Question 1

Figure 18-5
The figure shows a particular profit­maximizing, competitive firm's value­of­marginal­product (VMP)  curve. On the horizontal axis, L represents the number of workers. The time frame is daily. 
-Refer to Figure 18-5. 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) B) and D)
F) None of the above

Question 2

According to the neoclassical theory of distribution, the wages paid to John Deere tractor assembly line workers are higher than those paid to fast food workers because assembly line workers

Accepted Answer

A)   have college degrees, on average, whereas fast food workers usually do not.
B)   produce a product of greater market value than do fast food workers.
C)   work in a less stressful environment than do fast food workers.
D)   are less likely to belong to a labor union than are fast food workers.E) A) and B)
F) A) and C)

Question 3

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school increases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium wage for doctors will

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   It is not possible to determine what will happen to the equilibrium wage.E) A) and B)
F) None of the above

Question 4

Suppose that a new invention increases the marginal productivity of labor, shifting labor demand to the right. Such an invention would be an example of

Accepted Answer

A)   labor-saving technology.
B)   labor-augmenting technology.
C)   revenue technology.
D)   supply-shifting technology.E) All of the above
F) C) and D)

Question 5

Table 18-7 
-Refer to Table 18-7. What is the value of the cell labeled II?

Accepted Answer

A)   -$100
B)   $100
C)   $200
D)   $300E) B) and C)
F) A) and D)

Question 6

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. Based on the given information, it is likely that Gertrude's firm has

Accepted Answer

A)   some influence over the wages paid to crew members but no influence over the price of salmon.
B)   some influence over the price of salmon but no influence over the wages paid to crew members.
C)   some influence over both the price of salmon and the wages paid to crew members.
D)   no influence over either the price of salmon or the wages paid to crew members.E) C) and D)
F) B) and C)

Question 7

In a representative labor market,

Accepted Answer

A)   the wage adjusts to balance the supply and demand for labor.
B)   the wage equals the value of the marginal product of labor.
C)   an increase in the supply of labor increases the equilibrium wage.
D)   Both a and b are correct.E) A) and D)
F) All of the above

Question 8

Fiona's hourly wage increases from $8 to $10. Which of the following describes a consequence of the increase in Fiona's wage?

Accepted Answer

A)   The opportunity cost of Fiona's leisure time has decreased.
B)   Fiona may choose to work fewer hours due to the increase in her wage.
C)   If Fiona's labor supply curve is upward sloping, she will choose to work fewer hours.
D)   Both a and b are correct.E) A) and B)
F) All of the above

Question 9

Which term below refers to "the accumulation of goods produced in the past that are being used in the present to produce new goods and services"?

Accepted Answer

A)   inventories
B)   products
C)   factors of production
D)   capitalE) All of the above
F) A) and D)

Question 10

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 $16.

Accepted Answer

A) True 
 B)False

Question 11

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. In the fresh Pacific salmon product market, Gertrude has some control over the

Accepted Answer

A)   price she charges for her fresh salmon.
B)   quantity of fresh salmon that she supplies to the market.
C)   competitive environment of the market.
D)   supply of labor in the market.E) A) and B)
F) B) and D)

Question 12

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 second worker?

Accepted Answer

A)   $400
B)   $800
C)   $1,600
D)   $4,800E) A) and B)
F) All of the above

Question 13

Factor markets are different from product markets in an important way because

Accepted Answer

A)   equilibrium is the exception, and not the rule, in factor markets.
B)   the demand for a factor of production is a derived demand.
C)   the demand for a factor of production is likely to be upward sloping, in violation of the law of demand.
D)   All of the above are correct.E) C) and D)
F) A) and D)

Question 14

Restaurants' demand for cooks and waiters is inseparably linked to the supply of .

Accepted Answer

The answer of Restaurants' demand for cooks and waiters is...

Question 15

Which of the following would not shift a market labor supply curve to the right?

Accepted Answer

A)   a decrease in the wage paid to workers in a competing market
B)   labor-augmenting technology
C)   a change in worker tastes so that workers want to retire later
D)   an increase in immigrationE) All of the above
F) C) and D)

Question 16

A competitive, profit-maximizing pays its workers a wage of $200 per day and it sells its output for $10 per unit. Determine the marginal product, on a daily basis, of the last worker hired.

Accepted Answer

Using the profit-max...

Question 17

When the wages paid to government economists increase, the labor supply curve for academic economists

Accepted Answer

A)   shifts to the left.
B)   shifts to the right.
C)   will become backward-sloping.
D)   will not change.E) A) and B)
F) A) and C)

Question 18

The distinction between purchase price and rental price applies to which factor(s)  of production?

Accepted Answer

A)   land only
B)   capital only
C)   land and capital only
D)   land, capital, and laborE) A) and B)
F) All of the above

Question 19

Consider the labor market for short-order cooks. A labor-augmenting technological change such as a faster food processor will cause

Accepted Answer

A)   both equilibrium wages and equilibrium employment to increase.
B)   both equilibrium wages and equilibrium employment to decrease.
C)   equilibrium wages to increase and equilibrium employment to decrease.
D)   equilibrium wages to decrease and equilibrium employment to increase.E) A) and C)
F) B) and C)

Question 20

The rental price of capital is determined by the

Accepted Answer

A)   forces of supply and demand in capital markets.
B)   amount of equity that is generated in equity markets.
C)   amount of bond financing used by profit-maximizing firms.
D)   amount of dividends paid out to stockholders by profit-maximizing firms.E) A) and B)
F) A) and C)

Exam 18: The Markets for the Factors of Production

When the wages paid to government economists increase, the labor supply curve for academic economists

Correct Answer
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Restaurants' demand for cooks and waiters is inseparably linked to the supply of .

Correct Answer
verified

Table 18-7 -Refer to Table 18-7. What is the value of the cell labeled II?

Correct Answer
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Fiona's hourly wage increases from $8 to $10. Which of the following describes a consequence of the increase in Fiona's wage?

Correct Answer
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Consider the labor market for short-order cooks. A labor-augmenting technological change such as a faster food processor will cause

Correct Answer
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The rental price of capital is determined by the

Correct Answer
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Which term below refers to "the accumulation of goods produced in the past that are being used in the present to produce new goods and services"?

Correct Answer
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According to the neoclassical theory of distribution, the wages paid to John Deere tractor assembly line workers are higher than those paid to fast food workers because assembly line workers

Correct Answer
verified

A competitive, profit-maximizing pays its workers a wage of $200 per day and it sells its output for $10 per unit. Determine the marginal product, on a daily basis, of the last worker hired.

Correct Answer
verified
Using the profit-max...
View Answer

Suppose that a new invention increases the marginal productivity of labor, shifting labor demand to the right. Such an invention would be an example of

Correct Answer
verified

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school increases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium wage for doctors will

Correct Answer
verified

In a representative labor market,

Correct Answer
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Factor markets are different from product markets in an important way because

Correct Answer
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Which of the following would not shift a market labor supply curve to the right?

Correct Answer
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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 $16.

Correct Answer
verified

The distinction between purchase price and rental price applies to which factor(s) of production?

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

When the wages paid to government economists increase, the labor supply curve for academic economists

Correct AnswerverifiedShow Answer

Restaurants' demand for cooks and waiters is inseparably linked to the supply of .

Correct AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. What is the value of the cell labeled II?

Correct AnswerverifiedShow Answer

Fiona's hourly wage increases from $8 to $10. Which of the following describes a consequence of the increase in Fiona's wage?

Correct AnswerverifiedShow Answer

Consider the labor market for short-order cooks. A labor-augmenting technological change such as a faster food processor will cause

Correct AnswerverifiedShow Answer

The rental price of capital is determined by the

Correct AnswerverifiedShow Answer

Which term below refers to "the accumulation of goods produced in the past that are being used in the present to produce new goods and services"?

Correct AnswerverifiedShow Answer

According to the neoclassical theory of distribution, the wages paid to John Deere tractor assembly line workers are higher than those paid to fast food workers because assembly line workers

Correct AnswerverifiedShow Answer

A competitive, profit-maximizing pays its workers a wage of $200 per day and it sells its output for $10 per unit. Determine the marginal product, on a daily basis, of the last worker hired.

Correct AnswerverifiedUsing the profit-max...View AnswerShow Answer

Suppose that a new invention increases the marginal productivity of labor, shifting labor demand to the right. Such an invention would be an example of

Correct AnswerverifiedShow Answer

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school increases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium wage for doctors will

Correct AnswerverifiedShow Answer

In a representative labor market,

Correct AnswerverifiedShow Answer

Factor markets are different from product markets in an important way because

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following would not shift a market labor supply curve to the right?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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 $16.

Correct AnswerverifiedShow Answer

The distinction between purchase price and rental price applies to which factor(s) of production?

Correct AnswerverifiedShow Answer

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Using the profit-max...
View Answer

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