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Exam 18: The Markets for the Factors of Production

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Question 41

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John owns a number of hot dog stands in New York City.He hires workers to sell hot dogs at his stands.Which of the following events will lead to a decrease in John's demand for hot dog vendors?

A) Hollywood glamorization of a new movie about a hot dog vendor leads hundreds of high-school students in New York City to apply for a job at John's.
B) The price of hot dogs falls.
C) The local hot dog vendors form a union increasing hot dog vendor wages.
D) The demand curve for hot dogs shifts to the right.

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

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Question 42

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Figure 18-4 This figure below shows the labor market for automobile workers.The curve labeled S is the labor supply curve,and the curves labeled D₁ and D₂ are the labor demand curves.On the horizontal axis,L represents the quantity of labor in the market. -Refer to Figure 18-4.What is measured along the vertical axis on the graph?

A) The quantity of automobiles produced
B) The price of automobiles
C) The wage paid to automobile workers
D) Time spent by workers producing automobiles

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

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Question 43

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Your best friend receives a pay raise at her part-time job from $8 to $10 per hour.She used to work 20 hours per week,but now she decides to work 16 hours per week in order to spend more time studying economics.For this price range,her labor supply curve is

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.Since it generally takes about five years to get a Ph.D.in economics,holding all else constant,what will likely happen to the equilibrium quantity of university economics professors in five years?

Table 18-5 -Refer to Table 18-5.It is apparent from this table that increasing marginal product

Scenario 18-1 Harry owns a snow-removal business.He hires workers to shovel driveways for him during the winter.The first worker he hires can shovel twelve driveways in one day.When Harry hires two workers,they can shovel a total of 22 driveways in one day.When Harry hires a third worker,he shovels an additional eight driveways in one day. -Refer to Scenario 18-1.Suppose that Harry pays each worker $80 per day and that he charges each customer $20 to have his driveway shoveled.What is the value of the marginal product of labor for the third worker?

If the output price of a product rises,the demand for capital will increase,raising the rental price of capital.

Suppose that technological progress increases the productivity of teachers.Which of the following accurately describes the labor market for teachers after the technological change?

Figure 18-7 -Refer to Figure 18-7.If the relevant labor supply curve is S₂ and the current wage is W₁,

The marginal product of any factor of production depends on

From 1960 to 2000,inflation-adjusted wages increased by 131 percent in the U.S.As a result,firms reduced the amount of labor they employed by nearly 20 percent.

A worker's contribution to a firm's revenue is measured directly by the worker's

A competitive firm sells its output for $25 per unit.The marginal product of the 10th worker is 10 units of output per day;the marginal product of the 11th worker is 8 units of output per day.The firm pays its workers a wage of $160 per day.

We observe a profit-maximizing firm hiring its 51st employee.It is possible to infer that,when 50 employees are hired,the

Which of the following qualify as part of our economy's capital income?

Figure 18-5 -Refer to Figure 18-5.If the price of apples increases,the

Figure 18-3 The figure below shows the production function for a particular firm. -Refer to Figure 18-3.Suppose the firm pays a wage equal to $160 per unit of labor and sells its output at $10 per unit.How many units of labor should the firm hire to maximize profit?

Table 18-6 -Refer to Table 18-6.How many workers should the firm hire?

Table 18-2 The following table shows the production function for a particular business.The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis. -Refer to Table 18-2.Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day.What is the value of the marginal product of labor for the second worker?

The labor supply curve reflects how workers' decisions about the labor-leisure tradeoff respond to changes in the opportunity cost of leisure.