Question 1

Which term below refers to "the accumulation of goods produced in the past that are being used in the present to produce new goods and services"?

Accepted Answer

A)   inventories
B)   products
C)   factors of production
D)   capitalE) All of the above
F) A) and B)

Question 2

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) B) and C)
F) None of the above

Question 3

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

Accepted Answer

A)   increase,and more apple pickers will be hired.
B)   decrease,and more apple pickers will be hired.
C)   increase,and fewer apple pickers will be hired.
D)   decrease,and fewer apple pickers will be hired.E) All of the above
F) C) and D)

Question 4

Suppose that a competitive firm hires labor up to the point at which the value of the marginal product equals the wage and that labor is the only input that varies for the firm.If the firm pays a wage of $700 per week and the marginal product of labor equals 20 units per week,then the marginal cost of producing an additional unit of output is

Accepted Answer

A)   $35.
B)   $70.
C)   $700.
D)   We do not have enough information to answer this question.E) B) and C)
F) None of the above

Question 5

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 quantity of university economics professors will

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   It is not possible to determine what will happen to the equilibrium quantity.E) A) and B)
F) B) and C)

Question 6

Typically,as a firm hires additional workers,the marginal product of labor

Accepted Answer

A)   decreases,and the value of the marginal product of labor decreases.
B)   stays constant,and the value of the marginal product of labor decreases.
C)   decreases,and the value of the marginal product of labor stays constant.
D)   decreases,and the value of the marginal product of labor increases.E) B) and C)
F) A) and B)

Question 7

The marginal product of labor is

Accepted Answer

A)   the increase in the amount of output from an additional unit of labor.
B)   the total amount of output divided by the total units of labor.
C)   total revenue minus total cost.
D)   also called the marginal profit.E) C) and D)
F) A) and B)

Question 8

Dan owns one of the many bakeries in New York City.Which of the following events will lead to an increase in Dan's demand for the services of bakers? (i) 
The price of muffins increases.(Muffins are Dan's specialty. ) 
(ii) 
Dan adds three new ovens to the kitchen area to help the bakers work faster.
(iii) 
Local bakers form a union to protect themselves from low wages.

Accepted Answer

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

Question 9

Economists refer to the inputs that firms use to produce goods and services as

Accepted Answer

A)   derived factors.
B)   derived resources.
C)   factors of production.
D)   instruments of revenue.E) C) and D)
F) None of the above

Question 10

For a profit-maximizing,competitive firm,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) B) and C)
F) C) and D) B

Question 11

Of the total income earned in the U.S.economy,approximately

Accepted Answer

A)   25 percent is earned by workers,and 75 percent is earned by landowners.
B)   50 percent is earned by workers,25 percent is earned by landowners,and 25 percent is earned by owners of capital.
C)   75 percent is earned by workers,and 25 percent is earned by owners of land and capital.
D)   90 percent is earned by workers,and 10 percent is earned by owners of land and capital.E) A) and D)
F) A) and C)

Question 12

Table 18-4
 
-Refer to Table 18-4.The price of output is

Accepted Answer

A)   $1.
B)   $2.
C)   $3.
D)   $400.E) None of the above
F) A) and B)

Question 13

A highly-paid research scientist works 12 hours a day,while a common laborer works only 5 hours a day.Offer a likely explanation,using the concept of opportunity cost.

Accepted Answer

The wage (opportunity cost of ...

Question 14

Figure 18-4 
-Refer to Figure 18-4.The graph above illustrates the market for bakers who make homemade breads and breakfast pastries.If bakeries adopt new labor-augmenting technologies,what happens in the market for bakers?

Accepted Answer

A)   Demand increases from D1 to D2.
B)   Demand decreases from D2 to D1.
C)   Supply increases from S1 to S2.
D)   Supply decreases from S2 to S1.E) None of the above
F) A) and B)

Question 15

The marginal product of any factor of production depends on

Accepted Answer

A)   the quantity of the factor used.
B)   the price of the final good.
C)   the demand for the final good.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 16

When a competitive firm maximizes profit,it will hire workers up to the point where the

Accepted Answer

A)   marginal product of labor is equal to the product price.
B)   marginal product of labor is equal to the wage.
C)   value of the marginal product of labor is equal to the product price.
D)   value of the marginal product of labor is equal to the wage.E) A) and D)
F) C) and D) D

Question 17

Suppose that the labor market for life guards is initially in equilibrium.Whistles are an important safety tool that life guards use as a part of their jobs.A fire destroys the largest factory that produces whistles.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) All of the above
F) None of the above

Question 18

Omega Custom Cabinets produces and sells custom bathroom vanities.The firm has determined that if it hires 10 workers,it can produce 20 vanities per week.If it hires 11 workers,it can produce 22 vanities per week.It sells each vanity for $800,and it pays each of its workers $1,000 per week.Which of the following is correct?

Accepted Answer

A)   For the 11th worker,the marginal profit is $600.
B)   For the 11th worker,the marginal revenue product is $2,000.
C)   The firm is maximizing its profit.
D)   If the firm is employing 11 workers,then its profit would increase if it cut back to 10 workers.E) None of the above
F) B) and C)

Question 19

Which of the following events would shift the labor supply curve?

Accepted Answer

A)   changes in the number of women willing to work
B)   immigration of workers
C)   changing attitudes towards work
D)   All of the above are correct.E) A) and C)
F) B) and D) D

Question 20

For a snow-removal business,the capital stock would include inputs such as snow blowers and shovels.

Accepted Answer

A) True 
 B)False

Exam 18: The Market for the Factors of Production

Which term below refers to "the accumulation of goods produced in the past that are being used in the present to produce new goods and services"?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Typically,as a firm hires additional workers,the marginal product of labor

Correct Answer
verified

The marginal product of labor is

Correct Answer
verified

Correct Answer
verified

Economists refer to the inputs that firms use to produce goods and services as

Correct Answer
verified

For a profit-maximizing,competitive firm,the value of the marginal product of labor

Correct Answer
verified
B

Of the total income earned in the U.S.economy,approximately

Correct Answer
verified

Table 18-4 -Refer to Table 18-4.The price of output is

Correct Answer
verified

A highly-paid research scientist works 12 hours a day,while a common laborer works only 5 hours a day.Offer a likely explanation,using the concept of opportunity cost.

Correct Answer
verified
The wage (opportunity cost of ...
View Answer

Figure 18-4 -Refer to Figure 18-4.The graph above illustrates the market for bakers who make homemade breads and breakfast pastries.If bakeries adopt new labor-augmenting technologies,what happens in the market for bakers?

Correct Answer
verified

The marginal product of any factor of production depends on

Correct Answer
verified

When a competitive firm maximizes profit,it will hire workers up to the point where the

Correct Answer
verified
D

Suppose that the labor market for life guards is initially in equilibrium.Whistles are an important safety tool that life guards use as a part of their jobs.A fire destroys the largest factory that produces whistles.What happens to the equilibrium wage and quantity of life guards?

Correct Answer
verified

Correct Answer
verified

Which of the following events would shift the labor supply curve?

Correct Answer
verified
D

For a snow-removal business,the capital stock would include inputs such as snow blowers and shovels.

Correct Answer
verified

Exam 18: The Market for the Factors of Production

Which term below refers to "the accumulation of goods produced in the past that are being used in the present to produce new goods and services"?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Typically,as a firm hires additional workers,the marginal product of labor

Correct AnswerverifiedShow Answer

The marginal product of labor is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economists refer to the inputs that firms use to produce goods and services as

Correct AnswerverifiedShow Answer

For a profit-maximizing,competitive firm,the value of the marginal product of labor

Correct AnswerverifiedB

Of the total income earned in the U.S.economy,approximately

Correct AnswerverifiedShow Answer

Table 18-4 -Refer to Table 18-4.The price of output is

Correct AnswerverifiedShow Answer

A highly-paid research scientist works 12 hours a day,while a common laborer works only 5 hours a day.Offer a likely explanation,using the concept of opportunity cost.

Correct AnswerverifiedThe wage (opportunity cost of ...View AnswerShow Answer

Figure 18-4 -Refer to Figure 18-4.The graph above illustrates the market for bakers who make homemade breads and breakfast pastries.If bakeries adopt new labor-augmenting technologies,what happens in the market for bakers?

Correct AnswerverifiedShow Answer

The marginal product of any factor of production depends on

Correct AnswerverifiedShow Answer

When a competitive firm maximizes profit,it will hire workers up to the point where the

Correct AnswerverifiedD

Suppose that the labor market for life guards is initially in equilibrium.Whistles are an important safety tool that life guards use as a part of their jobs.A fire destroys the largest factory that produces whistles.What happens to the equilibrium wage and quantity of life guards?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following events would shift the labor supply curve?

Correct AnswerverifiedD

For a snow-removal business,the capital stock would include inputs such as snow blowers and shovels.

Correct AnswerverifiedShow 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

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The wage (opportunity cost of ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified