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Exam 18: The Markets for the Factors of Production

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Question 71

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In 2015, the total income of all U.S. residents was approximately $16 trillion.

A) True
B) False

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Question 72

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Scenario 18-3 Gabrielle has two jobs, one for the winter and one for the summer. In the winter, she works as a lift attendant at a ski resort where she earns $16 per hour. During the summer, she drives a tour bus around the ski resort, earning $11 per hour. -Refer to Scenario 18-3. If Gabrielle takes more hours of leisure in the winter than in the summer, we can assume that her labor supply curve for the range of earnings in this example

A) is horizontal.
B) is vertical.
C) is upward sloping.
D) has a backward-bending portion.

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

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Question 73

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Scenario 18-6 Suppose the following events occur in the market for university economics professors. ​ Event 1: A recession in the U.S. economy lowers the opportunity cost of going to graduate school in economics to become a university economics professor. ​ Event 2: An increasing number of students in U.S. primary and secondary schools increases the number of students entering college, increasing the output price of university economics professors' services. -Refer to Scenario 18-6. As a result of these two events, holding all else constant, the equilibrium wages of university economics professors will

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

An increase in the supply of labor has the effect of

If a particular labor market were to convert from a competitive market to a monopsony, what effect would we expect on the number of workers hired? What effect would we expect on the wage paid to workers?

To maximize profit, a competitive firm hires workers up to the point of intersection of the

Economic theory predicts a close relationship between productivity and real wages. Does history confirm this relationship?

U.S. immigrants are less likely to be working than immigrants in other developed countries.

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 $8, how many workers would the firm employ if the weekly wage rate is $800?

A competitive firm sells its output for $60 per unit. Assume that labor is the only input that varies for the firm. The marginal product of the 10th worker is 20 units of output per day; the marginal product of the 11th worker is 16 units of output per day. The firm pays its workers a wage of $150 per day. For the 11th worker, the value of the marginal product of labor is

Suppose XYZ Corporation is currently renting 300 units of capital at a rental price of $500 units per unit. The value of the marginal product of the 300^th unit of capital is $400. How can the corporation increase its profit?

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

An increase in the output price will increase the firm's demand for labor, all else equal.

Figure 18-5 -Refer to Figure 18-5. Which of the following would shift the labor supply curve from S₂ to S₁?

If the wages of a dentist increase, which of the following statements is not true?

Technological advances can cause the labor demand curve to shift.

Figure 18-8 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 18-8. What is the marginal product of the third mechanic?

The substantial increases in output per worker over the last 50 or so years are largely explained by __________.

Table 18-6 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. ​ ​ $\begin{array} { | c | c | c | c | c | c | } \hline \begin{array} { c } \text { Labor } \\\text { (Number of } \\\text { workers) }\end{array} & \begin{array} { c } \text { Output } \\\text { (Cupcakes per } \\\text { day) }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Product } \\\text { of Labor } \\\text { (Cupcakes per } \\\text { day) }\end{array} & \begin{array} { c } \text { Value of the } \\\text { Marginal } \\\text { Product of Labor } \\\text { (Cupcakes) }\end{array} & \begin{array} { c } \text { Wage } \\\text { (Dollarsper } \\\text { worker per } \\\text { day) }\end{array} & \begin{array} { c } \text { Margin } \\\text { Profit } \\\text { (Dollar }\end{array} \\\hline 0 & 0 & & & 325 & \\\hline 1 & 200 & & & 325 & \\\hline 2 & 350 & & & 325 & \\\hline 3 & 475 & & & 325 & \\\hline 4 & 575 & & &325 & \\\hline\end{array}$ ​ -Refer to Table 18-6. What is the value of the marginal product of the first worker?