Question 1

Table 18-5
 
-Refer to Table 18-5.The fact that the production function exhibits diminishing marginal productivity implies that

Accepted Answer

A)   total production decreases beyond a certain level of output.
B)   labor markets are not always competitive.
C)   the additions to total output get smaller as more workers are hired.
D)   marginal profit is negative.E) A) and D)
F) C) and D)

Question 2

The term Luddite is used to describe

Accepted Answer

A)   a person who readily adopts the latest technological advances.
B)   a person who is opposed to a reduction in the number of immigrants that are allowed into the country each year.
C)   a person who opposes technological advance.
D)   any mythical historical figure.E) A) and B)
F) None of the above

Question 3

Diane's Auto World installs tires on automobiles,light trucks,and sport utility vehicles.She is a profit-maximizing business owner whose firm operates in a competitive market.The marginal cost of installing a tire is $10.The marginal productivity of the last worker that Diane hired was 2 tires per hour.What is the maximum hourly wage that Diane was willing to pay the last worker hired?

Accepted Answer

A)   $5
B)   $10
C)   $20
D)   There is insufficient information to answer this question.E) C) and D)
F) A) and B)

Question 4

Omega Custom Cabinets produces and sells custom bathroom vanities.The firm has determined that if it hires 10 workers,it can produce 20 vanities per week.If it hires 11 workers,it can produce 22 vanities per week.It sells each vanity for $800,and it pays each of its workers $1,000 per week.Which of the following is correct?

Accepted Answer

A)   For the 11th worker,the marginal profit is $600.
B)   For the 11th worker,the marginal revenue product is $2,000.
C)   The firm is maximizing its profit.
D)   If the firm is employing 11 workers,then its profit would increase if it cut back to 10 workers.E) A) and D)
F) A) and C)

Question 5

Consider the market for land.Suppose the value of the marginal product of land decreases.Holding all else constant,what will happen to the equilibrium rental price for land?

Accepted Answer

A)   The equilibrium rental rate increases.
B)   The equilibrium rental rate decreases.
C)   The equilibrium rental rate does not change.
D)   It is not possible to determine what will happen to the equilibrium rental rate.E) B) and D)
F) A) and D)

Question 6

When we focus on the firm as a supplier of a good or a service,we assume that the firm is a profit maximizer.When we focus on the firm as a demander of labor,we assume that the firm's objective is to

Accepted Answer

A)   minimize wages.
B)   minimize variable costs.
C)   maximize the number of workers hired.
D)   maximize profit.E) C) and D)
F) A) and D)

Question 7

Labor markets are different from most other markets because labor demand is

Accepted Answer

A)   represented by a vertical line on a supply-demand diagram.
B)   represented by an upward-sloping line on a supply-demand diagram.
C)   such an elusive concept.
D)   a derived demand.E) All of the above
F) A) and D)

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 $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) A) and B)
F) All of the above

Question 9

What does an upward-sloping labor supply curve mean?

Accepted Answer

A)   It means that workers prefer to buy more leisure time when their incomes increase.
B)   It means that workers prefer to supply less labor when wages are high.
C)   It means that an increase in the opportunity cost of leisure leads workers to increase the quantity of labor they supply.
D)   All of the above are correct.E) A) and C)
F) None of the above

Question 10

Profit maximization by firms ensures that the equilibrium wage always equals the value of the marginal product of capital.

Accepted Answer

A) True 
 B)False

Question 11

Suppose an influenza pandemic were to significantly decrease the population of a country.We would predict a decrease in the marginal product of land in that country.

Accepted Answer

A) True 
 B)False

Question 12

If the value of the marginal product of labor exceeds the wage,then the firm could

Accepted Answer

A)   increase profit by hiring additional labor.
B)   increase profit by reducing the amount of labor hired.
C)   increase revenue by lowering output.
D)   reduce total cost by hiring additional workers.E) All of the above
F) A) and B)

Question 13

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...

Question 14

Table 18-4
Consider the following daily production data for Wills Golf Balls.Wills sells golf balls for $2.50 cents each and pays the workers a wage of $325 per day.
 
-For maximum profit,a firm hires labor up to the point at which the wage equals

Accepted Answer

A)   (i) and (ii) 
B)   (i) and (iii) 
C)   (ii) and (iii) 
D)   All of the above are correct.E) None of the above
F) A) and C)

Question 15

Figure 18-4
This figure below shows the labor market for automobile workers.The curve labeled S is the labor supply curve,and the curves labeled D1 and D2 are the labor demand curves.On the horizontal axis,L represents the quantity of labor in the market. 1 and D2 are the labor demand curves.On the horizontal axis,L represents the quantity of labor in the market.   -Refer to Figure 18-4.Which of the following events would most likely explain the shift of the labor-demand curve from D1 to D2? A)  The price of automobiles decreased. B)  A large number of immigrants entered the automobile-worker market. C)  A technological advance increased the marginal product of automobile workers. D)  All of the above events are equally-likely explanations." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-4.Which of the following events would most likely explain the shift of the labor-demand curve from D1 to D2?

Accepted Answer

A)   The price of automobiles decreased.
B)   A large number of immigrants entered the automobile-worker market.
C)   A technological advance increased the marginal product of automobile workers.
D)   All of the above events are equally-likely explanations.E) B) and C)
F) A) and C)

Question 16

Table 18-5
 
-Refer to Table 18-5.What is the marginal product of the fourth worker?

Accepted Answer

A)   30
B)   40
C)   100
D)   400E) A) and D)
F) B) and C)

Question 17

Figure 18-3
The figure below shows the production function for a particular firm. 
-Refer to Figure 18-3.Suppose the firm pays a wage equal to $320 per unit of labor and sells its output at $15 per unit.How many units of labor should the firm hire to maximize profit?

Accepted Answer

A)   2 units
B)   3 units
C)   4 units
D)   5 unitsE) All of the above
F) C) and D)

Question 18

Labor supply curves are always upward sloping.

Accepted Answer

A) True 
 B)False

Question 19

Figure 18-5 
-Refer to Figure 18-5.If the price of apples decreases,the

Accepted Answer

A)   demand for apple pickers will shift to the left.
B)   demand for apple pickers will shift to the right.
C)   supply of apple pickers will shift to the left.
D)   supply of apple pickers will shift to the right.E) All of the above
F) None of the above

Question 20

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

Accepted Answer

A)   The labor supply will stay unchanged until the wages paid to pear pickers change.
B)   The labor supply will decrease.
C)   The labor supply will increase.
D)   The labor supply may fall or rise,depending on the price of pears.E) All of the above
F) C) and D)

Exam 18: The Markets for the Factors of Production

Table 18-5 -Refer to Table 18-5.What is the marginal product of the fourth worker?

Correct Answer
verified

Labor supply curves are always upward sloping.

Correct Answer
verified

Correct Answer
verified

Suppose an influenza pandemic were to significantly decrease the population of a country.We would predict a decrease in the marginal product of land in that country.

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

If the value of the marginal product of labor exceeds the wage,then the firm could

Correct Answer
verified

Labor markets are different from most other markets because labor demand is

Correct Answer
verified

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

Correct Answer
verified

Figure 18-3 The figure below shows the production function for a particular firm. -Refer to Figure 18-3.Suppose the firm pays a wage equal to $320 per unit of labor and sells its output at $15 per unit.How many units of labor should the firm hire to maximize profit?

Correct Answer
verified

What does an upward-sloping labor supply curve mean?

Correct Answer
verified

Consider the market for land.Suppose the value of the marginal product of land decreases.Holding all else constant,what will happen to the equilibrium rental price for land?

Correct Answer
verified

Figure 18-5 -Refer to Figure 18-5.If the price of apples decreases,the

Correct Answer
verified

Table 18-5 -Refer to Table 18-5.The fact that the production function exhibits diminishing marginal productivity implies that

Correct Answer
verified

Correct Answer
verified

Profit maximization by firms ensures that the equilibrium wage always equals the value of the marginal product of capital.

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

The term Luddite is used to describe

Correct Answer
verified

When we focus on the firm as a supplier of a good or a service,we assume that the firm is a profit maximizer.When we focus on the firm as a demander of labor,we assume that the firm's objective is to

Correct Answer
verified

Table 18-4 Consider the following daily production data for Wills Golf Balls.Wills sells golf balls for $2.50 cents each and pays the workers a wage of $325 per day. -For maximum profit,a firm hires labor up to the point at which the wage equals

Correct Answer
verified

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Table 18-5 -Refer to Table 18-5.What is the marginal product of the fourth worker?

Correct AnswerverifiedShow Answer

Labor supply curves are always upward sloping.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose an influenza pandemic were to significantly decrease the population of a country.We would predict a decrease in the marginal product of land in that country.

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

If the value of the marginal product of labor exceeds the wage,then the firm could

Correct AnswerverifiedShow Answer

Labor markets are different from most other markets because labor demand is

Correct AnswerverifiedShow Answer

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

Correct AnswerverifiedShow Answer

Figure 18-3 The figure below shows the production function for a particular firm. -Refer to Figure 18-3.Suppose the firm pays a wage equal to $320 per unit of labor and sells its output at $15 per unit.How many units of labor should the firm hire to maximize profit?

Correct AnswerverifiedShow Answer

What does an upward-sloping labor supply curve mean?

Correct AnswerverifiedShow Answer

Consider the market for land.Suppose the value of the marginal product of land decreases.Holding all else constant,what will happen to the equilibrium rental price for land?

Correct AnswerverifiedShow Answer

Figure 18-5 -Refer to Figure 18-5.If the price of apples decreases,the

Correct AnswerverifiedShow Answer

Table 18-5 -Refer to Table 18-5.The fact that the production function exhibits diminishing marginal productivity implies that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Profit maximization by firms ensures that the equilibrium wage always equals the value of the marginal product of capital.

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

The term Luddite is used to describe

Correct AnswerverifiedShow Answer

When we focus on the firm as a supplier of a good or a service,we assume that the firm is a profit maximizer.When we focus on the firm as a demander of labor,we assume that the firm's objective is to

Correct AnswerverifiedShow Answer

Table 18-4 Consider the following daily production data for Wills Golf Balls.Wills sells golf balls for $2.50 cents each and pays the workers a wage of $325 per day. -For maximum profit,a firm hires labor up to the point at which the wage equals

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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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Correct Answer
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Correct Answer
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