Quelpr
12 marksThe Demand for and Supply of Factors

CAPE Economics Unit 1 · 2006 · Paper 2 · Question 5(b)(i)

Data on AURO INC is provided showing output per week for 1 to 6 units of labour. Assume perfect competition in labour and output markets, with wage rate = 18 and product price = 3.

Complete the table in your answer booklet.

This question uses a figure or table from the paper — you'll see it when you practise.

The mark scheme is shown once you've answered.

Practise this question

Other parts of this question

  1. 5(a)Define each of the four broad types of resources: land, labour, capital (including human capital), and entrepreneurship. State the role each plays in the…[12 marks]
  2. 5(b)(ii)State the number of units of labour that AURO INC employs.[4 marks]
  3. 5(c)(i)Draw a backward-bending supply curve of labour and identify the region where the income effect exceeds the substitution effect.[6 marks]
  4. 5(c)(ii)Explain why part of the curve has a negative slope.[4 marks]
  5. 5(d)Give four reasons why wages differ.[12 marks]

More practice: the rest of this paper · more The Demand for and Supply of Factors questions · all CAPE Economics Unit 1 past papers