Question 1

Consider the market for capital equipment.Suppose the price of firms' output 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) All of the above
F) A) and B)

Question 2

The distribution of immigrant workers in the United States is

Accepted Answer

A)   concentrated in low-skilled jobs.
B)   concentrated in high-skilled jobs.
C)   evenly distributed among low-, medium-, and high-skilled jobs.
D)   more concentrated in low- and high-skilled jobs than in medium-skilled jobs.E) A) and B)
F) B) and D)

Question 3

Approximately how much of the income in the United States is earned by workers in the form of wages and fringe benefits?

Accepted Answer

A)   25 percent
B)   50 percent
C)   75 percent
D)   90 percentE) B) and D)
F) None of the above C

Question 4

Suppose an influenza pandemic were to significantly decrease the population of a country.We would predict a decrease in the marginal product of land in that country.

Accepted Answer

A) True 
 B)False

Question 5

Describe the process by which the market for capital and the market for land reach equilibrium.As part of your description,elaborate on the role of the stock of the resource versus the flow of services from the resource.

Accepted Answer

Equilibriums in the markets for land and...

Question 6

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

Accepted Answer

A)   technological progress
B)   an increase in the price of firms' output
C)   an increase in the supply of a relevant factor of production other than labor
D)   All of the above are correct.E) A) and B)
F) B) and D)

Question 7

Average productivity can be measured as total output divided by total units of labor.

Accepted Answer

A) True 
 B)False

Question 8

Suppose that a toxic waste spill renders half of the land in New Jersey uninhabitable.Assuming that land and labor are complements in the 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) None of the above
F) B) and D)

Question 9

Consider the labor market for short-order cooks.A shortage in the availability of frying pans 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) None of the above
F) A) and D)

Question 10

As a result of severe flooding,a farmer loses half of his productive farmland.He should expect to see the marginal productivity of his remaining land

Accepted Answer

A)   increase.
B)   remain unchanged.
C)   decrease but remain positive.
D)   decrease and become negative.E) A) and B)
F) A) and C) A

Question 11

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

Question 12

If the wage exceeds the value of the marginal product of labor,then hiring another worker

Accepted Answer

A)   decreases the firm's total revenue.
B)   increases the firm's profit.
C)   decreases the firm's total cost.
D)   decreases the firm's profit.E) B) and C)
F) C) and D)

Question 13

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

Question 14

Table 18-6
 
-Refer to Table 18-6.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) All of the above
F) A) and C)

Question 15

Suppose that the labor market for life guards is initially in equilibrium.Then the marginal productivity of life guards increases.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) B) and C)
F) A) and B)

Question 16

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.The marginal product of labor begins to diminish with the addition of which worker?

Accepted Answer

A)   the 1st worker
B)   the 2nd worker
C)   the 3rd worker
D)   the 4th workerE) A) and C)
F) A) and B)

Question 17

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

Accepted Answer

A)   households in the form of wages and fringe benefits.
B)   landowners in the form of rent.
C)   landowners in the form of interest.
D)   landowners in the form of profit.E) A) and D)
F) All of the above

Question 18

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 19

Scenario 18-1
Harry owns a snow-removal business. He hires workers to shovel driveways for him during the winter. The first worker he hires can shovel twelve driveways in one day. When Harry hires two workers, they can shovel a total of 22 driveways in one day. When Harry hires a third worker, he shovels an additional eight driveways in one day.
-Refer to Scenario 18-1.What is the total productivity of three workers?

Accepted Answer

A)   12
B)   22
C)   30
D)   42E) A) and D)
F) C) and D)

Question 20

Suppose the government designates certain areas within a community to be "wetlands," making it illegal to build on the land.What happens to land not classified as "wetlands" within the community?
(i) The price of non-wetland land will rise.
(ii) The marginal product of non-wetland land will fall.
(iii) The marginal product of non-wetland land will rise.

Accepted Answer

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

Exam 18: The Market For the Factors of Production.

Consider the market for capital equipment.Suppose the price of firms' output increases.Holding all else constant,the equilibrium rental price of capital equipment will

Correct Answer
verified

The distribution of immigrant workers in the United States is

Correct Answer
verified

Approximately how much of the income in the United States is earned by workers in the form of wages and fringe benefits?

Correct Answer
verified
C

Suppose an influenza pandemic were to significantly decrease the population of a country.We would predict a decrease in the marginal product of land in that country.

Correct Answer
verified

Describe the process by which the market for capital and the market for land reach equilibrium.As part of your description,elaborate on the role of the stock of the resource versus the flow of services from the resource.

Correct Answer
verified
Equilibriums in the markets for land and...
View 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
verified

Average productivity can be measured as total output divided by total units of labor.

Correct Answer
verified

Suppose that a toxic waste spill renders half of the land in New Jersey uninhabitable.Assuming that land and labor are complements in the production function,what would happen to the wages earned by workers and rents earned by landowners?

Correct Answer
verified

Consider the labor market for short-order cooks.A shortage in the availability of frying pans will cause

Correct Answer
verified

As a result of severe flooding,a farmer loses half of his productive farmland.He should expect to see the marginal productivity of his remaining land

Correct Answer
verified
A

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

Correct Answer
verified

If the wage exceeds the value of the marginal product of labor,then hiring another worker

Correct Answer
verified

Correct Answer
verified

Table 18-6 -Refer to Table 18-6.The fact that the production function exhibits diminishing marginal productivity implies that

Correct Answer
verified

Suppose that the labor market for life guards is initially in equilibrium.Then the marginal productivity of life guards increases.What happens to the equilibrium wage and quantity of life guards?

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.The marginal product of labor begins to diminish with the addition of which worker?

Correct Answer
verified

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

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

Correct Answer
verified

Correct Answer
verified
C

Exam 18: The Market For the Factors of Production.

Consider the market for capital equipment.Suppose the price of firms' output increases.Holding all else constant,the equilibrium rental price of capital equipment will

Correct AnswerverifiedShow Answer

The distribution of immigrant workers in the United States is

Correct AnswerverifiedShow Answer

Approximately how much of the income in the United States is earned by workers in the form of wages and fringe benefits?

Correct AnswerverifiedC

Suppose an influenza pandemic were to significantly decrease the population of a country.We would predict a decrease in the marginal product of land in that country.

Correct AnswerverifiedShow Answer

Describe the process by which the market for capital and the market for land reach equilibrium.As part of your description,elaborate on the role of the stock of the resource versus the flow of services from the resource.

Correct AnswerverifiedEquilibriums in the markets for land and...View AnswerShow 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 AnswerverifiedShow Answer

Average productivity can be measured as total output divided by total units of labor.

Correct AnswerverifiedShow Answer

Suppose that a toxic waste spill renders half of the land in New Jersey uninhabitable.Assuming that land and labor are complements in the production function,what would happen to the wages earned by workers and rents earned by landowners?

Correct AnswerverifiedShow Answer

Consider the labor market for short-order cooks.A shortage in the availability of frying pans will cause

Correct AnswerverifiedShow Answer

As a result of severe flooding,a farmer loses half of his productive farmland.He should expect to see the marginal productivity of his remaining land

Correct AnswerverifiedA

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

Correct AnswerverifiedShow Answer

If the wage exceeds the value of the marginal product of labor,then hiring another worker

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 18-6 -Refer to Table 18-6.The fact that the production function exhibits diminishing marginal productivity implies that

Correct AnswerverifiedShow Answer

Suppose that the labor market for life guards is initially in equilibrium.Then the marginal productivity of life guards increases.What happens to the equilibrium wage and quantity of life guards?

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.The marginal product of labor begins to diminish with the addition of which worker?

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedC

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C

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Equilibriums in the markets for land and...
View Answer

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Correct Answer
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A

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Correct Answer
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C