve for a factor of production slope downward?

Slopes downward due to the factor’s diminishing marginal product

slopes upward due to the factor’s increasing marginal product

Slopes downward because an increase in the production of output reduces the price at which the output can be sold in a competitive market, thereby reducing the value of the marginal producing the value of the marginal product as more of the factor is use

is perfectly elastic (horizontal) if the factor market is perfectly competitive

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How is the marginal revenue product of capital defined?

The changing value of the capital stock

The change in a company's share price

The additional value of output from using more capital

The change in a company's balance sheet when it acquires new plant

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Which of the following is an unlikely outcome resulting from a decrease in the supply of farm tractors?

a decrease in the value of the marginal product of tractors

a decrease in farmland rental rates

a rise in farm workers' wages

a rise in tractor rental rates

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Which factors contribute to the complexity of determining the marginal productivity of labor?

concerns wage rates and labor supply

is a political as well as economic issue

is complicated by overlapping labor markets

all of the above

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If a conflict destroys a significant portion of the population but leaves capital stock intact, what is the likely impact on equilibrium wages and rental rates?

Wages fall, and rental rates rise

Wages rise, and rental rates rise

Wages fall, and rental rates fall

Wages rise, and rental rates fall

Report

How is a competitive firm's demand for capital represented in relation to its value-of-the-marginal-product curve?

demand curve for capital

marginal cost curve

supply curve of capital

production function

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Marginal Productivity Theory MCQs for Competitive Exams

Marginal Productivity Theory MCQs for Competitive Exams

Topic Notes: Marginal Productivity Theory

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