Question 1

Figure 18-5
The figure shows a particular profit-maximizing, competitive firm's value-of-marginal-product (VMP)  curve. On the horizontal axis, L represents the number of workers. The time frame is daily. 
-Refer to Figure 18-5. The value-of-marginal-product curve that is drawn could be relabeled as the firm's

Accepted Answer

A)  production function.
B)  total revenue curve.
C)  labor supply curve.
D)  labor demand curve.E) All of the above
F) A) and B)

Question 2

The equilibrium rental income paid to the owners of capital at any point in time equals the

Accepted Answer

A)  marginal product of capital.
B)  value of the marginal product of capital.
C)  percentage of profits paid out to stockholders in the form of dividends.
D)  equilibrium purchase price of capital.E) B) and C)
F) All of the above

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Table 18-7 
-Refer to Table 18-7. To maximize its profit, the firm will hire workers as long as the value of the marginal product of labor equals or exceeds

Accepted Answer

A)  $100.
B)  $200.
C)  $400.
D)  $500.E) B) and C)
F) B) and D)

Question 5

Labor-augmenting technological advances decrease the marginal productivity of labor.

Accepted Answer

A) True 
 B)False

Question 6

Table 18-B
Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. 
-Refer to Table 18-11. What is the fifth worker's marginal product of labor?

Accepted Answer

A)  120 cupcakes
B)  140 cupcakes
C)  160 cupcakes
D)  180 cupcakesE) B) and C)
F) A) and D)

Question 7

When a firm hires labor up to the point where the wage is equal to the value of the marginal product of labor, it is

Accepted Answer

A)  minimizing labor costs.
B)  guaranteeing that labor costs do not exceed fixed costs.
C)  maximizing the number of workers it can hire and still experience a positive profit.
D)  maximizing profit.E) B) and C)
F) A) and C)

Question 8

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 $25 per unit, and it pays each of its workers $1,000 per week. Also, the firm's non-labor costs are fixed and they amount to $2,000. The firm maximizes profit by hiring

Accepted Answer

A)  2 workers.
B)  3 workers.
C)  4 workers.
D)  5 workers.E) A) and B)
F) A) and C)

Question 9

What are the typical effects on the labor market of technological progress?

Accepted Answer

Technological progress typical...

Question 10

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. What is the marginal productivity of the second worker?

Accepted Answer

A)  7
B)  10
C)  12
D)  22E) A) and D)
F) A) and C)

Question 11

Figure 18-4
The graph below illustrates the market for nurses who work in doctors' offices. 
-Refer to Figure 18-4. Each August many students entering college for the first time visit a doctor's office to have an MMR booster vaccine. If a new labor-saving technology exists that allows robots to administer the vaccine quickly and accurately, what happens in the market for nurses?

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 D)

Question 12

A decrease in population can be expected to

Accepted Answer

A)  increase the marginal product of land.
B)  decrease the supply of land.
C)  decrease the rents on land.
D)  increase the demand for land.E) B) and D)
F) None of the above

Question 13

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium wage for doctors will

Accepted Answer

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

Question 14

When a labor market experiences a surplus of labor, there is downward pressure on

Accepted Answer

A)  the supply of labor.
B)  the final product price.
C)  wages.
D)  the demand for labor.E) All of the above
F) A) and C)

Question 15

A competitive firm sells its output for $60 per unit. Assume that labor is the only input that varies for the firm. The marginal product of the 10th worker is 20 units of output per day; the marginal product of the 11th worker is 16 units of output per day. The firm pays its workers a wage of $150 per day. For the 11th worker, the value of the marginal product of labor is

Accepted Answer

A)  $480.
B)  $960.
C)  $1,200.
D)  $2,400.E) C) and D)
F) B) and C)

Question 16

Immigration of workers into the United States is often an important source of

Accepted Answer

A)  increases in the demand for labor in the United States.
B)  decreases in the demand for labor in the United States.
C)  increases in the supply of labor in the United States.
D)  decreases in the supply of labor in the United States.E) A) and B)
F) A) and C)

Question 17

To say that a firm is competitive in the labor market is to say that the firm can choose

Accepted Answer

A)  both the wage it pays its workers and the number of workers it hires.
B)  neither the wage it pays its workers nor the number of workers it hires.
C)  the wage it pays its workers, but it cannot choose how many workers to hire.
D)  the number of workers it hires, but it cannot choose the wage it pays its workers.E) All of the above
F) None of the above

Question 18

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 C)
F) B) and C)

Question 19

Table 18-7 
-Refer to Table 18-7. What is the market price of the final good?

Accepted Answer

A)  $5
B)  $6
C)  $8
D)  $10E) A) and B)
F) B) and C)

Question 20

Figure 18-8
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. 1 and D2 are the labor demand curves. On the horizontal axis, L represents the quantity of labor in the market.   -Refer to Figure 18-8. Which of the following is a possible explanation of the shift of the labor-demand curve from D1 to D2? A) The wage earned by automobile workers increased. B) The price of automobiles increased. C) The opportunity cost of leisure, as perceived by automobile workers, decreased. D) Large segments of the population changed their tastes regarding leisure versus work." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-8. Which of the following is a possible explanation of the shift of the labor-demand curve from D1 to D2?

Accepted Answer

A)  The wage earned by automobile workers increased.
B)  The price of automobiles increased.
C)  The opportunity cost of leisure, as perceived by automobile workers, decreased.
D)  Large segments of the population changed their tastes regarding leisure versus work.E) B) and C)
F) None of the above

Exam 18: The Markets for the Factors of Production

Immigration of workers into the United States is often an important source of

Correct Answer
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What are the typical effects on the labor market of technological progress?

Correct Answer
verified
Technological progress typical...
View Answer

Correct Answer
verified

The equilibrium rental income paid to the owners of capital at any point in time equals the

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

When a labor market experiences a surplus of labor, there is downward pressure on

Correct Answer
verified

Labor-augmenting technological advances decrease the marginal productivity of labor.

Correct Answer
verified

Correct Answer
verified

To say that a firm is competitive in the labor market is to say that the firm can choose

Correct Answer
verified

Correct Answer
verified

When a firm hires labor up to the point where the wage is equal to the value of the marginal product of labor, it is

Correct Answer
verified

A decrease in population can be expected to

Correct Answer
verified

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium wage for doctors will

Correct Answer
verified

Correct Answer
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Table 18-7 -Refer to Table 18-7. What is the market price of the final good?

Correct Answer
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Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the fifth worker's marginal product of labor?

Correct Answer
verified

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

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

Table 18-7 -Refer to Table 18-7. To maximize its profit, the firm will hire workers as long as the value of the marginal product of labor equals or exceeds

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Immigration of workers into the United States is often an important source of

Correct AnswerverifiedShow Answer

What are the typical effects on the labor market of technological progress?

Correct AnswerverifiedTechnological progress typical...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The equilibrium rental income paid to the owners of capital at any point in time equals the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a labor market experiences a surplus of labor, there is downward pressure on

Correct AnswerverifiedShow Answer

Labor-augmenting technological advances decrease the marginal productivity of labor.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

To say that a firm is competitive in the labor market is to say that the firm can choose

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a firm hires labor up to the point where the wage is equal to the value of the marginal product of labor, it is

Correct AnswerverifiedShow Answer

A decrease in population can be expected to

Correct AnswerverifiedShow Answer

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium wage for doctors will

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. What is the market price of the final good?

Correct AnswerverifiedShow Answer

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the fifth worker's marginal product of labor?

Correct AnswerverifiedShow Answer

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

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

Table 18-7 -Refer to Table 18-7. To maximize its profit, the firm will hire workers as long as the value of the marginal product of labor equals or exceeds

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Technological progress typical...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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