Microeconomics: Theory and Applications with Calculus, 4e

Exercises

All exercises are available on MyEconLab; ${*}^{}=\text{answer}$ appears at the back of this book; $\mathbf{M}=\text{mathematical}$ problem.

1. Factor Markets 

1. 1.1 What does a competitive firm’s labor demand curve look like at quantities of labor such that the marginal product of labor is negative? Why?

2. *1.2 If a local government starts collecting an ad valorem tax of $\alpha$[&|alp|&] on the revenue of a competitive firm (and all other firms are located outside this jurisdiction), what happens to the firm’s demand curve for labor? (Hint: See Solved Problem 15.1 .)

3. 1.3 How does a fall in the rental price of capital affect a firm’s demand for labor in the long run?

4. 1.4 Oil companies, prompted by improvements in technology and increases in oil prices, are drilling in ...