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Exam 18: The Markets for the Factors of Production

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Question 81

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Sunshine's Organic Market sells organic produce. Assume that labor is the only input that varies for the firm. The store manager has determined that if she hires 9 workers, the store can sell 200 pounds of produce per day. If she hires 10 workers, the store can sell 230 pounds of produce per day. The store earns $4 for each pound of produce that it sells, and the manager pays each worker $60 per day. Which of the following is correct?

A) For the 10th worker, the marginal product is 20 pounds of produce per day.
B) For the 10th worker, the marginal revenue product is $120 per day.
C) The marginal profit from the 10th worker is $120.
D) All of the above are correct.

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

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Question 82

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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 bakery profession becomes more attractive to young women and men because of a new reality television show, what happens in the market for bakers?

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) A) and B)
F) A) and C)

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Question 83

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Movements of workers from country to country can cause shifts in the labor supply curves for both countries.

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 hires each unit of labor for $600 per week, and each unit of output sells for $9. What is the value of the marginal product of the third worker?

From 1960 to 2015, inflation-adjusted wages increased by 165 percent in the U.S., and yet firms more than doubled the amount of labor they employed.

Harold owns a cranberry bog in which he grows cranberries. Harold's farm is a competitive, profit-maximizing firm. As such, Harold much decide (i) How many cranberries to sell. (ii) What price to charge for his cranberries. (iii) What wages to pay his workers. (iv) How many workers to hire.

The Black Death in fourteenth-century Europe resulted in

If the demand for labor in a particular industry increases, the equilibrium wage in that industry will also increase.

The equilibrium rental income paid to landowners at any point in time equals the

Does history suggest that most technological progress is labor-saving or labor-augmenting?

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

Consider the market for university economics professors. Suppose the opportunity cost of going to graduate school to get a Ph.D. in economics decreases for many individuals. Suppose it generally takes about five years to get a Ph.D. in economics. Holding all else constant, in five years the equilibrium quantity of university economics professors will

Which of the following could increase the labor-supply curve for computer-repair technicians?

An increase in the wages paid to high-school student who detassle corn will increase the labor supply of high-school students who weed soybean fields, all else equal.

Scenario 18-7 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 18-7. As a result of these two events, holding all else constant, the equilibrium quantity of university economics professors will

An increase in immigration will lower the equilibrium wage, all else held constant.

Sunshine's Organic Market sells organic produce. Assume that labor is the only input that varies for the firm. The store manager has determined that if she hires 5 workers, the store can sell 150 pounds of produce per day. If she hires 6 workers, the store can sell 170 pounds of produce per day. The store earns $4 for each pound of produce that it sells, and the manager pays each worker $60 per day. Which of the following is not correct?

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.

Which of the following is not correct?

Along the vertical axis of the production function we typically measure