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ECS1501-25-Y Topics 12 -15

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Which condition must be met for a firm to hire an additional worker?
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If a minimum wage is set below the equilibrium wage on the graph, what will be the market outcome?
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What happens to the demand for labour if the product’s price increases?
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On a labour market graph, if the minimum wage is imposed above the equilibrium, which of the following best describes the labour surplus?
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What is the shape of the marginal product curve in the short run?
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Introducing a minimum wage below the equilibrium wage in a perfectly competitive labour market will result in an excess demand for labour.
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A firm will employ workers as long as MPP is greater than the wage rate (w).
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Use the diagram below which diagram shows the short-run conditions of a firm in a perfectly competitive market to answer the question.

In the long run, ____ firms will ____ the industry so that the market supply curve shifts to the _____, until prices ______ sufficiently so that all firms make a normal profit only.

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This question is based on the following diagram which shows the marginal cost and average total cost curves for a perfectly competitive firm.

If the market price is R10

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A perfectly competitive firm maximises its profit by choosing the optimal price.

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