Question 1

Figure 18-5
The figure shows a particular profit-maximizing, competitive 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 18-5. The firm would choose to hire three workers if

Accepted Answer

A)  the market wage for a day's work is $220.
B)  the market wage for a day's work is $260.
C)  the output price is $220.
D)  the output price is $260.E) A) and D)
F) A) and B)

Question 2

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?

Accepted Answer

A)  $540
B)  $600
C)  $675
D)  $810E) A) and B)
F) A) and C)

Question 3

Suppose that the market for labor is initially in equilibrium. If the firm employs labor-saving technology, the equilibrium wage

Accepted Answer

A)  and the equilibrium quantity of labor will rise.
B)  and the equilibrium quantity of labor will fall.
C)  will rise, and the equilibrium quantity of labor will fall.
D)  will fall, and the equilibrium quantity of labor will rise.E) C) and D)
F) None of the above

Question 4

Which of the following would shift a market labor supply curve to the left?

Accepted Answer

A)  a decrease in the price of output
B)  an increase in the price of output
C)  a labor-augmenting technological change
D)  better employment opportunities in a closely-related jobE) None of the above
F) A) and B)

Question 5

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

Accepted Answer

A)  The opportunity cost of Fiona's leisure time has increased.
B)  Fiona may choose to work more hours due to the decrease in her wage.
C)  Fiona may choose to work fewer hours due to the decrease in her wage.
D)  Both b and c are correct.E) A) and C)
F) A) and D)

Question 6

Firms pay out a portion of their earnings in the form of interest and dividends, and those payments are a portion of the economy's capital income.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Technological advances can cause the labor demand curve to shift.

Accepted Answer

A) True 
 B)False

Question 9

Scenario 18-8
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: A decreasing number of students in U.S. primary and secondary schools decreases the number of students entering college, decreasing the output price of university economics professors' services.
-Refer to Scenario 18-8. As a result of these two events, holding all else constant, the equilibrium wages of university economics professors 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) B) and C)
F) A) and B)

Question 10

Table 18-B
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. 
-Refer to Table 18-B. What is the value of the marginal product of the second worker?

Accepted Answer

A)  $150
B)  $350
C)  $450
D)  $1,050E) A) and B)
F) A) and C)

Question 11

The U.S. economy experienced a significant slowdown in productivity growth that lasted from about 1973 to about __________.

Accepted Answer

The answer of The U.S. economy experienced a significant slowdown...

Question 12

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. The marginal product of the fourth worker is

Accepted Answer

A)  60 units of output.
B)  75 units of output.
C)  285 units of output.
D)  345 units of output.E) B) and D)
F) B) and C)

Question 13

A recent flood in the Midwest has destroyed much of the farmland that lies in fertile regions near the rivers. Describe the effect of the flood on the marginal productivity of land, labor, and capital. How would the flood affect the price of inputs? Provide some examples.

Accepted Answer

The flood would increase the marginal pr...

Question 14

Figure 18-4
The graph below illustrates the market for nurses who work in doctors' offices. 
-Refer to Figure 18-4. Each August many high school and college students visit a doctor's office to have a sports physical. If the price of sports physicals rises, what happens in the market for nurses?

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

Question 15

Suppose that an industrial accident at a factory destroys a significant number of high-speed blenders that bartenders use to mix frozen drinks. What will happen in the labor market for bartenders?

Accepted Answer

A)  Both wages and employment will increase.
B)  Both wages and employment will decrease.
C)  Wages will increase, and employment will decrease.
D)  Wages will decrease, and employment will increase.E) None of the above
F) A) and C)

Question 16

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) None of the above
F) B) and C)

Question 17

What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

Accepted Answer

A)  Labor supply decreases in Mexico and decreases in the United States.
B)  Labor supply increases in the United States and increases in Mexico.
C)  Labor supply increases in the United States and decreases in Mexico.
D)  Labor supply increases in Mexico and decreases in United States.E) B) and C)
F) A) and B)

Question 18

A consultant interviews the hiring manager of a small, profit-maximizing firm. The manager explains that the firm used to have 15 employees, but the most-recently-hired employee has just left the company. The firm is currently advertising to hire a worker to replace the employee who just left at the same wage rate. We can infer that

Accepted Answer

A)  for the 15th employee, the wage exceeded the value of the marginal product of labor.
B)  for the 15th employee, the value of the marginal product of labor exceeded the wage.
C)  the firm is too large and should remain at 14 employees.
D)  the firm is no longer attempting to maximize profits.E) B) and C)
F) None of the above

Question 19

Assume all capital is owned by firms, rather than by households. Under this assumption, capital is paid according to the value of its marginal product

Accepted Answer

A)  only if this income is transmitted to households in the form of interest.
B)  only if this income is transmitted to households in the form of dividends.
C)  only if this income is transmitted to households in the form of interest or dividends.
D)  regardless of whether this income is transmitted to households in the form of interest or dividends or whether it is kept within firms as retained earnings.E) B) and D)
F) B) and C)

Question 20

Table 18-3 
-Refer to Table 18-3. Which firm's production function exhibits constant marginal product?

Accepted Answer

A)  Firm A
B)  Firm B
C)  Firm C
D)  Firm DE) B) and C)
F) B) and D)

Exam 18: The Markets for the Factors of Production

A recent flood in the Midwest has destroyed much of the farmland that lies in fertile regions near the rivers. Describe the effect of the flood on the marginal productivity of land, labor, and capital. How would the flood affect the price of inputs? Provide some examples.

Correct Answer
verified
The flood would increase the marginal pr...
View Answer

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

Correct Answer
verified

Table 18-3 -Refer to Table 18-3. Which firm's production function exhibits constant marginal product?

Correct Answer
verified

Correct Answer
verified

Technological advances can cause the labor demand curve to shift.

Correct Answer
verified

Which of the following would shift a market labor supply curve to the left?

Correct Answer
verified

Table 18-B 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. -Refer to Table 18-B. What is the value of the marginal product of the second worker?

Correct Answer
verified

Figure 18-5 The figure shows a particular profit-maximizing, competitive 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 18-5. The firm would choose to hire three workers if

Correct Answer
verified

The U.S. economy experienced a significant slowdown in productivity growth that lasted from about 1973 to about __________.

Correct Answer
verified

The term "factor market" applies to the market for

Correct Answer
verified

Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -Refer to Figure 18-4. Each August many high school and college students visit a doctor's office to have a sports physical. If the price of sports physicals rises, what happens in the market for nurses?

Correct Answer
verified

Correct Answer
verified

Suppose that an industrial accident at a factory destroys a significant number of high-speed blenders that bartenders use to mix frozen drinks. What will happen in the labor market for bartenders?

Correct Answer
verified

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

Correct Answer
verified

Suppose that the market for labor is initially in equilibrium. If the firm employs labor-saving technology, the equilibrium wage

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. The marginal product of the fourth worker is

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 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?

Correct Answer
verified

Firms pay out a portion of their earnings in the form of interest and dividends, and those payments are a portion of the economy's capital income.

Correct Answer
verified

What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

Correct Answer
verified

Assume all capital is owned by firms, rather than by households. Under this assumption, capital is paid according to the value of its marginal product

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

A recent flood in the Midwest has destroyed much of the farmland that lies in fertile regions near the rivers. Describe the effect of the flood on the marginal productivity of land, labor, and capital. How would the flood affect the price of inputs? Provide some examples.

Correct AnswerverifiedThe flood would increase the marginal pr...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Table 18-3 -Refer to Table 18-3. Which firm's production function exhibits constant marginal product?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Technological advances can cause the labor demand curve to shift.

Correct AnswerverifiedShow Answer

Which of the following would shift a market labor supply curve to the left?

Correct AnswerverifiedShow Answer

Table 18-B 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. -Refer to Table 18-B. What is the value of the marginal product of the second worker?

Correct AnswerverifiedShow Answer

Figure 18-5 The figure shows a particular profit-maximizing, competitive 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 18-5. The firm would choose to hire three workers if

Correct AnswerverifiedShow Answer

The U.S. economy experienced a significant slowdown in productivity growth that lasted from about 1973 to about __________.

Correct AnswerverifiedShow Answer

The term "factor market" applies to the market for

Correct AnswerverifiedShow Answer

Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -Refer to Figure 18-4. Each August many high school and college students visit a doctor's office to have a sports physical. If the price of sports physicals rises, what happens in the market for nurses?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that an industrial accident at a factory destroys a significant number of high-speed blenders that bartenders use to mix frozen drinks. What will happen in the labor market for bartenders?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose that the market for labor is initially in equilibrium. If the firm employs labor-saving technology, the equilibrium wage

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. The marginal product of the fourth worker is

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 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?

Correct AnswerverifiedShow Answer

Firms pay out a portion of their earnings in the form of interest and dividends, and those payments are a portion of the economy's capital income.

Correct AnswerverifiedShow Answer

What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

Correct AnswerverifiedShow Answer

Assume all capital is owned by firms, rather than by households. Under this assumption, capital is paid according to the value of its marginal product

Correct AnswerverifiedShow Answer

Correct Answer
verified
The flood would increase the marginal pr...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified