Question 1

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

Accepted Answer

A) True 
 B)False

Question 2

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

Accepted Answer

A)  work and wages
B)  work and leisure
C)  wages and productivity
D)  technology and wagesE) A) and B)
F) None of the above

Question 3

If the selling price of a bushel of cranberries rises, we would expect the demand for labor in the cranberry industry to

Accepted Answer

A)  increase.
B)  decrease.
C)  be unchanged.
D)  increase by less than the corresponding decrease in supply.E) A) and D)
F) A) and B)

Question 4

Suppose that the market for labor is initially in equilibrium. An increase in the price of output will cause the equilibrium wage

Accepted Answer

A)  and the equilibrium quantity of labor to rise.
B)  and the equilibrium quantity of labor to fall.
C)  to rise and the equilibrium quantity of labor to fall.
D)  to fall and the equilibrium quantity of labor to rise.E) A) and B)
F) None of the above

Question 5

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) A) and B)
F) All of the above

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. The marginal product of the fourth worker is

Accepted Answer

A)  60 units of output.
B)  75 units of output.
C)  285 units of output.
D)  345 units of output.E) None of the above
F) B) and C)

Question 7

Table 18-8
Harold and Maude own a dance studio where they and their employees teach ballroom dancing. Their company is a competitive, profit-maximizing firm. Harold and Maude's production function is detailed in the table below. 
-Refer to Table 18-8. If Harold and Maude pay their workers $80 per day and charge $20 per dance lesson, what is the value of the marginal product of the third worker?

Accepted Answer

A)  $400
B)  $800
C)  $1,000
D)  $1,600E) A) and B)
F) A) and C)

Question 8

Figure 18-10 2 and the current wage is W1, A) there is a surplus of labor. B) there is a shortage of labor. C) the quantity of labor supplied exceeds the quantity of labor demanded. D) workers are failing to take into account the work-leisure tradeoff in deciding what quantity of labor to supply at alternative wages." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-10. If the relevant labor demand curve is D2 and the current wage is W1,

Accepted Answer

A)  there is a surplus of labor.
B)  there is a shortage of labor.
C)  the quantity of labor supplied exceeds the quantity of labor demanded.
D)  workers are failing to take into account the work-leisure tradeoff in deciding what quantity of labor to supply at alternative wages.E) All of the above
F) None of the above

Question 9

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 D)
F) All of the above

Question 10

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

Question 11

If a firm is able to charge a higher price for its output, all else equal, the value of the marginal product of labor will decrease to offset the higher price.

Accepted Answer

A) True 
 B)False

Question 12

A firm's demand for labor is derived from its decision to supply a good in another market.

Accepted Answer

A) True 
 B)False

Question 13

Who receives income from capital in the United States?

Accepted Answer

A)  bank depositors
B)  bondholders
C)  stockholders
D)  All of the above are correct.E) B) and D)
F) A) and D)

Question 14

Figure 18-6 
-Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers increase, what happens in the market for bread 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) A) and C)
F) All of the above

Question 15

Which of the following is true at the level of output at which a competitive firm maximizes profit?

Accepted Answer

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

Question 16

Does an upward-sloping labor-supply curve mean that people respond to a decrease in the wage by enjoying more leisure or less leisure?

Accepted Answer

An upward-sloping labor-supply...

Question 17

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

Question 18

Figure 18-9 1. (iii)  The labor supply curve will remain unchanged. A) (i)  and (ii)  only B) (ii)  and (iii)  only C) (i)  and (iii)  only D) (i) , (ii) , and (iii) " class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-9. If the marginal product of labor falls and the price of apples remains unchanged, (i) 
The value of the marginal product of labor will fall.
(ii) 
The quantity of labor demanded will increase above L1.
(iii) 
The labor supply curve will remain unchanged.

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) All of the above

Question 19

The marginal product of land depends only on the quantity of land available.

Accepted Answer

A) True 
 B)False

Question 20

We observe a profit-maximizing firm hiring its 75th employee. It is possible to infer that, when 74 employees are hired, the

Accepted Answer

A)  wage exceeds the value of the marginal product of labor.
B)  value of the marginal product of labor exceeds the wage.
C)  marginal product of labor is increasing.
D)  firm is attempting to increase its market share.E) B) and D)
F) A) and B)

Exam 18: The Markets 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

Figure 18-10 -Refer to Figure 18-10. If the relevant labor demand curve is D₂ and the current wage is W₁,

Correct Answer
verified

Correct Answer
verified

Figure 18-9 -Refer to Figure 18-9. If the marginal product of labor falls and the price of apples remains unchanged, (i) The value of the marginal product of labor will fall. (ii) The quantity of labor demanded will increase above L₁. (iii) The labor supply curve will remain unchanged.

Correct Answer
verified

Correct Answer
verified

Who receives income from capital in the United States?

Correct Answer
verified

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers increase, what happens in the market for bread bakers?

Correct Answer
verified

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

Correct Answer
verified

If a firm is able to charge a higher price for its output, all else equal, the value of the marginal product of labor will decrease to offset the higher price.

Correct Answer
verified

Does an upward-sloping labor-supply curve mean that people respond to a decrease in the wage by enjoying more leisure or less leisure?

Correct Answer
verified
An upward-sloping labor-supply...
View Answer

A firm's demand for labor is derived from its decision to supply a good in another market.

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

We observe a profit-maximizing firm hiring its 75th employee. It is possible to infer that, when 74 employees are hired, the

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. The marginal product of the fourth worker is

Correct Answer
verified

Which of the following is true at the level of output at which a competitive firm maximizes profit?

Correct Answer
verified

Suppose that the market for labor is initially in equilibrium. An increase in the price of output will cause the equilibrium wage

Correct Answer
verified

If the selling price of a bushel of cranberries rises, we would expect the demand for labor in the cranberry industry to

Correct Answer
verified

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

Correct Answer
verified

The marginal product of land depends only on the quantity of land available.

Correct Answer
verified

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

Correct Answer
verified

Exam 18: The Markets 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

Figure 18-10 -Refer to Figure 18-10. If the relevant labor demand curve is D2 and the current wage is W1,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 18-9 -Refer to Figure 18-9. If the marginal product of labor falls and the price of apples remains unchanged, (i) The value of the marginal product of labor will fall. (ii) The quantity of labor demanded will increase above L1. (iii) The labor supply curve will remain unchanged.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Who receives income from capital in the United States?

Correct AnswerverifiedShow Answer

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers increase, what happens in the market for bread bakers?

Correct AnswerverifiedShow Answer

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

Correct AnswerverifiedShow Answer

If a firm is able to charge a higher price for its output, all else equal, the value of the marginal product of labor will decrease to offset the higher price.

Correct AnswerverifiedShow Answer

Does an upward-sloping labor-supply curve mean that people respond to a decrease in the wage by enjoying more leisure or less leisure?

Correct AnswerverifiedAn upward-sloping labor-supply...View AnswerShow Answer

A firm's demand for labor is derived from its decision to supply a good in another market.

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

We observe a profit-maximizing firm hiring its 75th employee. It is possible to infer that, when 74 employees are hired, the

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. The marginal product of the fourth worker is

Correct AnswerverifiedShow Answer

Which of the following is true at the level of output at which a competitive firm maximizes profit?

Correct AnswerverifiedShow Answer

Suppose that the market for labor is initially in equilibrium. An increase in the price of output will cause the equilibrium wage

Correct AnswerverifiedShow Answer

If the selling price of a bushel of cranberries rises, we would expect the demand for labor in the cranberry industry to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The marginal product of land depends only on the quantity of land available.

Correct AnswerverifiedShow Answer

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Figure 18-10 -Refer to Figure 18-10. If the relevant labor demand curve is D₂ and the current wage is W₁,

Correct Answer
verified

Correct Answer
verified

Figure 18-9 -Refer to Figure 18-9. If the marginal product of labor falls and the price of apples remains unchanged, (i) The value of the marginal product of labor will fall. (ii) The quantity of labor demanded will increase above L₁. (iii) The labor supply curve will remain unchanged.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
An upward-sloping labor-supply...
View 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
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