IN CLASS 7 Factor Market Application Answer the next 4 question(s) on the basis of the following information. A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired; 32 when two workers are hired; 37 when three are hired; and 40 when four are hired. The farmer's product sells for $3 per unit and the wage rate is $13 per worker. 1. The marginal product of the second worker is: 2. The marginal revenue product of the second worker is: 3. - How many workers should the farmer hire? 4. What is the farmer's profit-maximizing output? 5 . True or False? If a competitive employer is using labor in such an amount that labor's MRP is $10 and its wage rate is $8 it should hire more labor because this will increase profits. 6 From the graph below, an increase in the quantity of labor demanded (as distinct from an increase in demand ) is shown by the: A) shift from labor demand curve Dj to D2- B) shift from labor demand curve Dy to D2- C) move from a to b along labor demand curve D1. D) move from b to a along labor demand curve D1. Wage rate D Quantity of labor 7. Refer to the above graph. An increase in labor demand (as distinct from an increase in the quantity of labor demanded) is shown by the: A) shift from labor demand curve Dj to D2- B) shift from labor demand curve D3 to Dz. C) move from a to b along labor demand curve D1. D) move from b to a along labor demand curve Dj- 8. Refer to the above graph. A move from b to a along labor demand curve D, would result from: A) a decrease in the price of a substitute resource, assuming that the substitution effect exceeds the output effect. B) an increase in the wage rate. C) a decrease in the wage rate. D) an increase in the demand for the product that this labor is helping to produce. 9.Refer to the above graph. Each of the three labor demand curves shown slopes downward because of the: A) law of diminishing marginal utility. B) law of increasing opportunity costs. C) principal-agent problem. D) law of diminishing returns. 10. What is the correlation between the price of substitutes of products and demand? What about complements