Question 1

Which of the following events would lead to an increase in the supply of labor?

Accepted Answer

A)   The price of a firm's product increases.
B)   A country experiences an increase in immigrant labor.
C)   The development of a new labor-augmenting technology.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 2

Figure 18-2.The figure shows a particular firm's value-of-marginal-product (VMP) curve.On the horizontal axis,L represents the number of workers.The time frame is daily. 
-Refer to Figure 18-2.Assume the following:
• Two points on the firm's production function are (L = 2,Q = 180) and (L = 3,Q = 228) ,
Where L = number of workers and Q = quantity of output.
• The firm pays its workers $120 per day.
• The firm's non-labor costs are fixed and they amount to $250 per day.
We can conclude that

Accepted Answer

A)   the firm sells its output for $12 per unit.
B)   if the firm is currently employing 2 workers per day,then profit could be increased by $48 per day if a third worker is hired.
C)   the marginal cost per unit of output is $2.50 when output is increased from 180 units per day to 228 units per day.
D)   the firm's maximum profit occurs when it hires 3 workers per day.E) None of the above
F) B) and C)

Question 3

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

Accepted Answer

Wages are determined by the value of wor...

Question 4

Table 18-3
 
-Refer to Table 18-3.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $5 in a competitive market.What is the total revenue per day that the firm will earn if it employs five workers?

Accepted Answer

A)   $500.
B)   $300.
C)   $2,200.
D)   $2,500.E) A) and C)
F) A) and D)

Question 5

Figure 18-7 1 = $20 and W2 = $18 and the market is always in equilibrium.Then the shift of the labor supply curve from S1 to S2 A)  increases the value of the marginal product of labor by $2. B)  decreases the value of the marginal product of labor by $2. C)  decreases the value of the marginal product of labor by more than $2. D)  does not change the value of the marginal product of labor." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-7.Assume W1 = $20 and W2 = $18 and the market is always in equilibrium.Then the shift of the labor supply curve from S1 to S2

Accepted Answer

A)   increases the value of the marginal product of labor by $2.
B)   decreases the value of the marginal product of labor by $2.
C)   decreases the value of the marginal product of labor by more than $2.
D)   does not change the value of the marginal product of labor.E) All of the above
F) A) and B)

Question 6

Figure 18-2.The figure shows a particular firm's value-of-marginal-product (VMP) curve.On the horizontal axis,L represents the number of workers.The time frame is daily. 
-Refer to Figure 18-2.Suppose the marginal product of the fifth unit of labor is 30 units of output per day.The figure implies that the

Accepted Answer

A)   price of output is $4.
B)   price of output is $6.
C)   price of output is $8.
D)   daily wage is $120.E) A) and B)
F) A) and C)

Question 7

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Accepted Answer

A) True 
 B)False

Question 8

Figure 18-6 1 = $20 and W2 = $22 and the market is always in equilibrium.Then the shift of the labor demand curve from D1 to D2 A)  increases the value of the marginal product of labor by $2. B)  increases the value of the marginal product of labor by less than $2. C)  decreases the value of the marginal product of labor by more than $2. D)  does not change the value of the marginal product of labor." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-6.Assume W1 = $20 and W2 = $22 and the market is always in equilibrium.Then the shift of the labor demand curve from D1 to D2

Accepted Answer

A)   increases the value of the marginal product of labor by $2.
B)   increases the value of the marginal product of labor by less than $2.
C)   decreases the value of the marginal product of labor by more than $2.
D)   does not change the value of the marginal product of labor.E) A) and B)
F) A) and C)

Question 9

An increase in a product's price will shift the labor demand curve for that product to the left.

Accepted Answer

A) True 
 B)False

Question 10

Labor-augmenting technology causes which of the following?

Accepted Answer

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

Question 11

A change in the supply of one factor of production

Accepted Answer

A)   will not change either the marginal productivities or the prices of other factors.
B)   will not change the prices of other factors,but it may change their marginal productivities.
C)   will not change the marginal productivities of other factors,but it may change their prices.
D)   changes the marginal productivities and the prices of other factors.E) A) and C)
F) C) and D)

Question 12

If the marginal productivity of the sixth worker hired is less than the marginal productivity of the fifth worker hired,then the addition of the sixth worker causes total output to decline.

Accepted Answer

A) True 
 B)False

Question 13

Suppose the supply of capital decreases.As a result,the quantity of capital used in production and the rental price of capital will both fall.

Accepted Answer

A) True 
 B)False

Question 14

The term "factor market" applies to the market for

Accepted Answer

A)   labor.
B)   capital.
C)   land.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 15

Table 18-2
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 18-2.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) B) and C)
F) A) and B)

Question 16

If the demand curve for beef shifts to the right,then the value of the marginal product of labor for butchers will

Accepted Answer

A)   rise.
B)   fall.
C)   remain unchanged.
D)   rise or fall;either is possible.E) B) and C)
F) A) and D)

Question 17

The basic tools of supply and demand apply to

Accepted Answer

A)   markets for goods and services and to markets for labor services.
B)   markets for goods and services but not to markets for labor services.
C)   markets for goods and services but not to markets for factors of production.
D)   all markets except those in which demand is derived demand.E) A) and C)
F) B) and D)

Question 18

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.
 
-Refer to Table 18-4.What is the fourth worker's marginal product of labor?

Accepted Answer

A)   120 golf balls
B)   140 golf balls
C)   160 golf balls
D)   180 golf ballsE) B) and C)
F) A) and D)

Question 19

Table 18-3
 
-Refer to Table 18-3.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $2.50 in a competitive market.What is the marginal revenue product of the fourth worker?

Accepted Answer

A)   $200
B)   $300
C)   $400
D)   $500E) A) and B)
F) All of the above

Question 20

For a worker,the opportunity cost of an hour of leisure

Accepted Answer

A)   rises by $5 when his or her wage rises by $5 per hour.
B)   falls by $5 when his or her wage rises by $5 per hour.
C)   is the same for a corporate chief executive officer as it is for a garbage-collection worker.
D)   is determined by factors that are unrelated to his or her hourly wage.E) A) and C)
F) C) and D)

Exam 18: The Markets for the Factors of Production

An increase in a product's price will shift the labor demand curve for that product to the left.

Correct Answer
verified

Suppose the supply of capital decreases.As a result,the quantity of capital used in production and the rental price of capital will both fall.

Correct Answer
verified

The basic tools of supply and demand apply to

Correct Answer
verified

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

Correct Answer
verified

Table 18-2 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 18-2.What is the marginal product of the third unit of labor?

Correct Answer
verified

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Correct Answer
verified

Correct Answer
verified

If the marginal productivity of the sixth worker hired is less than the marginal productivity of the fifth worker hired,then the addition of the sixth worker causes total output to decline.

Correct Answer
verified

Which of the following events would lead to an increase in the supply of labor?

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. -Refer to Table 18-4.What is the fourth worker's marginal product of labor?

Correct Answer
verified

Labor-augmenting technology causes which of the following?

Correct Answer
verified

A change in the supply of one factor of production

Correct Answer
verified

Table 18-3 -Refer to Table 18-3.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $5 in a competitive market.What is the total revenue per day that the firm will earn if it employs five workers?

Correct Answer
verified

For a worker,the opportunity cost of an hour of leisure

Correct Answer
verified

If the demand curve for beef shifts to the right,then the value of the marginal product of labor for butchers will

Correct Answer
verified

Correct Answer
verified

Table 18-3 -Refer to Table 18-3.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $2.50 in a competitive market.What is the marginal revenue product of the fourth worker?

Correct Answer
verified

Figure 18-6 -Refer to Figure 18-6.Assume W₁ = $20 and W₂ = $22 and the market is always in equilibrium.Then the shift of the labor demand curve from D₁ to D₂

Correct Answer
verified

The term "factor market" applies to the market for

Correct Answer
verified

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

Correct Answer
verified
Wages are determined by the value of wor...
View Answer

Exam 18: The Markets for the Factors of Production

An increase in a product's price will shift the labor demand curve for that product to the left.

Correct AnswerverifiedShow Answer

Suppose the supply of capital decreases.As a result,the quantity of capital used in production and the rental price of capital will both fall.

Correct AnswerverifiedShow Answer

The basic tools of supply and demand apply to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 18-2 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 18-2.What is the marginal product of the third unit of labor?

Correct AnswerverifiedShow Answer

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the marginal productivity of the sixth worker hired is less than the marginal productivity of the fifth worker hired,then the addition of the sixth worker causes total output to decline.

Correct AnswerverifiedShow Answer

Which of the following events would lead to an increase in the supply of labor?

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. -Refer to Table 18-4.What is the fourth worker's marginal product of labor?

Correct AnswerverifiedShow Answer

Labor-augmenting technology causes which of the following?

Correct AnswerverifiedShow Answer

A change in the supply of one factor of production

Correct AnswerverifiedShow Answer

Table 18-3 -Refer to Table 18-3.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $5 in a competitive market.What is the total revenue per day that the firm will earn if it employs five workers?

Correct AnswerverifiedShow Answer

For a worker,the opportunity cost of an hour of leisure

Correct AnswerverifiedShow Answer

If the demand curve for beef shifts to the right,then the value of the marginal product of labor for butchers will

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 18-3 -Refer to Table 18-3.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $2.50 in a competitive market.What is the marginal revenue product of the fourth worker?

Correct AnswerverifiedShow Answer

Figure 18-6 -Refer to Figure 18-6.Assume W1 = $20 and W2 = $22 and the market is always in equilibrium.Then the shift of the labor demand curve from D1 to D2

Correct AnswerverifiedShow Answer

The term "factor market" applies to the market for

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedWages are determined by the value of wor...View AnswerShow Answer

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

Correct Answer
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Figure 18-6 -Refer to Figure 18-6.Assume W₁ = $20 and W₂ = $22 and the market is always in equilibrium.Then the shift of the labor demand curve from D₁ to D₂

Correct Answer
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Correct Answer
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Correct Answer
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Wages are determined by the value of wor...
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