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, 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) B) and D)
F) A) and B)

Question 2

Suppose that Chloe opens a dog grooming business in a local shopping center. Which of the following would be an example of a factor of production used by Chloe?

Accepted Answer

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

Question 3

Table 18-1 
-Refer to Table 18-1. What is the marginal product of the second worker?

Accepted Answer

A)   8
B)   9
C)   10
D)   18E) A) and B)
F) B) and C)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Which of the following would increase the demand for labor?

Accepted Answer

A)   (i)  only
B)   (i)  and (iii)  only
C)   (ii)  only
D)   (ii)  and (iv)  onlyE) B) and D)
F) B) and C)

Question 6

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 $12 per unit, and it pays each of its workers $700 per week. The value of the marginal product of the fifth worker is

Accepted Answer

A)   $540
B)   $700
C)   $720
D)   $1,080E) A) and C)
F) All of the above

Question 7

Table 18-3 
-Refer to Table 18-3. For Firm A, the marginal product of labor is

Accepted Answer

A)   increasing.
B)   constant.
C)   decreasing.
D)   negative.E) All of the above
F) A) and D)

Question 8

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. Assuming MadeFromScratch is a competitive, profit-maximizing firm, how many workers will the firm hire?

Accepted Answer

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

Question 9

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

Question 10

Sunshine's Organic Market sells organic produce. Assume that labor is the only input that varies for the firm. The store manager has determined that if she hires 9 workers, the store can sell 200 pounds of produce per day. If she hires 10 workers, the store can sell 230 pounds of produce per day. The store earns $4 for each pound of produce that it sells, and the manager pays each worker $60 per day. Which of the following is correct?

Accepted Answer

A)   For the 10th worker, the marginal product is 20 pounds of produce per day.
B)   For the 10th worker, the marginal revenue product is $120 per day.
C)   The marginal profit from the 10th worker is $120.
D)   All of the above are correct.E) A) and D)
F) All of the above

Question 11

An upward-sloping labor supply curve means that

Accepted Answer

A)   workers prefer to buy more leisure time when their incomes increase.
B)   workers prefer to supply less labor when wages are high.
C)   an increase in the opportunity cost of leisure leads workers to increase the quantity of labor they supply.
D)   All of the above are correct.E) A) and C)
F) All of the above

Question 12

If a worker respond to an increase in the opportunity cost of leisure by taking more leisure, then her labor supply curve is

Accepted Answer

A)   upward sloping.
B)   backward sloping.
C)   horizontal.
D)   vertical.E) All of the above
F) A) and D)

Question 13

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

Accepted Answer

A)   rise, and the equilibrium quantity of teachers employed will fall.
B)   rise, and the equilibrium quantity of teachers employed will rise.
C)   fall, and the equilibrium quantity of teachers employed will fall.
D)   fall, and the equilibrium quantity of teachers employed will rise.E) C) and D)
F) A) and B)

Question 14

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 labor market for computer programmers? The equilibrium wage

Accepted Answer

A)   increased, and the equilibrium quantity of labor increased.
B)   increased, and the equilibrium quantity of labor decreased.
C)   decreased, and the equilibrium quantity of labor increased.
D)   decreased, and the equilibrium quantity of labor decreased.E) All of the above
F) A) and D)

Question 15

When firms are able to increase the amount of physical capital available to workers, the

Accepted Answer

A)   marginal product of labor will decrease.
B)   value of the marginal product of labor will decrease.
C)   value of the marginal product of labor will increase.
D)   final product price will increase.E) A) and B)
F) A) and C)

Question 16

Among the people who are characterized below, who has the highest opportunity cost of leisure?

Accepted Answer

A)   a veterinarian who earns $25 per hour and who goes surfing during her leisure time
B)   a professional tennis player who earns $50 per hour giving tennis lessons and who watches TV during his leisure time
C)   a retail clerk who earns $15 per hour and who plays computer games during his leisure time
D)   a CPA who earns $150 per hour and who golfs during her leisure timeE) B) and C)
F) None of the above

Question 17

Suppose that the market for labor is initially in equilibrium. If the firm employs labor-saving technology, 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) B) and D)
F) C) and D)

Question 18

If Ernie's individual labor supply curve is upward sloping, then Ernie responds to an increase in the

Accepted Answer

A)   wage by working more hours per week.
B)   opportunity cost of leisure by working fewer hours per week.
C)   opportunity cost of leisure by taking more hours of leisure per week.
D)   Both a and b are correct.E) B) and C)
F) A) and C)

Question 19

Suppose the wage earned by pear pickers suddenly rises. Which of the following effects would we most likely observe as a result?

Accepted Answer

A)   The supply of apple pickers would decrease and the equilibrium wage of apple pickers would decrease.
B)   The supply of apple pickers would decrease and the equilibrium wage of apple pickers would increase.
C)   The demand for apple pickers would increase and the equilibrium wage of apple pickers would decrease.
D)   The demand for apple pickers would decrease and the equilibrium wage of apple pickers would decrease.E) A) and C)
F) None of the above

Question 20

Competitive firms decide how much output to sell by producing output until the price of the good equals

Accepted Answer

A)   marginal product.
B)   the value of marginal product.
C)   marginal cost.
D)   marginal profit.E) None of the above
F) B) and D)

Exam 18: The Markets for the Factors of Production

Suppose that the market for labor is initially in equilibrium. If the firm employs labor-saving technology, the equilibrium wage

Correct Answer
verified

If Ernie's individual labor supply curve is upward sloping, then Ernie responds to an increase in the

Correct Answer
verified

Competitive firms decide how much output to sell by producing output until the price of the good equals

Correct Answer
verified

If a worker respond to an increase in the opportunity cost of leisure by taking more leisure, then her labor supply curve is

Correct Answer
verified

Table 18-3 -Refer to Table 18-3. For Firm A, the marginal product of labor is

Correct Answer
verified

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. Assuming MadeFromScratch is a competitive, profit-maximizing firm, how many workers will the firm hire?

Correct Answer
verified

When firms are able to increase the amount of physical capital available to workers, the

Correct Answer
verified

Table 18-1 -Refer to Table 18-1. What is the marginal product of the second worker?

Correct Answer
verified

Among the people who are characterized below, who has the highest opportunity cost of leisure?

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

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

Which of the following would increase the demand for labor?

Correct Answer
verified

An upward-sloping labor supply curve means that

Correct Answer
verified

Suppose the wage earned by pear pickers suddenly rises. Which of the following effects would we most likely observe as a result?

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 labor market for computer programmers? The equilibrium wage

Correct Answer
verified

Suppose that Chloe opens a dog grooming business in a local shopping center. Which of the following would be an example of a factor of production used by Chloe?

Correct Answer
verified

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

Correct Answer
verified

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 $12 per unit, and it pays each of its workers $700 per week. The value of the marginal product of the fifth worker is

Correct Answer
verified

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

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Suppose that the market for labor is initially in equilibrium. If the firm employs labor-saving technology, the equilibrium wage

Correct AnswerverifiedShow Answer

If Ernie's individual labor supply curve is upward sloping, then Ernie responds to an increase in the

Correct AnswerverifiedShow Answer

Competitive firms decide how much output to sell by producing output until the price of the good equals

Correct AnswerverifiedShow Answer

If a worker respond to an increase in the opportunity cost of leisure by taking more leisure, then her labor supply curve is

Correct AnswerverifiedShow Answer

Table 18-3 -Refer to Table 18-3. For Firm A, the marginal product of labor is

Correct AnswerverifiedShow Answer

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. Assuming MadeFromScratch is a competitive, profit-maximizing firm, how many workers will the firm hire?

Correct AnswerverifiedShow Answer

When firms are able to increase the amount of physical capital available to workers, the

Correct AnswerverifiedShow Answer

Table 18-1 -Refer to Table 18-1. What is the marginal product of the second worker?

Correct AnswerverifiedShow Answer

Among the people who are characterized below, who has the highest opportunity cost of leisure?

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

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

Which of the following would increase the demand for labor?

Correct AnswerverifiedShow Answer

An upward-sloping labor supply curve means that

Correct AnswerverifiedShow Answer

Suppose the wage earned by pear pickers suddenly rises. Which of the following effects would we most likely observe as a result?

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 labor market for computer programmers? The equilibrium wage

Correct AnswerverifiedShow Answer

Suppose that Chloe opens a dog grooming business in a local shopping center. Which of the following would be an example of a factor of production used by Chloe?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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 $12 per unit, and it pays each of its workers $700 per week. The value of the marginal product of the fifth worker is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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