Question 1

The Black Death in fourteenth-century Europe resulted in

Accepted Answer

A)  a lower marginal product of labor of surviving workers.
B)  a higher marginal product of labor of surviving workers.
C)  economic hardship for surviving peasants.
D)  economic prosperity for surviving landowners.E) B) and C)
F) None of the above

Question 2

If the value of the marginal product of labor exceeds the wage,then hiring another worker increases the firm's

Accepted Answer

A)  profit.
B)  total cost.
C)  total revenue.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 3

As the rental price of capital decreases,more capital is used in production and the marginal product of capital increases.

Accepted Answer

A) True 
 B)False

Question 4

Consider the market for capital equipment.Suppose the value of the marginal product of capital equipment increases.Holding all else constant,what will happen to the equilibrium quantity of capital equipment?

Accepted Answer

A)  The equilibrium quantity of capital equipment increases.
B)  The equilibrium quantity of capital equipment decreases.
C)  The equilibrium quantity of capital equipment does not change.
D)  It is not possible to determine what will happen to the equilibrium quantity of capital equipment.E) All of the above
F) B) and D)

Question 5

Which of the following statements is correct? An individual worker's labor supply curve

Accepted Answer

A)  can never slope downward.
B)  slopes downward if that person responds to a higher wage by taking fewer hours of leisure per week.
C)  slopes downward if that person responds to a higher opportunity cost of leisure by working fewer hours per week.
D)  slopes upward if that person works the same number of hours per week, regardless of the opportunity cost of leisure.E) None of the above
F) A) and B)

Question 6

Scenario 18-2
Jerry has two jobs, one for the winter and one for the summer. In the winter, he workers as a lift attendant at a ski resort where he earns $10 per hour. During the summer, Jerry drives a tour bus around the ski resort, earning $12 per hour.
-Refer to Scenario 18-2.Assume that Jerry has an upward-sloping labor supply curve.If the opportunity cost of Jerry's leisure time increases,he will respond by working

Accepted Answer

A)  more hours.
B)  fewer hours.
C)  an equal number of hours.
D)  a number of hours that cannot be determined from the information.The labor demand curve is needed to make this determination.E) B) and D)
F) A) and B)

Question 7

Table 18-6
 
-Refer to Table 18-6.Suppose that the firm pays its workers $75 per day.Each unit of output sells for $10.How many days of labor should the firm hire?

Accepted Answer

A)  1
B)  2
C)  3
D)  4E) B) and C)
F) A) and B)

Question 8

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.

Accepted Answer

There are two possible direct effects: O...

Question 9

Table 18-5
 
-Refer to Table 18-5.What is the value for the cell labeled DD?

Accepted Answer

A)  -$100
B)  $300
C)  $100
D)  $50E) C) and D)
F) B) and D)

Question 10

Consider the labor market for computer programmers,which is in equilibrium.During the late 1990s,the value of the marginal product of all computer programmers increased dramatically.Holding all else equal,what effect did this process have on the labor market for computer programmers?

Accepted Answer

A)  The equilibrium wage increased, and the equilibrium quantity of labor increased.
B)  The equilibrium wage increased, and the equilibrium quantity of labor decreased.
C)  The equilibrium wage decreased, and the equilibrium quantity of labor increased.
D)  The equilibrium wage decreased, and the equilibrium quantity of labor decreased.E) A) and B)
F) A) and C)

Question 11

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)  Luddite technology.
D)  supply-shifting technology.E) A) and D)
F) B) and D)

Question 12

As a result of severe flooding,a farmer loses half of his productive farmland.He should expect to see the marginal productivity of his remaining land

Accepted Answer

A)  increase.
B)  remain unchanged.
C)  decrease, but remain positive.
D)  decrease and become negative.E) A) and D)
F) B) and C)

Question 13

Scenario 18-1
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 18-1.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) B) and C)
F) A) and D)

Question 14

If consumers demand more genetically engineered foods,then the value of genetic engineers' marginal product of labor will

Accepted Answer

A)  rise.
B)  fall.
C)  remain unchanged.
D)  rise or fall; either is possible.E) B) and C)
F) A) and B)

Question 15

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

Accepted Answer

A) True 
 B)False

Question 16

In 2005,the total income of all U.S.residents was about $8 trillion.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)  marginal product curve and the wage line.
B)  value of marginal product curve and the wage line.
C)  value of marginal product curve and the marginal revenue curve.
D)  total revenue curve and the wage line.E) C) and D)
F) A) and C)

Question 18

In the United States economy,which of the following factors of production is considered to be the most important in terms of the magnitude of income earned by that factor of production?

Accepted Answer

A)  land
B)  labor
C)  profit
D)  capitalE) B) and C)
F) A) and B)

Question 19

What happens to the labor supply curves for academic economists when the wages paid to government economists increase?

Accepted Answer

A)  Labor supply decreases for government economists.
B)  Labor supply increases for academic economists.
C)  Labor supply decreases for academic economists.
D)  Both a and c are correct.E) All of the above
F) B) and C)

Question 20

Figure 18-3
 
-Refer to Figure 18-3.The shift of the labor supply curve from S₁ to S₂ could possibly be explained by

Accepted Answer

A)  a change in workers' attitudes toward the work-leisure tradeoff.
B)  decreases in wages in other labor markets.
C)  immigration of workers into the region or country.
D)  All of the above are correct.E) None of the above
F) A) and D)

Exam 18: The Markets for the Factors of Production

Correct Answer
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There are two possible direct effects: O...
View Answer

Consider the market for capital equipment.Suppose the value of the marginal product of capital equipment increases.Holding all else constant,what will happen to the equilibrium quantity of capital equipment?

Correct Answer
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Figure 18-3 -Refer to Figure 18-3.The shift of the labor supply curve from S₁ to S₂ could possibly be explained by

Correct Answer
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Table 18-5 -Refer to Table 18-5.What is the value for the cell labeled DD?

Correct Answer
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As the rental price of capital decreases,more capital is used in production and the marginal product of capital increases.

Correct Answer
verified

Correct Answer
verified

Which of the following statements is correct? An individual worker's labor supply curve

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

If consumers demand more genetically engineered foods,then the value of genetic engineers' marginal product of labor will

Correct Answer
verified

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

Correct Answer
verified

In the United States economy,which of the following factors of production is considered to be the most important in terms of the magnitude of income earned by that factor of production?

Correct Answer
verified

What happens to the labor supply curves for academic economists when the wages paid to government economists increase?

Correct Answer
verified

The Black Death in fourteenth-century Europe resulted in

Correct Answer
verified

Table 18-6 -Refer to Table 18-6.Suppose that the firm pays its workers $75 per day.Each unit of output sells for $10.How many days of labor should the firm hire?

Correct Answer
verified

As a result of severe flooding,a farmer loses half of his productive farmland.He should expect to see the marginal productivity of his remaining land

Correct Answer
verified

Consider the labor market for computer programmers,which is in equilibrium.During the late 1990s,the value of the marginal product of all computer programmers increased dramatically.Holding all else equal,what effect did this process have on the labor market for computer programmers?

Correct Answer
verified

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

In 2005,the total income of all U.S.residents was about $8 trillion.

Correct Answer
verified

If the value of the marginal product of labor exceeds the wage,then hiring another worker increases the firm's

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Correct AnswerverifiedThere are two possible direct effects: O...View AnswerShow Answer

Consider the market for capital equipment.Suppose the value of the marginal product of capital equipment increases.Holding all else constant,what will happen to the equilibrium quantity of capital equipment?

Correct AnswerverifiedShow Answer

Figure 18-3 -Refer to Figure 18-3.The shift of the labor supply curve from S₁ to S₂ could possibly be explained by

Correct AnswerverifiedShow Answer

Table 18-5 -Refer to Table 18-5.What is the value for the cell labeled DD?

Correct AnswerverifiedShow Answer

As the rental price of capital decreases,more capital is used in production and the marginal product of capital increases.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is correct? An individual worker's labor supply curve

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If consumers demand more genetically engineered foods,then the value of genetic engineers' marginal product of labor will

Correct AnswerverifiedShow Answer

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

Correct AnswerverifiedShow Answer

In the United States economy,which of the following factors of production is considered to be the most important in terms of the magnitude of income earned by that factor of production?

Correct AnswerverifiedShow Answer

What happens to the labor supply curves for academic economists when the wages paid to government economists increase?

Correct AnswerverifiedShow Answer

The Black Death in fourteenth-century Europe resulted in

Correct AnswerverifiedShow Answer

Table 18-6 -Refer to Table 18-6.Suppose that the firm pays its workers $75 per day.Each unit of output sells for $10.How many days of labor should the firm hire?

Correct AnswerverifiedShow Answer

As a result of severe flooding,a farmer loses half of his productive farmland.He should expect to see the marginal productivity of his remaining land

Correct AnswerverifiedShow Answer

Consider the labor market for computer programmers,which is in equilibrium.During the late 1990s,the value of the marginal product of all computer programmers increased dramatically.Holding all else equal,what effect did this process have on the labor market for computer programmers?

Correct AnswerverifiedShow 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

In 2005,the total income of all U.S.residents was about $8 trillion.

Correct AnswerverifiedShow Answer

If the value of the marginal product of labor exceeds the wage,then hiring another worker increases the firm's

Correct AnswerverifiedShow Answer

Correct Answer
verified
There are two possible direct effects: O...
View Answer

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