Question 1

Table 18-1 
-Refer to Table 18-1. Suppose that the firm pays its workers $50 per day. Each unit of output sells for $20. How many days of labor should the firm hire?

Accepted Answer

A)  3
B)  4
C)  5
D)  6E) B) and C)
F) None of the above

Question 2

Figure 18-2
The figure below shows the production function for a particular firm. 
-Refer to Figure 18-2. Suppose the firm pays a wage equal to $160 per unit of labor and sells its output at $10 per unit. What is the value of the marginal product of labor for the third worker?

Accepted Answer

A)  20 units
B)  $200
C)  $2,720
D)  $3,200E) All of the above
F) C) and D)

Question 3

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Accepted Answer

A) True 
 B)False

Question 4

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 B)
F) None of the above

Question 5

Scenario 18-4
In 1997, Albania experienced a civil war. The civil unrest sent thousands of refugees across the Adriatic Sea to Italy where they sought relief from the fighting.
-Refer to Scenario 18-4. The Albanian civil war probably affected Italian labor markets by causing

Accepted Answer

A)  total employment in Italy to decrease.
B)  wages in Italy to increase.
C)  the marginal product of labor in Italy to decrease.
D)  All of the above are correct.E) B) and D)
F) B) and C)

Question 6

Suppose that a large lake in the middle of Minnesota evaporates, leaving more fertile farm land for growing corn available. Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and rents earned by landowners?

Accepted Answer

A)  Both wages and rents would increase.
B)  Both wages and rents would decrease.
C)  Wages would increase, and rents would decrease.
D)  Wages would decrease, and rents would increase.E) A) and D)
F) All of the above

Question 7

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 third worker?

Accepted Answer

A)  $2
B)  $10
C)  $40
D)  $280E) B) and D)
F) A) and C)

Question 8

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

Accepted Answer

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

Question 9

Which of the following accurately describes how earnings from capital eventually get paid to households?

Accepted Answer

A)  Households can own a stock of capital and rent it to firms.
B)  Households lend money to firms, who then pay interest to the households.
C)  Households that own stock in firms receive dividends.
D)  All of the above are correct.E) B) and C)
F) All of the above

Question 10

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. Assume that MadeFromScratch is a competitive, profit-maximizing firm. If the market price of cupcakes increases from $2.00 to $2.50, how many workers would the firm then hire?

Accepted Answer

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

Question 11

Table 18-12
The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. 
-Refer to Table 18-12. Let Q represent the number of boxes of envelopes produced per week. Which of the following points is not a point on this firm's production function?

Accepted Answer

A)  (L = 2, Q = 240) .
B)  (L = 3, Q = 332) .
C)  (L = 4, Q = 408) .
D)  (L = 5, Q = 494) .E) A) and C)
F) A) and B)

Question 12

A competitive, profit-maximizing firm hires labor up to the point at which the wage is equal to the __________.

Accepted Answer

value of t...

Question 13

Assume the market for candles is competitive. A new invention leads to labor-augmenting technological progress in the production of candles. This development

Accepted Answer

A)  decreases the demand for workers who make candles and decreases their equilibrium wage.
B)  increases the demand for workers who make candles and increases their equilibrium wage.
C)  increases the supply of workers who make candles and decreases their equilibrium wage.
D)  increases the supply of workers who make candles and increases their equilibrium wage.E) All of the above
F) None of the above

Question 14

If your wage increases from $10 per hour to $15 per hour, then your

Accepted Answer

A)  opportunity cost of an hour of leisure decreases by $5 per hour.
B)  opportunity cost of an hour of leisure increases by $5 per hour.
C)  out-of-pocket cost of an hour of leisure decreases by $5 per hour.
D)  out-of-pocket cost of an hour of leisure increases by $5 per hour.E) A) and D)
F) A) and C)

Question 15

Both theory and history point to a close relationship between increases in

Accepted Answer

A)  labor demand and increases in labor supply.
B)  labor demand and decreases in real wages.
C)  the productivity of labor and increases in real wages.
D)  interest rates and decreases in real wages.E) A) and B)
F) A) and C)

Question 16

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) A) and C)
F) C) and D)

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 $20 per unit, and it pays each of its workers $1,250 per week. The firm maximizes profit by hiring

Accepted Answer

A)  3 workers.
B)  4 workers.
C)  5 workers.
D)  6 workers.E) A) and D)
F) A) and B)

Question 18

Table 18-2 
-Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week by various numbers of workers. If the price per bracelet in a perfectly competitive product market is $8, how many workers would the firm employ if the weekly wage rate is $800?

Accepted Answer

A)  1
B)  2
C)  3
D)  4E) None of the above
F) C) and D)

Question 19

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, in the labor market for health care employees the equilibrium wage

Accepted Answer

A)  increases, and the equilibrium quantity of labor increases.
B)  increases, and the equilibrium quantity of labor decreases.
C)  decreases, and the equilibrium quantity of labor increases.
D)  decreases, and the equilibrium quantity of labor decreases.E) B) and C)
F) A) and D)

Question 20

Because of diminishing returns, a factor in abundant supply has a

Accepted Answer

A)  high marginal product and a high rental price.
B)  high marginal product and a low rental price.
C)  low marginal product and a high rental price.
D)  low marginal product and a low rental price.E) None of the above
F) C) and D)

Exam 18: The Markets for the Factors of Production

Table 18-2 -Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week by various numbers of workers. If the price per bracelet in a perfectly competitive product market is $8, how many workers would the firm employ if the weekly wage rate is $800?

Correct Answer
verified

Suppose that a large lake in the middle of Minnesota evaporates, leaving more fertile farm land for growing corn available. Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and rents earned by landowners?

Correct Answer
verified

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Correct Answer
verified

Who receives income from capital in the United States?

Correct Answer
verified

Assume the market for candles is competitive. A new invention leads to labor-augmenting technological progress in the production of candles. This development

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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 third worker?

Correct Answer
verified

Which of the following accurately describes how earnings from capital eventually get paid to households?

Correct Answer
verified

A competitive, profit-maximizing firm hires labor up to the point at which the wage is equal to the __________.

Correct Answer
verified
value of t...
View Answer

If your wage increases from $10 per hour to $15 per hour, then your

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 $20 per unit, and it pays each of its workers $1,250 per week. The firm maximizes profit by hiring

Correct Answer
verified

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

Correct Answer
verified

Both theory and history point to a close relationship between increases in

Correct Answer
verified

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, in the labor market for health care employees the equilibrium wage

Correct Answer
verified

Correct Answer
verified

Scenario 18-4 In 1997, Albania experienced a civil war. The civil unrest sent thousands of refugees across the Adriatic Sea to Italy where they sought relief from the fighting. -Refer to Scenario 18-4. The Albanian civil war probably affected Italian labor markets by causing

Correct Answer
verified

Because of diminishing returns, a factor in abundant supply has a

Correct Answer
verified

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. Suppose the firm pays a wage equal to $160 per unit of labor and sells its output at $10 per unit. What is the value of the marginal product of labor for the third worker?

Correct Answer
verified

Table 18-1 -Refer to Table 18-1. Suppose that the firm pays its workers $50 per day. Each unit of output sells for $20. How many days of labor should the firm hire?

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Table 18-2 -Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week by various numbers of workers. If the price per bracelet in a perfectly competitive product market is $8, how many workers would the firm employ if the weekly wage rate is $800?

Correct AnswerverifiedShow Answer

Suppose that a large lake in the middle of Minnesota evaporates, leaving more fertile farm land for growing corn available. Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and rents earned by landowners?

Correct AnswerverifiedShow Answer

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Correct AnswerverifiedShow Answer

Who receives income from capital in the United States?

Correct AnswerverifiedShow Answer

Assume the market for candles is competitive. A new invention leads to labor-augmenting technological progress in the production of candles. This development

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

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 third worker?

Correct AnswerverifiedShow Answer

Which of the following accurately describes how earnings from capital eventually get paid to households?

Correct AnswerverifiedShow Answer

A competitive, profit-maximizing firm hires labor up to the point at which the wage is equal to the __________.

Correct Answerverifiedvalue of t...View AnswerShow Answer

If your wage increases from $10 per hour to $15 per hour, then your

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 $20 per unit, and it pays each of its workers $1,250 per week. The firm maximizes profit by hiring

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Both theory and history point to a close relationship between increases in

Correct AnswerverifiedShow Answer

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, in the labor market for health care employees the equilibrium wage

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Scenario 18-4 In 1997, Albania experienced a civil war. The civil unrest sent thousands of refugees across the Adriatic Sea to Italy where they sought relief from the fighting. -Refer to Scenario 18-4. The Albanian civil war probably affected Italian labor markets by causing

Correct AnswerverifiedShow Answer

Because of diminishing returns, a factor in abundant supply has a

Correct AnswerverifiedShow Answer

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. Suppose the firm pays a wage equal to $160 per unit of labor and sells its output at $10 per unit. What is the value of the marginal product of labor for the third worker?

Correct AnswerverifiedShow Answer

Table 18-1 -Refer to Table 18-1. Suppose that the firm pays its workers $50 per day. Each unit of output sells for $20. How many days of labor should the firm hire?

Correct AnswerverifiedShow 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
verified
value of t...
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
verified