QUESTIONS FOR REVIEW
1. Explain how a firm’s production function is related to its marginal product of labor, how a firm’s marginal product of labor is related to the value of its marginal product, and how a firm’s value of marginal product is related to its demand for labor.
2. Give two examples of events that could shift the demand for labor.
3. Give two examples of events that could shift the supply of labor.
4~ Explain how the wage Cull adjust to balance the supply and demand for labor while simultaneously equaling the value of the marginal product of labor.
5. If the population of the United States suddenly grew because of a large immigration, what would happen to wages? What would happen to the rents earned by the owners of land and capital?