Question 1

Oil field workers' wages are directly tied to the world price of oil.

Accepted Answer

A) True 
 B)False

Question 2

Table 18-12
The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week.
 
-Refer to Table 18-12. Let Q represent the number of boxes of envelopes produced per week. One point on this firm's production function is

Accepted Answer

A)   (L = 1, Q = 106) .
B)   (L = 2, Q = 92) .
C)   (L = 2, Q = 106) .
D)   (L = 2, Q = 240) .E) C) and D)
F) B) and C)

Question 3

Suppose that a college professor is creating an exam in her university office. Which of the following would be an example of a factor of production used by the professor? (i)  the professor's time
(ii)  a computer software program into which the professor types the exam questions
(iii)  the physical space of the professors office where she works when creating the exam
(iv)  the interest on the professor's home mortgage

Accepted Answer

A)   (i)  only
B)   (i)  and (ii)  only
C)   (i) , (ii) , and (iii)  only
D)   (i) , (ii) , (iii) , and (iv) E) None of the above
F) C) and D)

Question 4

The opportunity cost of leisure is impossible to measure because we cannot measure leisure time in dollars.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is an example of a factor of production?

Accepted Answer

A)   rent
B)   interest
C)   land
D)   Social Security paymentsE) A) and B)
F) B) and C)

Question 6

Capital income does not include income paid to households for the use of their capital.

Accepted Answer

A) True 
 B)False

Question 7

When a production function exhibits a diminishing, but positive, marginal product of labor,

Accepted Answer

A)   output increases, but at an increasing rate, as more workers are employed.
B)   output increases, but at a decreasing rate, as more workers are employed.
C)   output declines as more workers are employed.
D)   the effects on marginal product are ambiguous.E) A) and D)
F) A) and C)

Question 8

Describe the process by which the market for capital and the market for land reach equilibrium. As part of your description, elaborate on the role of the stock of the resource versus the flow of services from the resource.

Accepted Answer

Equilibriums in the markets for land and...

Question 9

Dan owns one of the many bakeries in New York City. Which of the following events will lead to an increase in Dan's demand for the services of bakers? (i)  The price of muffins increases. (Muffins are Dan's specialty.) 
(ii)  Dan adds three new ovens to the kitchen area to help the bakers work faster.
(iii)  Local bakers form a union to protect themselves from low wages.

Accepted Answer

A)   (i)  and (ii)  only
B)   (ii)  and (iii)  only
C)   (i)  and (iii)  only
D)   (i) , (ii) , and (iii) E) A) and B)
F) None of the above

Question 10

The factors of production are best defined as the

Accepted Answer

A)   output produced from raw materials.
B)   inputs used to produce goods and services.
C)   wages paid to the workforce.
D)   goods and services sold in the market.E) C) and D)
F) B) and C)

Question 11

Describe the difference between a diminishing marginal product of labor and a negative marginal product of labor. Why would a profit-maximizing firm always choose to operate where the marginal product of labor is decreasing (but not negative)?

Accepted Answer

Diminishing marginal product of labor me...

Question 12

Table 18-1
 
-Refer to Table 18-1. What is the marginal product of the third worker?

Accepted Answer

A)   7
B)   8
C)   25
D)   75E) B) and C)
F) B) and D)

Question 13

Table 18-7
 
-Refer to Table 18-7. What is the market price of the final good?

Accepted Answer

A)   $5
B)   $6
C)   $8
D)   $10E) C) and D)
F) A) and B)

Question 14

Table 18-2
 
-Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week by various numbers of workers. If the price per bracelet in a perfectly competitive product market is $10, how many workers would the firm employ if the weekly wage rate is $375?

Accepted Answer

A)   2
B)   3
C)   4
D)   5E) B) and C)
F) A) and B)

Question 15

Table 18-8
Harold and Maude own a dance studio where they and their employees teach ballroom dancing. Their company is a competitive, profit-maximizing firm. Harold and Maude's production function is detailed in the table below.
 
-Refer to Table 18-8. If Harold and Maude pay their workers $80 per day and charge $20 per dance lesson, what is the value of the marginal product of the third worker?

Accepted Answer

A)   $400
B)   $800
C)   $1,000
D)   $1,600E) All of the above
F) None of the above

Question 16

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 C)
F) A) and B)

Question 17

The marginal product of any factor of production depends on

Accepted Answer

A)   the quantity of the factor used.
B)   the price of the final good.
C)   the demand for the final good.
D)   All of the above are correct.E) A) and D)
F) B) and D)

Question 18

When a labor market experiences a surplus of labor, there is downward pressure on

Accepted Answer

A)   the supply of labor.
B)   the final product price.
C)   wages.
D)   the demand for labor.E) A) and C)
F) B) and D)

Question 19

Figure 18-6 
-Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers decrease, what happens in the market for bread bakers?

Accepted Answer

A)   Demand increases from D1 to D2.
B)   Demand decreases from D2 to D1.
C)   Supply increases from S1 to S2.
D)   Supply decreases from S2 to S1.E) All of the above
F) A) and D)

Question 20

Land, labor, and capital are examples of factors of production.

Accepted Answer

A) True 
 B)False

Exam 18: The Markets for the Factors of Production

When a labor market experiences a surplus of labor, there is downward pressure on

Correct Answer
verified

Oil field workers' wages are directly tied to the world price of oil.

Correct Answer
verified

Table 18-1 -Refer to Table 18-1. What is the marginal product of the third worker?

Correct Answer
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Table 18-7 -Refer to Table 18-7. What is the market price of the final good?

Correct Answer
verified

Correct Answer
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Which of the following is an example of a factor of production?

Correct Answer
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Land, labor, and capital are examples of factors of production.

Correct Answer
verified

When a production function exhibits a diminishing, but positive, marginal product of labor,

Correct Answer
verified

Table 18-12 The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. -Refer to Table 18-12. Let Q represent the number of boxes of envelopes produced per week. One point on this firm's production function is

Correct Answer
verified

The factors of production are best defined as the

Correct Answer
verified

Describe the difference between a diminishing marginal product of labor and a negative marginal product of labor. Why would a profit-maximizing firm always choose to operate where the marginal product of labor is decreasing (but not negative)?

Correct Answer
verified
Diminishing marginal product of labor me...
View Answer

Capital income does not include income paid to households for the use of their capital.

Correct Answer
verified

Describe the process by which the market for capital and the market for land reach equilibrium. As part of your description, elaborate on the role of the stock of the resource versus the flow of services from the resource.

Correct Answer
verified
Equilibriums in the markets for land and...
View Answer

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers decrease, what happens in the market for bread bakers?

Correct Answer
verified

Table 18-2 -Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week by various numbers of workers. If the price per bracelet in a perfectly competitive product market is $10, how many workers would the firm employ if the weekly wage rate is $375?

Correct Answer
verified

The opportunity cost of leisure is impossible to measure because we cannot measure leisure time in dollars.

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 marginal product of any factor of production depends on

Correct Answer
verified

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

When a labor market experiences a surplus of labor, there is downward pressure on

Correct AnswerverifiedShow Answer

Oil field workers' wages are directly tied to the world price of oil.

Correct AnswerverifiedShow Answer

Table 18-1 -Refer to Table 18-1. What is the marginal product of the third worker?

Correct AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. What is the market price of the final good?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is an example of a factor of production?

Correct AnswerverifiedShow Answer

Land, labor, and capital are examples of factors of production.

Correct AnswerverifiedShow Answer

When a production function exhibits a diminishing, but positive, marginal product of labor,

Correct AnswerverifiedShow Answer

Table 18-12 The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. -Refer to Table 18-12. Let Q represent the number of boxes of envelopes produced per week. One point on this firm's production function is

Correct AnswerverifiedShow Answer

The factors of production are best defined as the

Correct AnswerverifiedShow Answer

Describe the difference between a diminishing marginal product of labor and a negative marginal product of labor. Why would a profit-maximizing firm always choose to operate where the marginal product of labor is decreasing (but not negative)?

Correct AnswerverifiedDiminishing marginal product of labor me...View AnswerShow Answer

Capital income does not include income paid to households for the use of their capital.

Correct AnswerverifiedShow Answer

Describe the process by which the market for capital and the market for land reach equilibrium. As part of your description, elaborate on the role of the stock of the resource versus the flow of services from the resource.

Correct AnswerverifiedEquilibriums in the markets for land and...View AnswerShow Answer

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers decrease, what happens in the market for bread bakers?

Correct AnswerverifiedShow Answer

Table 18-2 -Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week by various numbers of workers. If the price per bracelet in a perfectly competitive product market is $10, how many workers would the firm employ if the weekly wage rate is $375?

Correct AnswerverifiedShow Answer

The opportunity cost of leisure is impossible to measure because we cannot measure leisure time in dollars.

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 marginal product of any factor of production depends on

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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Diminishing marginal product of labor me...
View Answer

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Correct Answer
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Equilibriums in the markets for land and...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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