Question 1

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,what effect did this process have on the equilibrium wage in the labor market for computer programmers?

Accepted Answer

A)   The equilibrium wage increased.
B)   The equilibrium wage decreased.
C)   The equilibrium wage did not change.
D)   It is not possible to determine the equilibrium wage.E) A) and D)
F) B) and C)

Question 2

If the demand curve for computer games shifts to the left,then the value of the marginal product of labor for computer game authors will

Accepted Answer

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

Question 3

Table 18-1
 
-Refer to Table 18-1.Which firm's production function exhibits diminishing marginal product?

Accepted Answer

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

Question 4

If the price of airline tickets falls,what will happen to the demand curve for flight attendants?

Accepted Answer

A)   It will shift to the right.
B)   It will shift to the left.
C)   The direction of the shift is ambiguous.
D)   It will remain unchanged.E) A) and C)
F) All of the above

Question 5

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,what effect does this have on the equilibrium quantity of health care employees?

Accepted Answer

A)   The equilibrium quantity increases.
B)   The equilibrium quantity decreases.
C)   The equilibrium quantity does not change.
D)   It is not possible to determine what happens to the equilibrium quantity.E) A) and D)
F) None of the above

Question 6

Which of the following correctly describes 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) None of the above
F) B) and C)

Question 7

The owners of capital resources are compensated according to the

Accepted Answer

A)   purchase price of the capital stock.
B)   marginal product of capital.
C)   value of the marginal product of capital.
D)   absolute level of production of final goods and services.E) All of the above
F) A) and B)

Question 8

Which of the following accurately describes how earnings from capital eventually get paid to households?

Accepted Answer

A)   Households can own a stock of capital and rent it to firms.
B)   Households lend money to firms,who then pay interest to the households.
C)   Households that own stock in firms receive dividends.
D)   All of the above are correct.E) C) and D)
F) B) and C)

Question 9

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) B) and C)

Question 10

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

Question 11

Since workers in the U.S.economy receive most of the total income earned,which of the following factors of production is considered to be the most important?

Accepted Answer

A)   Profit
B)   Wages
C)   Interest
D)   LaborE) B) and C)
F) C) and D)

Question 12

The value of the marginal product of labor

Accepted Answer

A)   increases when the price of output decreases.
B)   is the firm's demand for labor.
C)   equals the marginal product of labor divided by the wage rate.
D)   All of the above are correct.E) A) and C)
F) All of the above

Question 13

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

Question 14

Scenario 18-5
Rocchetta Industries manufactures and supplies bottled water in Mexico.As a result of a contamination of water supplies at many of Mexico's resort communities,the demand for bottled water has increased.
-Refer to Scenario 18-5.When the labor market adjusts to its new equilibrium,we would expect the

Accepted Answer

A)   marginal product of labor to be higher than it was before the increase in demand for bottled water.
B)   value of the marginal product of labor to be higher than it was before the increase in demand for bottled water.
C)   price of bottled water to be lower than it was before the increase in demand for bottled water.
D)   wages of Rocchetta workers to be lower than they were before the increase in demand for bottled water.E) All of the above
F) B) and D)

Question 15

Consider the market for capital equipment.Suppose the price of firms' output increases.Holding all else constant,what will happen to the equilibrium rental price of capital equipment?

Accepted Answer

A)   The equilibrium rental price of capital equipment increases.
B)   The equilibrium rental price of capital equipment decreases.
C)   The equilibrium rental price of capital equipment does not change.
D)   It is not possible to determine what will happen to the equilibrium rental price of capital equipment.E) All of the above
F) None of the above

Question 16

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,what effect does this have on the equilibrium wage of health care employees?

Accepted Answer

A)   The equilibrium wage increases.
B)   The equilibrium wage decreases.
C)   The equilibrium wage does not change.
D)   It is not possible to determine what happens to the equilibrium wage.E) A) and D)
F) A) and C)

Question 17

Most of the total income earned in the U.S.economy is ultimately paid to

Accepted Answer

A)   households in the form of wages and fringe benefits.
B)   landowners in the form of rent.
C)   landowners in the form of interest.
D)   landowners in the form of profit.E) A) and B)
F) All of the above

Question 18

Suppose that a rare virus infects and kills a significant percentage of the population.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and the rents earned by landowners?

Accepted Answer

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

Question 19

In 2008,the total income of all U.S.residents was approximately $120 billion.

Accepted Answer

A) True 
 B)False

Question 20

Suppose that a college physics experiment goes horribly wrong and releases an electronic pulse that renders all electronic equipment in the city of San Francisco,California permanently useless.No people are hurt,and no buildings are damaged.Which of the following statements correctly describes the wages earned by California workers after the accident?

Accepted Answer

A)   The marginal productivities of workers will increase and wages will increase.
B)   The marginal productivities of workers will decrease and wages will decrease.
C)   The marginal productivities of workers will increase and wages will decrease.
D)   The marginal productivities of workers will decrease and wages will increase.E) B) and C)
F) A) and C)

Exam 18: The Markets for the Factors of Production

If the demand curve for computer games shifts to the left,then the value of the marginal product of labor for computer game authors will

Correct Answer
verified

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

Correct Answer
verified

Suppose that a rare virus infects and kills a significant percentage of the population.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and the rents earned by landowners?

Correct Answer
verified

Correct Answer
verified

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,what effect does this have on the equilibrium wage of health care employees?

Correct Answer
verified

Table 18-1 -Refer to Table 18-1.Which firm's production function exhibits diminishing marginal product?

Correct Answer
verified

The value of the marginal product of labor

Correct Answer
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Since workers in the U.S.economy receive most of the total income earned,which of the following factors of production is considered to be the most important?

Correct Answer
verified

If the price of airline tickets falls,what will happen to the demand curve for flight attendants?

Correct Answer
verified

Which of the following correctly describes a representative labor market?

Correct Answer
verified

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,what effect does this have on the equilibrium quantity of health care employees?

Correct Answer
verified

Correct Answer
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Which of the following accurately describes how earnings from capital eventually get paid to households?

Correct Answer
verified

In 2008,the total income of all U.S.residents was approximately $120 billion.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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,what effect did this process have on the equilibrium wage in the labor market for computer programmers?

Correct Answer
verified

Consider the market for capital equipment.Suppose the price of firms' output increases.Holding all else constant,what will happen to the equilibrium rental price of capital equipment?

Correct Answer
verified

The owners of capital resources are compensated according to the

Correct Answer
verified

Most of the total income earned in the U.S.economy is ultimately paid to

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

If the demand curve for computer games shifts to the left,then the value of the marginal product of labor for computer game authors will

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose that a rare virus infects and kills a significant percentage of the population.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and the rents earned by landowners?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,what effect does this have on the equilibrium wage of health care employees?

Correct AnswerverifiedShow Answer

Table 18-1 -Refer to Table 18-1.Which firm's production function exhibits diminishing marginal product?

Correct AnswerverifiedShow Answer

The value of the marginal product of labor

Correct AnswerverifiedShow Answer

Since workers in the U.S.economy receive most of the total income earned,which of the following factors of production is considered to be the most important?

Correct AnswerverifiedShow Answer

If the price of airline tickets falls,what will happen to the demand curve for flight attendants?

Correct AnswerverifiedShow Answer

Which of the following correctly describes a representative labor market?

Correct AnswerverifiedShow Answer

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,what effect does this have on the equilibrium quantity of health care employees?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following accurately describes how earnings from capital eventually get paid to households?

Correct AnswerverifiedShow Answer

In 2008,the total income of all U.S.residents was approximately $120 billion.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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,what effect did this process have on the equilibrium wage in the labor market for computer programmers?

Correct AnswerverifiedShow Answer

Consider the market for capital equipment.Suppose the price of firms' output increases.Holding all else constant,what will happen to the equilibrium rental price of capital equipment?

Correct AnswerverifiedShow Answer

The owners of capital resources are compensated according to the

Correct AnswerverifiedShow Answer

Most of the total income earned in the U.S.economy is ultimately paid to

Correct AnswerverifiedShow Answer

Correct Answer
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