Question 1

Figure 18-2
The figure below shows the production function for a particular firm. 
-Refer to Figure 18-2. The marginal product of the fourth worker is

Accepted Answer

A)  100 units.
B)  25 units.
C)  20 units.
D)  10 units.E) C) and D)
F) All of the above

Question 2

Table 18-10 
-Refer to Table 18-10. This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor. Each baseball sells for $2.50 in a competitive market and the firm pays each unit of labor a wage equal to $225 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) C) and D)
F) A) and D)

Question 3

An increase in the supply of labor has the effect of decreasing the

Accepted Answer

A)  wage.
B)  marginal product of labor.
C)  value of the marginal product of labor.
D)  All of the above are correct.E) A) and C)
F) B) and C)

Question 4

Table 18-5 
-Refer to Table 18-5. How many workers should the firm hire?

Accepted Answer

A)  1
B)  2
C)  3
D)  4E) A) and B)
F) A) and C)

Question 5

The basic tools of supply and demand apply to

Accepted Answer

A)  both markets for goods and services and markets for labor services.
B)  markets for goods and services but not to markets for labor services.
C)  markets for goods and services but not to markets for factors of production.
D)  all markets except those in which demand is derived demand.E) B) and D)
F) B) and C)

Question 6

Willie's wage increased, and he responded by enjoying more hours of leisure per day. Is Willie's behavior consistent with an upward-sloping labor-supply curve?

Accepted Answer

No. If Willie's labor-supply c...

Question 7

Roxanne's hourly wage increases from $9 to $13. Which of the following describes a consequence of the increase in Roxanne's wage?

Accepted Answer

A)  The opportunity cost of Roxanne's leisure time has increased.
B)  Roxanne may choose to work fewer hours due to the increase in her wage.
C)  If Roxanne's labor supply curve is upward sloping, she will choose to work fewer hours.
D)  Both a and b are correct.E) A) and B)
F) C) and D)

Question 8

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

Question 9

What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

Accepted Answer

A)  Labor supply decreases in Mexico and decreases in the United States.
B)  Labor supply increases in the United States and increases in Mexico.
C)  Labor supply increases in the United States and decreases in Mexico.
D)  Labor supply increases in Mexico and decreases in United States.E) A) and B)
F) A) and D)

Question 10

Table 18-7 
-Refer to Table 18-7. The fact that the production function exhibits diminishing marginal productivity implies that

Accepted Answer

A)  total production decreases beyond a certain level of output.
B)  labor markets are not always competitive.
C)  the additions to total output get smaller as more workers are hired.
D)  marginal profit is negative.E) B) and D)
F) A) and B)

Question 11

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 12

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-B. What is the value of the marginal product of the second worker?

Accepted Answer

A)  $150
B)  $350
C)  $450
D)  $1,050E) A) and C)
F) None of the above

Question 13

Figure 18-10 1 to D2? A) a change in workers' attitudes toward the work-leisure tradeoff B) decreases in wages in other labor markets C) an increase in the price of firms' output D) All of the above are correct." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-10. Which of the following would shift of the labor demand curve from D1 to D2?

Accepted Answer

A)  a change in workers' attitudes toward the work-leisure tradeoff
B)  decreases in wages in other labor markets
C)  an increase in the price of firms' output
D)  All of the above are correct.E) B) and D)
F) B) and C)

Question 14

Suppose XYZ Corporation is currently renting 300 units of capital at a rental price of $500 units per unit. The value of the marginal product of the 300th unit of capital is $400. How can the corporation increase its profit?

Accepted Answer

In view of the fact that the <img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> ...

Question 15

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

Question 16

Table 18-A 
-Refer to Table 18-4. How many workers should the firm hire?

Accepted Answer

A)  1
B)  2
C)  3
D)  4E) B) and C)
F) A) and D)

Question 17

Most of the total income earned in the U.S. economy is ultimately paid to

Accepted Answer

A)  landowners in the form of rent.
B)  owners of capital in the form of interest.
C)  households in the form of wages and fringe benefits.
D)  households in the form of welfare, disability, and Social Security payments.E) A) and D)
F) C) and D)

Question 18

Competitive firms hire workers until the additional benefit they receive from the last worker hired is equal to (i) 
The additional cost of that worker.
(ii) 
The wage paid to that worker.
(iii) 
The marginal product of that worker.

Accepted Answer

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

Question 19

Labor-saving technology causes which of the following? (i) 
The marginal productivity of labor increases.
(ii) 
The marginal productivity of labor decreases.
(iii) 
Labor demand shifts to the right.
(iv) 
Labor demand shifts to the left.

Accepted Answer

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

Question 20

Scenario 18-8
Suppose the following events occur in the market for university economics professors.
Event 1: A recession in the U.S. economy lowers the opportunity cost of going to graduate school in economics to become a university economics professor.
Event 2: A decreasing number of students in U.S. primary and secondary schools decreases the number of students entering college, decreasing the output price of university economics professors' services.
-Refer to Scenario 18-8. As a result of these two events, holding all else constant, the equilibrium wages 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 wage.E) C) and D)
F) All of the above

Exam 18: The Markets for the Factors of Production

Figure 18-10 -Refer to Figure 18-10. Which of the following would shift of the labor demand curve from D₁ to D₂?

Correct Answer
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Willie's wage increased, and he responded by enjoying more hours of leisure per day. Is Willie's behavior consistent with an upward-sloping labor-supply curve?

Correct Answer
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No. If Willie's labor-supply c...
View Answer

Table 18-A -Refer to Table 18-4. How many workers should the firm hire?

Correct Answer
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What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

Correct Answer
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Suppose XYZ Corporation is currently renting 300 units of capital at a rental price of $500 units per unit. The value of the marginal product of the 300^th unit of capital is $400. How can the corporation increase its profit?

Correct Answer
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In view of the fact that the ...
View 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-B. What is the value of the marginal product of the second worker?

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

Competitive firms hire workers until the additional benefit they receive from the last worker hired is equal to (i) The additional cost of that worker. (ii) The wage paid to that worker. (iii) The marginal product of that worker.

Correct Answer
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Labor-saving technology causes which of the following? (i) The marginal productivity of labor increases. (ii) The marginal productivity of labor decreases. (iii) Labor demand shifts to the right. (iv) Labor demand shifts to the left.

Correct Answer
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Correct Answer
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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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Table 18-5 -Refer to Table 18-5. How many workers should the firm hire?

Correct Answer
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Most of the total income earned in the U.S. economy is ultimately paid to

Correct Answer
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Roxanne's hourly wage increases from $9 to $13. Which of the following describes a consequence of the increase in Roxanne's wage?

Correct Answer
verified

Table 18-7 -Refer to Table 18-7. The fact that the production function exhibits diminishing marginal productivity implies that

Correct Answer
verified

An increase in the supply of labor has the effect of decreasing the

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. In the market for life guards the equilibrium wage

Correct Answer
verified

The basic tools of supply and demand apply to

Correct Answer
verified

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. The marginal product of the fourth worker is

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Figure 18-10 -Refer to Figure 18-10. Which of the following would shift of the labor demand curve from D1 to D2?

Correct AnswerverifiedShow Answer

Willie's wage increased, and he responded by enjoying more hours of leisure per day. Is Willie's behavior consistent with an upward-sloping labor-supply curve?

Correct AnswerverifiedNo. If Willie's labor-supply c...View AnswerShow Answer

Table 18-A -Refer to Table 18-4. How many workers should the firm hire?

Correct AnswerverifiedShow Answer

What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

Correct AnswerverifiedShow Answer

Suppose XYZ Corporation is currently renting 300 units of capital at a rental price of $500 units per unit. The value of the marginal product of the 300th unit of capital is $400. How can the corporation increase its profit?

Correct AnswerverifiedIn view of the fact that the ...View AnswerShow 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-B. What is the value of the marginal product of the second worker?

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

Competitive firms hire workers until the additional benefit they receive from the last worker hired is equal to (i) The additional cost of that worker. (ii) The wage paid to that worker. (iii) The marginal product of that worker.

Correct AnswerverifiedShow Answer

Labor-saving technology causes which of the following? (i) The marginal productivity of labor increases. (ii) The marginal productivity of labor decreases. (iii) Labor demand shifts to the right. (iv) Labor demand shifts to the left.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 18-5 -Refer to Table 18-5. How many workers should the firm hire?

Correct AnswerverifiedShow Answer

Most of the total income earned in the U.S. economy is ultimately paid to

Correct AnswerverifiedShow Answer

Roxanne's hourly wage increases from $9 to $13. Which of the following describes a consequence of the increase in Roxanne's wage?

Correct AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. The fact that the production function exhibits diminishing marginal productivity implies that

Correct AnswerverifiedShow Answer

An increase in the supply of labor has the effect of decreasing the

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

The basic tools of supply and demand apply to

Correct AnswerverifiedShow Answer

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. The marginal product of the fourth worker is

Correct AnswerverifiedShow Answer

Figure 18-10 -Refer to Figure 18-10. Which of the following would shift of the labor demand curve from D₁ to D₂?

Correct Answer
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No. If Willie's labor-supply c...
View Answer

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Suppose XYZ Corporation is currently renting 300 units of capital at a rental price of $500 units per unit. The value of the marginal product of the 300^th unit of capital is $400. How can the corporation increase its profit?

Correct Answer
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In view of the fact that the ...
View Answer

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

Correct Answer
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