Question 1

Table 18-9
 
-Refer to Table 18-9.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $5 in a competitive market and the firm pays each unit of labor a wage equal to $320 per day.How many units of labor should the firm hire to maximize profit?

Accepted Answer

A)   2 units
B)   3 units
C)   4 units
D)   5 unitsE) A) and C)
F) A) and D)

Question 2

Consider the market for capital equipment.Suppose the value of the marginal product of capital equipment increases.Holding all else constant,the equilibrium rental price of capital equipment will

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   It is not possible to determine what will happen to the equilibrium rental price of capital equipment.E) C) and D)
F) A) and B)

Question 3

Figure 18-7 2 and the current wage is W1, A)  there is a surplus of labor. B)  the quantity of labor demanded exceeds the quantity of labor supplied. C)  an increase in the minimum wage could restore equilibrium in the market. D)  firms will need to raise the wage to restore equilibrium." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-7.If the relevant labor supply curve is S2 and the current wage is W1,

Accepted Answer

A)   there is a surplus of labor.
B)   the quantity of labor demanded exceeds the quantity of labor supplied.
C)   an increase in the minimum wage could restore equilibrium in the market.
D)   firms will need to raise the wage to restore equilibrium.E) A) and C)
F) B) and D)

Question 4

The rental price of land is

Accepted Answer

A)   the price paid for ownership of the land.
B)   the price paid for the flow of services from land over a specified time period.
C)   always more than the purchase price.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Table 18-10
Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day.
 
-Refer to Table 18-10.What is the fifth worker's marginal product of labor?

Accepted Answer

A)   120 cookies
B)   140 cookies
C)   160 cookies
D)   180 cookiesE) B) and D)
F) None of the above

Question 7

Which of the following best describes the economy's stock of equipment and structures?

Accepted Answer

A)   capital
B)   aggregate demand
C)   long-term inventory
D)   aggregate stockE) A) and B)
F) None of the above

Question 8

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.Assume that two points on the firm's production function are (L = 2,Q = 180) and (L = 3,Q = 228) ,where L = number of workers and Q = quantity of output.The firm pays its workers $120 per day.The firm's non-labor costs are fixed,and they amount to $250 per day.We can conclude that

Accepted Answer

A)   the firm sells its output for $12 per unit.
B)   if the firm is currently employing 2 workers per day,then profit could be increased by $48 per day if a third worker is hired.
C)   the marginal cost per unit of output is $2.50 when output is increased from 180 units per day to 228 units per day.
D)   the firm's maximum profit occurs when it hires 3 workers per day.E) B) and C)
F) C) and D)

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is an example of a firm's derived demand?

Accepted Answer

A)   Workers with higher levels of education earn more,on average,than workers with lower levels of education.
B)   Factors that decrease the demand for labor will decrease the equilibrium wage.
C)   A tractor manufacturer's demand for assembly-line workers is inseparably linked to the supply of tractors.
D)   All of the above are correct.E) B) and C)
F) B) and D)

Question 11

Table 18-6
 
-Refer to Table 18-6.What is the value for the cell labeled FF?

Accepted Answer

A)   30
B)   40
C)   100
D)   400E) A) and B)
F) B) and C)

Question 12

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.In the market for life guards the equilibrium wage

Accepted Answer

A)   increases because the marginal productivity of life guards increases.
B)   decreases because the marginal productivity of life guards decreases.
C)   increases because the supply of life guards increases.
D)   decreases because the supply of life guards decreases.E) A) and B)
F) A) and C)

Question 13

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) C) and D)

Question 14

Figure 18-3 
-Refer to Figure 18-3.Suppose that the price of the output is $20.What is the value of the marginal product of the fourth worker?

Accepted Answer

A)   $1
B)   $20
C)   $280
D)   $300E) A) and D)
F) B) and D)

Question 15

Consider the labor market for short-order cooks.A labor-augmenting technological change such as a faster food processor will cause

Accepted Answer

A)   both equilibrium wages and equilibrium employment to increase.
B)   both equilibrium wages and equilibrium employment to decrease.
C)   equilibrium wages to increase and equilibrium employment to decrease.
D)   equilibrium wages to decrease and equilibrium employment to increase.E) C) and D)
F) A) and C)

Question 16

To maximize profit,a competitive firm hires workers up to the point of intersection of the

Accepted Answer

A)   marginal product curve and the wage line.
B)   value of marginal product curve and the wage line.
C)   value of marginal product curve and the marginal revenue curve.
D)   total revenue curve and the wage line.E) A) and B)
F) A) and C)

Question 17

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.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" class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-8.What is measured along the vertical axis on the graph?

Accepted Answer

A)   the quantity of automobiles produced
B)   the price of automobiles
C)   the wage paid to automobile workers
D)   time spent by workers producing automobilesE) C) and D)
F) B) and D)

Question 18

If one were to consider a university as a business,the computers in the computer labs would be regarded by economists as

Accepted Answer

A)   technology flows.
B)   mechanization flows.
C)   part of the university's stock of capital.
D)   a flow of services from the university's stock of capital.E) C) and D)
F) B) and D)

Question 19

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) All of the above
F) C) and D)

Question 20

Suppose that the labor market for life guards is initially in equilibrium.Then a new television series debuts which glamorizes the social opportunities for life guards.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)

Exam 18: The Market for the Factors of Production

Which of the following best describes the economy's stock of equipment and structures?

Correct Answer
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Figure 18-3 -Refer to Figure 18-3.Suppose that the price of the output is $20.What is the value of the marginal product of the fourth worker?

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

Correct Answer
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To maximize profit,a competitive firm hires workers up to the point of intersection of the

Correct Answer
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Correct Answer
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Consider the market for capital equipment.Suppose the value of the marginal product of capital equipment increases.Holding all else constant,the equilibrium rental price of capital equipment will

Correct Answer
verified

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

Correct Answer
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The rental price of land is

Correct Answer
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Correct Answer
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Suppose that the labor market for life guards is initially in equilibrium.Then a new television series debuts which glamorizes the social opportunities for life guards.What happens to the equilibrium wage and quantity of life guards?

Correct Answer
verified

Correct Answer
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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

Which of the following is an example of a firm's derived demand?

Correct Answer
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Table 18-6 -Refer to Table 18-6.What is the value for the cell labeled FF?

Correct Answer
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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.In the market for life guards the equilibrium wage

Correct Answer
verified

Table 18-10 Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day. -Refer to Table 18-10.What is the fifth worker's marginal product of labor?

Correct Answer
verified

Consider the labor market for short-order cooks.A labor-augmenting technological change such as a faster food processor will cause

Correct Answer
verified

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

Correct Answer
verified

If one were to consider a university as a business,the computers in the computer labs would be regarded by economists as

Correct Answer
verified

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

Correct Answer
verified

Exam 18: The Market for the Factors of Production

Which of the following best describes the economy's stock of equipment and structures?

Correct AnswerverifiedShow Answer

Figure 18-3 -Refer to Figure 18-3.Suppose that the price of the output is $20.What is the value of the marginal product of the fourth worker?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

To maximize profit,a competitive firm hires workers up to the point of intersection of the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Consider the market for capital equipment.Suppose the value of the marginal product of capital equipment increases.Holding all else constant,the equilibrium rental price of capital equipment will

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The rental price of land is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that the labor market for life guards is initially in equilibrium.Then a new television series debuts which glamorizes the social opportunities for life guards.What happens to the equilibrium wage and quantity of life guards?

Correct AnswerverifiedShow Answer

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

Which of the following is an example of a firm's derived demand?

Correct AnswerverifiedShow Answer

Table 18-6 -Refer to Table 18-6.What is the value for the cell labeled FF?

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.In the market for life guards the equilibrium wage

Correct AnswerverifiedShow Answer

Table 18-10 Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day. -Refer to Table 18-10.What is the fifth worker's marginal product of labor?

Correct AnswerverifiedShow Answer

Consider the labor market for short-order cooks.A labor-augmenting technological change such as a faster food processor will cause

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If one were to consider a university as a business,the computers in the computer labs would be regarded by economists as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct Answer
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