Question 1

What causes the labor demand curve to shift? (i)  changes in productivity
(ii)  changes in wages
(iii)  changes in output prices

Accepted Answer

A)   (i)  and (ii) 
B)   (ii)  and (iii) 
C)   (i)  and (iii) 
D)   All of the above are correct.E) A) and D)
F) B) and D)

Question 2

A competitive firm sells its output for $50 per unit. Assume that labor is the only input that varies for the firm. 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. For the 10th worker, the value of the marginal product of labor is

Accepted Answer

A)   $250.
B)   $400.
C)   $500.
D)   $1,280.E) None of the above
F) B) and C)

Question 3

Table 18-9
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 18-9. 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 third worker?

Accepted Answer

A)   $90
B)   $250
C)   $300
D)   $800E) C) and D)
F) A) and B)

Question 4

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. Based on the shape of the curve, the (i)  total product is increasing.
(ii)  total product is decreasing.
(iii)  marginal product is increasing.
(iv)  marginal product is decreasing.

Accepted Answer

A)   (i)  only
B)   (i)  and (iii)  only
C)   (i)  and (iv)  only
D)   (ii)  and (iv)  onlyE) None of the above
F) A) and D)

Question 5

Suppose that due to a severe drought in Texas, 100,000 farmers relocate from Texas to Louisiana. 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 in Louisiana?

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 B)
F) A) and C)

Question 6

If a particular labor market were to convert from a competitive market to a monopsony, what effect would we expect on the number of workers hired? What effect would we expect on the wage paid to workers?

Accepted Answer

We would expect the number of ...

Question 7

Figure 18-7 
-Refer to Figure 18-7. Which of the following would shift the labor supply curve from S1 to S2?

Accepted Answer

A)   technological progress
B)   a decrease in the price of the firm's output
C)   a change in workers' attitudes toward the work-leisure tradeoff
D)   an increase in the price of the firm's outputE) B) and C)
F) All of the above

Question 8

As the number of concrete workers in the United States falls, the wage paid to the remaining concrete workers will necessarily fall as well.

Accepted Answer

A) True 
 B)False

Question 9

Table 18-11
Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $2 each and pays the workers a wage of $325 per day.
 
-Refer to Table 18-11. Assume that MadeFromScratch is a competitive, profit-maximizing firm. If the market price of cupcakes increases from $2.00 to $2.50, how many workers would the firm then hire?

Accepted Answer

A)   2 workers
B)   3 workers
C)   4 workers
D)   5 workersE) A) and C)
F) None of the above

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Scenario 18-5
Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada.
-Refer to Scenario 18-5. In the labor market in the northern United States, 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) A) and B)
F) A) and C)

Question 12

Describe the difference between the purchase price of capital and the rental price of capital. If you know the value of marginal product from the flow of capital services, how would you determine the market price for the capital stock?

Accepted Answer

The purchase price of capital is a refle...

Question 13

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 quantity in the labor market for computer programmers

Accepted Answer

A)   increased.
B)   decreased.
C)   did not change.
D)   It is not possible to determine the equilibrium quantity.E) None of the above
F) All of the above

Question 14

Scenario 18-3
Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $13 per hour. During the summer, he drives a tour bus around the ski resort, earning $11 per hour.
-Refer to Scenario 18-3. During the summer months, what is Sam's opportunity cost of taking an hour off work to go hiking?

Accepted Answer

A)   $13
B)   between $11 and $12
C)   $11
D)   less than $11E) B) and D)
F) None of the above

Question 15

Over time, there have been technological advances in the production of radios. At the same time, it has become less popular to listen to radio. Taking these two events into account, what would be the likely effect on the wages of workers who manufacture radios?

Accepted Answer

The technological advances have the effe...

Question 16

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 sells its output for $10 per unit, and it pays each of its workers $400 per week. When the number of workers increases from 4 to 5, the

Accepted Answer

A)   marginal revenue is $450 per unit of output, and the marginal cost is $400 per unit of output.
B)   value of the marginal product of labor is $3,900, and the marginal cost per unit of output is $400.
C)   value of the marginal product of labor is $450, and the marginal cost per unit of output is about $8.89.
D)   firm's profit increases.E) A) and B)
F) B) and C)

Question 17

An increase in immigration will lower the equilibrium wage, all else held constant.

Accepted Answer

A) True 
 B)False

Question 18

For a worker, the opportunity cost of an hour of leisure

Accepted Answer

A)   rises by $8 when his wage rises by $8 per hour.
B)   falls by $8 when his wage rises by $8 per hour.
C)   is the same for a celebrity talk-show host as it is for a teacher.
D)   is determined by factors that are unrelated to his hourly wage.E) A) and B)
F) A) and C)

Question 19

Restaurants' demand for cooks and waiters is inseparably linked to the supply of .

Accepted Answer

The answer of Restaurants' demand for cooks and waiters is...

Question 20

Suppose that the labor market for life guards is initially in equilibrium. Then swimming pool owners adopt a new labor-saving technology that uses computers to monitor the locations of swimmers in the pool. What happens to the equilibrium wage and quantity of life guards?

Accepted Answer

A)   Both the equilibrium wage and quantity increase.
B)   Both the equilibrium wage and quantity decrease.
C)   The equilibrium wage increases, and the equilibrium quantity decreases.
D)   The equilibrium wage decreases, and the equilibrium quantity increases.E) A) and B)
F) None of the above

Exam 18: The Markets for the Factors of Production

If a particular labor market were to convert from a competitive market to a monopsony, what effect would we expect on the number of workers hired? What effect would we expect on the wage paid to workers?

Correct Answer
verified
We would expect the number of ...
View Answer

Correct Answer
verified

Describe the difference between the purchase price of capital and the rental price of capital. If you know the value of marginal product from the flow of capital services, how would you determine the market price for the capital stock?

Correct Answer
verified
The purchase price of capital is a refle...
View Answer

Correct Answer
verified

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

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, the equilibrium quantity in the labor market for computer programmers

Correct Answer
verified

What causes the labor demand curve to shift? (i) changes in productivity (ii) changes in wages (iii) changes in output prices

Correct Answer
verified

Correct Answer
verified

Suppose that the labor market for life guards is initially in equilibrium. Then swimming pool owners adopt a new labor-saving technology that uses computers to monitor the locations of swimmers in the pool. What happens to the equilibrium wage and quantity of life guards?

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 sells its output for $10 per unit, and it pays each of its workers $400 per week. When the number of workers increases from 4 to 5, the

Correct Answer
verified

An increase in immigration will lower the equilibrium wage, all else held constant.

Correct Answer
verified

Over time, there have been technological advances in the production of radios. At the same time, it has become less popular to listen to radio. Taking these two events into account, what would be the likely effect on the wages of workers who manufacture radios?

Correct Answer
verified
The technological advances have the effe...
View Answer

Figure 18-7 -Refer to Figure 18-7. Which of the following would shift the labor supply curve from S1 to S2?

Correct Answer
verified

Suppose that due to a severe drought in Texas, 100,000 farmers relocate from Texas to Louisiana. 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 in Louisiana?

Correct Answer
verified

Restaurants' demand for cooks and waiters is inseparably linked to the supply of .

Correct Answer
verified

As the number of concrete workers in the United States falls, the wage paid to the remaining concrete workers will necessarily fall as well.

Correct Answer
verified

Scenario 18-5 Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada. -Refer to Scenario 18-5. In the labor market in the northern United States, the equilibrium wage

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

For a worker, the opportunity cost of an hour of leisure

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

If a particular labor market were to convert from a competitive market to a monopsony, what effect would we expect on the number of workers hired? What effect would we expect on the wage paid to workers?

Correct AnswerverifiedWe would expect the number of ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Describe the difference between the purchase price of capital and the rental price of capital. If you know the value of marginal product from the flow of capital services, how would you determine the market price for the capital stock?

Correct AnswerverifiedThe purchase price of capital is a refle...View AnswerShow Answer

Correct AnswerverifiedShow Answer

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

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, the equilibrium quantity in the labor market for computer programmers

Correct AnswerverifiedShow Answer

What causes the labor demand curve to shift? (i) changes in productivity (ii) changes in wages (iii) changes in output prices

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that the labor market for life guards is initially in equilibrium. Then swimming pool owners adopt a new labor-saving technology that uses computers to monitor the locations of swimmers in the pool. What happens to the equilibrium wage and quantity of life guards?

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 sells its output for $10 per unit, and it pays each of its workers $400 per week. When the number of workers increases from 4 to 5, the

Correct AnswerverifiedShow Answer

An increase in immigration will lower the equilibrium wage, all else held constant.

Correct AnswerverifiedShow Answer

Over time, there have been technological advances in the production of radios. At the same time, it has become less popular to listen to radio. Taking these two events into account, what would be the likely effect on the wages of workers who manufacture radios?

Correct AnswerverifiedThe technological advances have the effe...View AnswerShow Answer

Figure 18-7 -Refer to Figure 18-7. Which of the following would shift the labor supply curve from S1 to S2?

Correct AnswerverifiedShow Answer

Suppose that due to a severe drought in Texas, 100,000 farmers relocate from Texas to Louisiana. 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 in Louisiana?

Correct AnswerverifiedShow Answer

Restaurants' demand for cooks and waiters is inseparably linked to the supply of .

Correct AnswerverifiedShow Answer

As the number of concrete workers in the United States falls, the wage paid to the remaining concrete workers will necessarily fall as well.

Correct AnswerverifiedShow Answer

Scenario 18-5 Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada. -Refer to Scenario 18-5. In the labor market in the northern United States, the equilibrium wage

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For a worker, the opportunity cost of an hour of leisure

Correct AnswerverifiedShow Answer

Correct Answer
verified
We would expect the number of ...
View Answer

Correct Answer
verified

Correct Answer
verified
The purchase price of capital is a refle...
View Answer

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The technological advances have the effe...
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