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Exam 18: The Markets for the Factors of Production

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Question 141

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If the wages of a CPA decrease, (i) Her opportunity cost of leisure increases. (ii) Her opportunity cost of leisure decreases. (iii) Her hours of labor supply may increase.(iv) Her hours of labor supply may decrease.

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

E) A) and D)
F) C) and D)

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Question 142

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In 2015, the total income of all U.S. residents was about

A) $10 billion.
B) $16 billion.
C) $10 trillion.
D) $16 trillion.

E) A) and D)
F) B) and C)

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Question 143

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Over time, there have been technological advances in the production of radios. At the same time, it has become less popular to listen to radio. Taking these two events into account, what would be the likely effect on the wages of workers who manufacture radios?

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. How many workers will the firm hire to maximize its profit?

Which of the following events would bring about a change in the value of the marginal product of labor?

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the value of the marginal product of the second worker?

Table 18-3 -Refer to Table 18-3. Which firm's production function exhibits positive but diminishing marginal product?

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries in Northern Minnesota. If Northern Minnesota experiences an increase in immigration from Canada, what happens in the market for bakers?

The labor supply curve reflects how

A competitive, profit-maximizing firm hires labor up to the point at which the wage is equal to the __________.

Using the theory of wage determination, explain why wages in developing countries, where levels of capital are small, are typically quite low.

Factor markets for chocolate bars are influenced by the

Chuckie's Pizza Palace produces gourmet pizzas that sell for $20 each. Assume that labor is the only input that varies for the firm. If Chuckie hires 10 workers, he can produce and sell 600 pizzas per week. If he hires 11 workers, he can produce and sell 650 pizzas per week. Chuckie pays each of his workers $400 per week. Which of the following is correct?

For profit-maximizing, competitive firms, the demand curve for each factor of production equals the value of the marginal product of that factor.

Suppose that the labor market for high school chemistry teachers is initially in equilibrium. Chemistry teachers use laboratory chemicals as an important part of their jobs. New environmental regulations ban the use of many chemicals, which means that fewer laboratory chemicals are available for high school chemistry teachers to use in their jobs. What happens to the equilibrium wage and quantity of high school chemistry teachers?

Growth in real wage rates is closely tied to growth in labor productivity.

Figure 18-1. The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. -Refer to Figure 18-1. What is the marginal product of the third mechanic?

Scenario 18-5 Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada. -Refer to Scenario 18-5. In the labor market in the northern United States, the equilibrium wage

Value of marginal product is defined as the additional

Consider the labor market for computer programmers. Because of the dot.com boom in the late 1990s, a lot of workers went to school to learn how to write computer code for one of thousands of new dot.com companies. However, when these computer programming students graduated, the dot.com bust took place. The dot.com bust decreased the value of the marginal product of computer programmers. Holding all else equal, what effect did these two circumstances have on the equilibrium wage in the labor market for computer programmers?