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Exam 18: The Markets for the Factors of Production

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Question 41

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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 18-11. The marginal product of labor begins to diminish with the addition of which worker?

A) the 1st worker
B) the 2nd worker
C) the 3rd worker
D) the 4th worker

E) B) and C)
F) All of the above

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Question 42

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Figure 18-9 -Refer to Figure 18-9. If the marginal product of labor falls and the price of apples remains unchanged, (i) the value of the marginal product of labor will fall. (ii) the quantity of labor demanded will increase above L₁. (iii) the labor supply curve will remain unchanged.

A) (i) and (ii) only
B) (ii) and (iii) only
C) (i) and (iii) only
D) (i) , (ii) , and (iii)

E) None of the above
F) A) and B)

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Question 43

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Table 18-10 -Refer to Table 18-10. This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor. Each baseball sells for $5 in a competitive market. What is the total revenue per day that the firm will earn if it employs five workers?

The accumulation of machinery and buildings used in the production of new goods and services is referred to as

If men's preferences for work change such that more men want to be stay-at-home fathers, the wages paid to men who remain in the workplace would rise, all else equal.

Suppose a shift of the labor-demand curve results in an increase of $5 in the equilibrium wage. How does this shift affect the value of the marginal product of labor?

In the 1980s, the dangerous Ebola virus entered the United States through contaminated monkeys that were imported for use in medical experiments. Suppose this virus had not been contained but had spread to the general population. Assume that the virus is lethal in half of the people who are exposed to it. Describe the resulting effect on labor productivity.

Average productivity can be measured as total output divided by total units of labor.

Suppose that the market for labor is initially in equilibrium. Suppose that workers' tastes change so that they choose to retire at age 70 rather than age 67. Then the equilibrium wage

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

When economists refer to a firm's capital, they are describing the

A change in the supply of one factor of production

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 18-11. What is the value of the marginal product of the second worker?

The marginal product of land depends on the quantity of land that is available.

Along the horizontal axis of the production function we typically measure

Figure 18-9 -Refer to Figure 18-9. If the price of apples decreases, the

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 second worker is

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?

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 wage for university economics professors will

Consider the labor market for computer programmers. During the late 1990s, the value of the marginal product of all computer programmers increased dramatically. Holding all else equal, the equilibrium wage in the labor market for computer programmers