Question 1

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) A) and B)
F) A) and C)

Question 2

Suppose that the labor market for life guards is initially in equilibrium.Whistles are an important safety tool that life guards use as a part of their jobs.A fire destroys the largest factory that produces whistles.In the market for life guards the equilibrium wage

Accepted Answer

A)   increases because the marginal productivity of life guards increases.
B)   decreases because the marginal productivity of life guards decreases.
C)   increases because the supply of life guards increases.
D)   decreases because the supply of life guards decreases.E) A) and B)
F) None of the above

Question 3

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,the equilibrium wage of health care employees would

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   It is not possible to determine what happens to the equilibrium wage.E) C) and D)
F) B) and C)

Question 4

A competitive firm will hire workers up to the point at which the value of the marginal product of labor equals the

Accepted Answer

A)   average total cost.
B)   average variable cost.
C)   wage.
D)   price per unit of output.E) All of the above
F) None of the above

Question 5

If Firm X is a competitive firm in the market for labor,it has little influence over the wage it pays its employees.

Accepted Answer

A) True 
 B)False

Question 6

Daryn is raking leaves to earn money for his university's economics club.In the first hour,he rakes 8 bags of leaves.In the second hour,he rakes 6 bags of leaves.If he earns $8 per hour,the value of the marginal product of the second hour of labor is $48.

Accepted Answer

A) True 
 B)False

Question 7

If the selling price of a bushel of cranberries rises,we would expect the demand for labor in the cranberry industry to

Accepted Answer

A)   increase.
B)   decrease.
C)   be unchanged.
D)   increase by less than the corresponding decrease in supply.E) B) and D)
F) A) and B)

Question 8

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 $15 per unit,and it pays each of its workers $750 per week.When output increases from 210 units to 285 units,the

Accepted Answer

A)   marginal cost is $10 per unit of output.
B)   marginal revenue is $5 per unit of output.
C)   value of the marginal product of labor is $4,275
D)   firm's profit decreases.E) All of the above
F) None of the above

Question 9

If hiring more workers results in each additional worker contributing successively smaller amounts of output,then which of the following is present?

Accepted Answer

A)   diminishing profitability
B)   diminishing total product
C)   diminishing marginal product
D)   Both b)  and c)  are correct.E) C) and D)
F) B) and D)

Question 10

Scenario 18-2
Gertrude Kelp owns three boats that participate in commercial fishing for fresh Pacific salmon off the coast of Alaska. As part of her business she hires a captain and several crew members for each boat. In the market for fresh Pacific salmon, there are thousands of firms like Gertrude's. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market.
-Refer to Scenario 18-2.Labor-market theory assumes that Gertrude's demand for crew members and her supply of fresh Pacific salmon result from her

Accepted Answer

A)   intrinsic desire to hire crew members.
B)   primary goal of maximizing profit.
C)   altruistic motives to provide fresh salmon to consumers.
D)   desire to strike a balance between environmental concerns and maximum profit.E) All of the above
F) B) and D)

Question 11

The value of the marginal product of labor can be calculated as the price of the final good minus the marginal product of labor.

Accepted Answer

A) True 
 B)False

Question 12

The supply of labor in any one market depends on the opportunities available in other markets.

Accepted Answer

A) True 
 B)False

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.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 14

Which of the following would be an example of capital for a retail gasoline station?
(i) the gas tanks and pumps
(ii) the service attendants' time
(iii) the plot of land on which the station sits

Accepted Answer

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

Question 15

Scenario 18-2
Gertrude Kelp owns three boats that participate in commercial fishing for fresh Pacific salmon off the coast of Alaska. As part of her business she hires a captain and several crew members for each boat. In the market for fresh Pacific salmon, there are thousands of firms like Gertrude's. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market.
-Refer to Scenario 18-2.When Gertrude participates in the labor market to hire crew members for her boats,she is most likely considered a

Accepted Answer

A)   demander of labor services.
B)   supplier of labor services.
C)   demander of capital.
D)   supplier of capital.E) B) and D)
F) B) and C)

Question 16

Figure 18-7
 
-Refer to Figure 18-7.Which of the following would shift the labor supply curve from S₁ to S₂?

Accepted Answer

A)   technological progress
B)   a decrease in the price of the firm's output
C)   a change in workers' attitudes toward the work-leisure tradeoff
D)   an increase in the price of the firm's outputE) C) and D)
F) None of the above

Question 17

When a competitive firm hires labor up to the point at which the value of the marginal product of labor equals the wage,it also produces up to the point at which the price of output equals average variable cost.

Accepted Answer

A) True 
 B)False

Question 18

Suppose that the market for labor is initially in equilibrium.An increase in immigration 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) None of the above
F) A) and C)

Question 19

An increase in the wages paid to high-school student who detassle corn will increase the labor supply of high-school students who weed soybean fields,all else equal.

Accepted Answer

A) True 
 B)False

Question 20

Figure 18-7
 
-Refer to Figure 18-7.Assume W₁ = $20 and W₂ = $18,and the market is always in equilibrium.A shift of the labor supply curve from S₁ to S₂ would

Accepted Answer

A)   increase the value of the marginal product of labor by $2.
B)   decrease the value of the marginal product of labor by $2.
C)   decrease the value of the marginal product of labor by more than $2.
D)   not change the value of the marginal product of labor.E) None of the above
F) A) and B)

Exam 18: The Market For the Factors of Production.

If Firm X is a competitive firm in the market for labor,it has little influence over the wage it pays its employees.

Correct Answer
verified

The owners of capital resources are compensated according to the

Correct Answer
verified

An increase in the wages paid to high-school student who detassle corn will increase the labor supply of high-school students who weed soybean fields,all else equal.

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 $15 per unit,and it pays each of its workers $750 per week.When output increases from 210 units to 285 units,the

Correct Answer
verified

Figure 18-7 -Refer to Figure 18-7.Assume W₁ = $20 and W₂ = $18,and the market is always in equilibrium.A shift of the labor supply curve from S₁ to S₂ would

Correct Answer
verified

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,the equilibrium wage of health care employees would

Correct Answer
verified

If the selling price of a bushel of cranberries rises,we would expect the demand for labor in the cranberry industry to

Correct Answer
verified

Daryn is raking leaves to earn money for his university's economics club.In the first hour,he rakes 8 bags of leaves.In the second hour,he rakes 6 bags of leaves.If he earns $8 per hour,the value of the marginal product of the second hour of labor is $48.

Correct Answer
verified

Suppose that the labor market for life guards is initially in equilibrium.Whistles are an important safety tool that life guards use as a part of their jobs.A fire destroys the largest factory that produces whistles.In the market for life guards the equilibrium wage

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

If hiring more workers results in each additional worker contributing successively smaller amounts of output,then which of the following is present?

Correct Answer
verified

The supply of labor in any one market depends on the opportunities available in other markets.

Correct Answer
verified

A competitive firm will hire workers up to the point at which the value of the marginal product of labor equals the

Correct Answer
verified

When a competitive firm hires labor up to the point at which the value of the marginal product of labor equals the wage,it also produces up to the point at which the price of output equals average variable cost.

Correct Answer
verified

The value of the marginal product of labor can be calculated as the price of the final good minus the marginal product of labor.

Correct Answer
verified

Which of the following would be an example of capital for a retail gasoline station? (i) the gas tanks and pumps (ii) the service attendants' time (iii) the plot of land on which the station sits

Correct Answer
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Correct Answer
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Correct Answer
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Suppose that the market for labor is initially in equilibrium.An increase in immigration will cause the equilibrium wage

Correct Answer
verified

Figure 18-7 -Refer to Figure 18-7.Which of the following would shift the labor supply curve from S₁ to S₂?

Correct Answer
verified

Exam 18: The Market For the Factors of Production.

If Firm X is a competitive firm in the market for labor,it has little influence over the wage it pays its employees.

Correct AnswerverifiedShow Answer

The owners of capital resources are compensated according to the

Correct AnswerverifiedShow Answer

An increase in the wages paid to high-school student who detassle corn will increase the labor supply of high-school students who weed soybean fields,all else equal.

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 $15 per unit,and it pays each of its workers $750 per week.When output increases from 210 units to 285 units,the

Correct AnswerverifiedShow Answer

Figure 18-7 -Refer to Figure 18-7.Assume W₁ = $20 and W₂ = $18,and the market is always in equilibrium.A shift of the labor supply curve from S₁ to S₂ would

Correct AnswerverifiedShow Answer

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,the equilibrium wage of health care employees would

Correct AnswerverifiedShow Answer

If the selling price of a bushel of cranberries rises,we would expect the demand for labor in the cranberry industry to

Correct AnswerverifiedShow Answer

Daryn is raking leaves to earn money for his university's economics club.In the first hour,he rakes 8 bags of leaves.In the second hour,he rakes 6 bags of leaves.If he earns $8 per hour,the value of the marginal product of the second hour of labor is $48.

Correct AnswerverifiedShow Answer

Suppose that the labor market for life guards is initially in equilibrium.Whistles are an important safety tool that life guards use as a part of their jobs.A fire destroys the largest factory that produces whistles.In the market for life guards the equilibrium wage

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

If hiring more workers results in each additional worker contributing successively smaller amounts of output,then which of the following is present?

Correct AnswerverifiedShow Answer

The supply of labor in any one market depends on the opportunities available in other markets.

Correct AnswerverifiedShow Answer

A competitive firm will hire workers up to the point at which the value of the marginal product of labor equals the

Correct AnswerverifiedShow Answer

When a competitive firm hires labor up to the point at which the value of the marginal product of labor equals the wage,it also produces up to the point at which the price of output equals average variable cost.

Correct AnswerverifiedShow Answer

The value of the marginal product of labor can be calculated as the price of the final good minus the marginal product of labor.

Correct AnswerverifiedShow Answer

Which of the following would be an example of capital for a retail gasoline station? (i) the gas tanks and pumps (ii) the service attendants' time (iii) the plot of land on which the station sits

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that the market for labor is initially in equilibrium.An increase in immigration will cause the equilibrium wage

Correct AnswerverifiedShow Answer

Figure 18-7 -Refer to Figure 18-7.Which of the following would shift the labor supply curve from S₁ to S₂?

Correct AnswerverifiedShow Answer

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