Question 1

The labor-supply curve is affected by the trade-off between labor and leisure.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following could decrease the labor-supply curve for teachers?

Accepted Answer

A)   a decrease in the wages paid to teachers
B)   an increase in immigration
C)   a change in the work preferences of men,with more of them preferring to be stay-at-home fathers
D)   any factor that would decrease the labor-demand curveE) B) and D)
F) A) and D)

Question 3

The Black Death in fourteenth-century Europe resulted in

Accepted Answer

A)   a lower marginal product of labor of surviving workers.
B)   a higher marginal product of land.
C)   economic hardship for surviving peasants.
D)   economic hardship for surviving landowners.E) A) and B)
F) A) and C)

Question 4

The negative slope of the value of marginal product curve is most easily explained by

Accepted Answer

A)   tight labor markets.
B)   a surplus of workers.
C)   diminishing marginal product.
D)   diminishing marginal cost.E) C) and D)
F) A) and C)

Question 5

Consider the market for capital equipment.Suppose the price of firms' output increases.Holding all else constant,the equilibrium rental price of capital equipment will

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   It is not possible to determine what will happen to the equilibrium rental price of capital equipment.E) B) and D)
F) B) and C)

Question 6

Factor markets are different from product markets in an important way because

Accepted Answer

A)   equilibrium is the exception,and not the rule,in factor markets.
B)   the demand for a factor of production is a derived demand.
C)   the demand for a factor of production is likely to be upward sloping,in violation of the law of demand.
D)   All of the above are correct.E) B) and C)
F) A) and B)

Question 7

Sarah owns and manages a small coffee shop.We assume that Sarah 
(i) Does not directly care about the quantity of coffee that she sells.
(ii) Does not directly care about the number of workers that she hires.
(iii) Wants to maximize the quantity of coffee that she sells.
(iv) Wants to minimize the number of workers that she hires.
(v) Wants to maximize profits.

Accepted Answer

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

Question 8

Table 18-6
 
-Refer to Table 18-6.What is the value of the cell labeled II?

Accepted Answer

A)   -$100
B)   $100
C)   $200
D)   $300E) B) and C)
F) All of the above

Question 9

If the demand for labor decreases and the supply of labor is unchanged,then the opportunity cost of leisure will decrease.

Accepted Answer

A) True 
 B)False

Question 10

Figure 18-3 
-Refer to Figure 18-3.Suppose that the price of the output is $20.What is the value of the marginal product of the second worker?

Accepted Answer

A)   $4
B)   $5
C)   $80
D)   $240E) A) and B)
F) None of the above

Question 11

Table 18-6
 
-Refer to Table 18-6.The fact that the marginal product falls as the number of workers increases illustrates a property called

Accepted Answer

A)   diminishing marginal product.
B)   utility maximization.
C)   supply and demand.
D)   labor theory.E) A) and B)
F) All of the above

Question 12

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.Suppose the firm sells its output for $12 per unit,and it pays each of its workers $700 per week.The value of the marginal product of the fifth worker is

Accepted Answer

A)   $540
B)   $700
C)   $720
D)   $1,080E) B) and C)
F) None of the above

Question 13

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.Based on the shape of the curve,the (i) 
Total product is increasing.
(ii) 
Total product is decreasing.
(iii) 
Marginal product is increasing.
(iv) 
Marginal product is decreasing.

Accepted Answer

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

Question 14

Suppose that the market for labor is initially in equilibrium.A decrease in the price of output will cause the equilibrium wage

Accepted Answer

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

Question 15

Suppose a labor-augmenting technology were developed for a product that increased the marginal product of labor for all workers.Which of the following would happen in the labor market for this product?

Accepted Answer

A)   Demand would decrease.
B)   Demand would increase.
C)   Supply would decrease.
D)   Supply would increase.E) A) and B)
F) A) and C)

Question 16

Consider the labor market for short-order cooks.An increase in the wages paid to fast-food workers will cause

Accepted Answer

A)   both equilibrium wages and equilibrium employment to increase in the market for short-order cooks.
B)   both equilibrium wages and equilibrium employment to decrease in the market for short-order cooks.
C)   equilibrium wages to increase and equilibrium employment to decrease in the market for short-order cooks.
D)   equilibrium wages to decrease and equilibrium employment to increase in the market for short-order cooks.E) B) and D)
F) None of the above

Question 17

Table 18-10
Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day.
 
-Refer to Table 18-10.What is the sixth worker's marginal product of labor?

Accepted Answer

A)   100 cookies
B)   120 cookies
C)   140 cookies
D)   160 cookiesE) A) and B)
F) A) and C)

Question 18

According to the neoclassical theory of distribution,the wages paid to workers

Accepted Answer

A)   reflect the market prices of the goods those workers produce.
B)   reflect the degree of market power held by the firms that pay those wages.
C)   fail to reflect those workers' opportunity costs of leisure.
D)   are unrelated to the forces of supply and demand.E) B) and C)
F) None of the above

Question 19

Which of the following qualify as part of our economy's capital income?

Accepted Answer

A)   wages paid to workers
B)   interest paid to the owners of corporate bonds
C)   rent paid on farmland
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 20

Explain how a firm values the contribution of workers to its profitability.Would a profit-maximizing competitive firm ever stop increasing employment as long as marginal product is rising? Explain your answer.

Accepted Answer

A firm values the contribution of a work...

Exam 18: The Market for the Factors of Production

Table 18-6 -Refer to Table 18-6.What is the value of the cell labeled II?

Correct Answer
verified

Factor markets are different from product markets in an important way because

Correct Answer
verified

According to the neoclassical theory of distribution,the wages paid to workers

Correct Answer
verified

The Black Death in fourteenth-century Europe resulted in

Correct Answer
verified

Suppose a labor-augmenting technology were developed for a product that increased the marginal product of labor for all workers.Which of the following would happen in the labor market for this product?

Correct Answer
verified

Correct Answer
verified

Table 18-10 Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day. -Refer to Table 18-10.What is the sixth worker's marginal product of labor?

Correct Answer
verified

Consider the market for capital equipment.Suppose the price of firms' output increases.Holding all else constant,the equilibrium rental price of capital equipment will

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.Suppose the firm sells its output for $12 per unit,and it pays each of its workers $700 per week.The value of the marginal product of the fifth worker is

Correct Answer
verified

Correct Answer
verified

The negative slope of the value of marginal product curve is most easily explained by

Correct Answer
verified

Consider the labor market for short-order cooks.An increase in the wages paid to fast-food workers will cause

Correct Answer
verified

Figure 18-3 -Refer to Figure 18-3.Suppose that the price of the output is $20.What is the value of the marginal product of the second worker?

Correct Answer
verified

The labor-supply curve is affected by the trade-off between labor and leisure.

Correct Answer
verified

If the demand for labor decreases and the supply of labor is unchanged,then the opportunity cost of leisure will decrease.

Correct Answer
verified

Table 18-6 -Refer to Table 18-6.The fact that the marginal product falls as the number of workers increases illustrates a property called

Correct Answer
verified

Suppose that the market for labor is initially in equilibrium.A decrease in the price of output will cause the equilibrium wage

Correct Answer
verified

Which of the following could decrease the labor-supply curve for teachers?

Correct Answer
verified

Explain how a firm values the contribution of workers to its profitability.Would a profit-maximizing competitive firm ever stop increasing employment as long as marginal product is rising? Explain your answer.

Correct Answer
verified
A firm values the contribution of a work...
View Answer

Which of the following qualify as part of our economy's capital income?

Correct Answer
verified

Exam 18: The Market for the Factors of Production

Table 18-6 -Refer to Table 18-6.What is the value of the cell labeled II?

Correct AnswerverifiedShow Answer

Factor markets are different from product markets in an important way because

Correct AnswerverifiedShow Answer

According to the neoclassical theory of distribution,the wages paid to workers

Correct AnswerverifiedShow Answer

The Black Death in fourteenth-century Europe resulted in

Correct AnswerverifiedShow Answer

Suppose a labor-augmenting technology were developed for a product that increased the marginal product of labor for all workers.Which of the following would happen in the labor market for this product?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 18-10 Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day. -Refer to Table 18-10.What is the sixth worker's marginal product of labor?

Correct AnswerverifiedShow Answer

Consider the market for capital equipment.Suppose the price of firms' output increases.Holding all else constant,the equilibrium rental price of capital equipment will

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.Suppose the firm sells its output for $12 per unit,and it pays each of its workers $700 per week.The value of the marginal product of the fifth worker is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The negative slope of the value of marginal product curve is most easily explained by

Correct AnswerverifiedShow Answer

Consider the labor market for short-order cooks.An increase in the wages paid to fast-food workers will cause

Correct AnswerverifiedShow Answer

Figure 18-3 -Refer to Figure 18-3.Suppose that the price of the output is $20.What is the value of the marginal product of the second worker?

Correct AnswerverifiedShow Answer

The labor-supply curve is affected by the trade-off between labor and leisure.

Correct AnswerverifiedShow Answer

If the demand for labor decreases and the supply of labor is unchanged,then the opportunity cost of leisure will decrease.

Correct AnswerverifiedShow Answer

Table 18-6 -Refer to Table 18-6.The fact that the marginal product falls as the number of workers increases illustrates a property called

Correct AnswerverifiedShow Answer

Suppose that the market for labor is initially in equilibrium.A decrease in the price of output will cause the equilibrium wage

Correct AnswerverifiedShow Answer

Which of the following could decrease the labor-supply curve for teachers?

Correct AnswerverifiedShow Answer

Explain how a firm values the contribution of workers to its profitability.Would a profit-maximizing competitive firm ever stop increasing employment as long as marginal product is rising? Explain your answer.

Correct AnswerverifiedA firm values the contribution of a work...View AnswerShow Answer

Which of the following qualify as part of our economy's capital income?

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A firm values the contribution of a work...
View Answer

Correct Answer
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