Question 1

Which of the following would increase the demand for labor? (i)  a decrease in the output price
(ii)  an increase in the output price
(iii)  a labor-saving technological advance
(iv)  a labor-augmenting technological advance

Accepted Answer

A)   (i)  only
B)   (i)  and (iii)  only
C)   (ii)  only
D)   (ii)  and (iv)  onlyE) B) and D)
F) A) and B)

Question 2

Which of the following events would shift the labor supply curve?

Accepted Answer

A)   changes in the number of women willing to work
B)   immigration of workers
C)   changing attitudes towards work
D)   All of the above are correct.E) B) and D)
F) C) and D)

Question 3

Suppose that the market for labor is initially in equilibrium. If the firm employs labor-augmenting technology, the equilibrium wage

Accepted Answer

A)   and the equilibrium quantity of labor will rise.
B)   and the equilibrium quantity of labor will fall.
C)   will rise, and the equilibrium quantity of labor will fall.
D)   will fall, and the equilibrium quantity of labor will rise.E) B) and D)
F) A) and C)

Question 4

Table 18-9
The following table shows the production function for a particular business. The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis.
 
-Refer to Table 18-9. What is the marginal product of the third unit of labor?

Accepted Answer

A)   40 units
B)   50 units
C)   60 units
D)   180 unitsE) None of the above
F) A) and B)

Question 5

Table 18-7
 
-Refer to Table 18-7. What is the value of the cell labeled II?

Accepted Answer

A)   -$100
B)   $100
C)   $200
D)   $300E) A) and D)
F) A) and C)

Question 6

In 2012, the total income of all U.S. residents was approximately $15 trillion.

Accepted Answer

A) True 
 B)False

Question 7

Figure 18-6 
-Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the bakery profession becomes more attractive to young women and men because of a new reality television show, what happens in the market for bakers?

Accepted Answer

A)   Demand increases from D1 to D2.
B)   Demand decreases from D2 to D1.
C)   Supply increases from S1 to S2.
D)   Supply decreases from S2 to S1.E) A) and B)
F) A) and C)

Question 8

Which of the following is true at the level of output at which a competitive firm maximizes profit?

Accepted Answer

A)   price = marginal cost
B)   price = wage/value of marginal product of labor
C)   price = marginal product of labor/wage
D)   All of the above are correct.E) All of the above
F) C) and D)

Question 9

For a profit-maximizing competitive firm, the value of marginal product curve is

Accepted Answer

A)   always rising.
B)   falling only when marginal product is rising.
C)   the labor supply curve.
D)   the labor demand curve.E) C) and D)
F) A) and B)

Question 10

Diminishing marginal product occurs when

Accepted Answer

A)   the marginal product of an input increases as the quantity of the input increases.
B)   the marginal product of an input decreases as the quantity of the input increases.
C)   total output increases as the quantity of an input increases.
D)   total output decreases as the quantity of an input increases.E) None of the above
F) A) and B)

Question 11

Sunshine's Organic Market sells organic produce. Assume that labor is the only input that varies for the firm. The store manager has determined that if she hires 5 workers, the store can sell 150 pounds of produce per day. If she hires 6 workers, the store can sell 170 pounds of produce per day. The store earns $4 for each pound of produce that it sells, and the manager pays each worker $60 per day. Which of the following is not correct?

Accepted Answer

A)   For the 6th worker, the marginal product is 20 pounds of produce per day.
B)   For the 6th worker, the marginal revenue product is $20 per day.
C)   The store earns a higher profit by employing 6 workers than by employing 5 workers.
D)   Assuming no changes in either the daily wages paid to store workers or the price at which the store sells its produce, the firm would maximize profits by hiring a 7th worker so long as the store can increase its sales to at least 185 pounds per day.E) A) and C)
F) All of the above

Question 12

What are the typical effects on the labor market of technological progress?

Accepted Answer

Technological progress typical...

Question 13

The owners of capital resources are compensated according to the

Accepted Answer

A)   purchase price of the capital stock.
B)   marginal product of capital.
C)   value of the marginal product of capital.
D)   absolute level of production of final goods and services.E) None of the above
F) All of the above

Question 14

Who receives income from capital in the United States?

Accepted Answer

A)   bank depositors
B)   bondholders
C)   stockholders
D)   All of the above are correct.E) B) and C)
F) C) and D)

Question 15

Figure 18-1
On the graph, L represents the quantity of labor and Q represents the quantity of output per week. 
-Refer to Figure 18-1. The marginal product of the fourth worker is

Accepted Answer

A)   60 units of output.
B)   75 units of output.
C)   285 units of output.
D)   345 units of output.E) A) and B)
F) C) and D)

Question 16

Table 18-8
Harold and Maude own a dance studio where they and their employees teach ballroom dancing. Their company is a competitive, profit-maximizing firm. Harold and Maude's production function is detailed in the table below.
 
-Refer to Table 18-8. If Harold and Maude pay their workers $80 per day and charge $20 per dance lesson, what is the value of the marginal product of the second worker?

Accepted Answer

A)   $400
B)   $800
C)   $1,600
D)   $4,800E) All of the above
F) C) and D)

Question 17

Labor-saving technology causes which of the following? (i)  The marginal productivity of labor increases.
(ii)  The marginal productivity of labor decreases.
(iii)  Labor demand shifts to the right.
(iv)  Labor demand shifts to the left.

Accepted Answer

A)   (i)  only
B)   (ii)  only
C)   (i)  and (iii)  only
D)   (ii)  and (iv)  onlyE) B) and C)
F) None of the above

Question 18

Suppose that a new invention decreases the marginal productivity of labor, shifting labor demand to the left. Such an invention would be an example of

Accepted Answer

A)   labor-saving technology.
B)   labor-augmenting technology.
C)   revenue technology.
D)   supply-shifting technology.E) B) and C)
F) None of the above

Question 19

Scenario 18-3
Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $13 per hour. During the summer, he drives a tour bus around the ski resort, earning $11 per hour.
-Refer to Scenario 18-3. If Sam takes fewer hours of leisure in the summer than in the winter, we can assume that his labor supply curve for the range of earnings in this example

Accepted Answer

A)   is horizontal.
B)   is vertical.
C)   is upward sloping.
D)   has a backward-bending portion.E) None of the above
F) C) and D)

Question 20

As a result of a labeling mistake at the chemical factory, a farmer accidentally sprays weedkiller rather than fertilizer on half her land. As a result, she loses half of her productive farmland. If the property of diminishing returns applies to all factors of production, she should expect to see the marginal productivity of her remaining land

Accepted Answer

A)   increase.
B)   remain unchanged.
C)   decrease but remain positive.
D)   decrease and become negative.E) B) and D)
F) A) and D)

Exam 18: The Markets for the Factors of Production

Which of the following is true at the level of output at which a competitive firm maximizes profit?

Correct Answer
verified

What are the typical effects on the labor market of technological progress?

Correct Answer
verified
Technological progress typical...
View Answer

Correct Answer
verified

In 2012, the total income of all U.S. residents was approximately $15 trillion.

Correct Answer
verified

Figure 18-1 On the graph, L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1. The marginal product of the fourth worker is

Correct Answer
verified

Correct Answer
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Which of the following events would shift the labor supply curve?

Correct Answer
verified

Suppose that a new invention decreases the marginal productivity of labor, shifting labor demand to the left. Such an invention would be an example of

Correct Answer
verified

Which of the following would increase the demand for labor? (i) a decrease in the output price (ii) an increase in the output price (iii) a labor-saving technological advance (iv) a labor-augmenting technological advance

Correct Answer
verified

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the bakery profession becomes more attractive to young women and men because of a new reality television show, what happens in the market for bakers?

Correct Answer
verified

Table 18-9 The following table shows the production function for a particular business. The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis. -Refer to Table 18-9. What is the marginal product of the third unit of labor?

Correct Answer
verified

For a profit-maximizing competitive firm, the value of marginal product curve is

Correct Answer
verified

Diminishing marginal product occurs when

Correct Answer
verified

Labor-saving technology causes which of the following? (i) The marginal productivity of labor increases. (ii) The marginal productivity of labor decreases. (iii) Labor demand shifts to the right. (iv) Labor demand shifts to the left.

Correct Answer
verified

The owners of capital resources are compensated according to the

Correct Answer
verified

Table 18-7 -Refer to Table 18-7. What is the value of the cell labeled II?

Correct Answer
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Correct Answer
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Who receives income from capital in the United States?

Correct Answer
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Correct Answer
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Suppose that the market for labor is initially in equilibrium. If the firm employs labor-augmenting technology, the equilibrium wage

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Which of the following is true at the level of output at which a competitive firm maximizes profit?

Correct AnswerverifiedShow Answer

What are the typical effects on the labor market of technological progress?

Correct AnswerverifiedTechnological progress typical...View AnswerShow Answer

Correct AnswerverifiedShow Answer

In 2012, the total income of all U.S. residents was approximately $15 trillion.

Correct AnswerverifiedShow Answer

Figure 18-1 On the graph, L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1. The marginal product of the fourth worker is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following events would shift the labor supply curve?

Correct AnswerverifiedShow Answer

Suppose that a new invention decreases the marginal productivity of labor, shifting labor demand to the left. Such an invention would be an example of

Correct AnswerverifiedShow Answer

Which of the following would increase the demand for labor? (i) a decrease in the output price (ii) an increase in the output price (iii) a labor-saving technological advance (iv) a labor-augmenting technological advance

Correct AnswerverifiedShow Answer

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the bakery profession becomes more attractive to young women and men because of a new reality television show, what happens in the market for bakers?

Correct AnswerverifiedShow Answer

Table 18-9 The following table shows the production function for a particular business. The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis. -Refer to Table 18-9. What is the marginal product of the third unit of labor?

Correct AnswerverifiedShow Answer

For a profit-maximizing competitive firm, the value of marginal product curve is

Correct AnswerverifiedShow Answer

Diminishing marginal product occurs when

Correct AnswerverifiedShow Answer

Labor-saving technology causes which of the following? (i) The marginal productivity of labor increases. (ii) The marginal productivity of labor decreases. (iii) Labor demand shifts to the right. (iv) Labor demand shifts to the left.

Correct AnswerverifiedShow Answer

The owners of capital resources are compensated according to the

Correct AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. What is the value of the cell labeled II?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Who receives income from capital in the United States?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that the market for labor is initially in equilibrium. If the firm employs labor-augmenting technology, the equilibrium wage

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Technological progress typical...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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