Question 1

Scenario 18-2
Gertrude Kelp owns three boats that participate in commercial fishing for fresh Pacific salmon off the coast of Alaska.As part of her business she hires a captain and several crew members for each boat.In the market for fresh Pacific salmon,there are thousands of firms like Gertrude's.While Gertrude usually catches a significant number of fish each year,her contribution to the entire harvest of salmon is negligible relative to the size of the market.
-Refer to Scenario 18-2.When Gertrude participates in the labor market to hire crew members for her boats,she is most likely considered a

Accepted Answer

A)   demander of labor services.
B)   supplier of labor services.
C)   demander of capital.
D)   supplier of capital.E) None of the above
F) All of the above

Question 2

Table 18-8
 
-Refer to Table 18-8.What is the marginal product of the third worker?

Accepted Answer

A)   7
B)   8
C)   25
D)   75E) B) and D)
F) B) and C)

Question 3

Suppose that a violent earthquake causes the uninhabited Hawaiian island of Mokuauia (also called Goat Island) to fall into the Pacific Ocean.No people are killed or injured,and since the island is undeveloped,no buildings are destroyed.The island was a source of tourist income for Hawaiian landowners.Which of the following statements correctly describes the rents earned by the people who own land on the surrounding islands?

Accepted Answer

A)   As the supply of vacation land decreases,the marginal productivity of the remaining land will decrease;thus rents will decrease.
B)   As the supply of vacation land decreases,the marginal productivity of the remaining land will increase;thus,rents will decrease.
C)   As the supply of vacation land decreases,the marginal productivity of the remaining land will increase;thus,rents will increase.
D)   There would be no change in the rents earned by the other landowners because the effects of supply and demand would exactly cancel each other out.E) B) and C)
F) B) and D)

Question 4

Which of the following events could increase the demand for labor?

Accepted Answer

A)   A decrease in output price
B)   A decrease in the amount of capital available for workers to use
C)   An increase in the marginal productivity of workers
D)   A decrease in the wage paid to workersE) None of the above
F) A) and B)

Question 5

Economists define capital as the

Accepted Answer

A)   accumulation of goods produced in the past that are being used in the present to produce new goods and services.
B)   the goods and services that are most affected by changes in technology.
C)   factors of production that can be rented by firms.
D)   factors of production that can be purchased by firms.E) C) and D)
F) All of the above

Question 6

Because of diminishing returns,a factor in scarce supply has

Accepted Answer

A)   a low marginal product and a low rental price.
B)   a low marginal product and a high rental price.
C)   a high marginal product and a low rental price.
D)   a high marginal product and a high rental price.E) B) and C)
F) A) and D)

Question 7

If the value of the marginal product of labor is less than the wage,then the firm could

Accepted Answer

A)   increase profit by hiring additional labor.
B)   increase profit by reducing the amount of labor hired.
C)   increase revenue by lowering output.
D)   reduce total cost by hiring additional workers.E) A) and D)
F) C) and D)

Question 8

Suppose that a new invention increases the marginal productivity of labor,shifting labor demand to the right.Such an invention would be an example of

Accepted Answer

A)   labor-saving technology.
B)   labor-augmenting technology.
C)   Luddite technology.
D)   supply-shifting technology.E) A) and D)
F) B) and D)

Question 9

Table 18-4
Consider the following daily production data for Wills Golf Balls.Wills sells golf balls for $2.50 cents each and pays the workers a wage of $325 per day.
 
-Refer to Table 18-4.What is the value of the marginal product of the second worker?

Accepted Answer

A)   $180
B)   $450
C)   $950
D)   $1,080E) B) and C)
F) B) and D)

Question 10

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) B) and C)

Question 11

Let L represent the quantity of labor and let Q represent the quantity of output.Suppose a certain production function includes the points (L = 7,Q = 27),(L = 8,Q = 35),and
(L = 9,Q = 45).Based on these three points,this production function exhibits diminishing marginal product.

Accepted Answer

A) True 
 B)False

Question 12

Table 18-4
Consider the following daily production data for Wills Golf Balls.Wills sells golf balls for $2.50 cents each and pays the workers a wage of $325 per day.
 
-Refer to Table 18-4.What is the third worker's marginal product of labor?

Accepted Answer

A)   120 golf balls
B)   140 golf balls
C)   160 golf balls
D)   180 golf ballsE) C) and D)
F) All of the above

Question 13

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 14

If the demand for labor in a particular industry increases,the equilibrium wage in that industry will also increase.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)   the equilibrium wage and the quantity of labor to both rise.
B)   the equilibrium wage and the quantity of labor to both fall.
C)   the equilibrium wage to rise and the quantity of labor to fall.
D)   the equilibrium wage to fall and the quantity of labor to rise.E) A) and C)
F) All of the above

Question 16

Table 18-5
 
-Refer to Table 18-5.If the firm hires two workers,the two workers together produce

Accepted Answer

A)   80 units.
B)   100 units.
C)   180 units.
D)   200 units.E) B) and C)
F) C) and D)

Question 17

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 in the following way:

Accepted Answer

A)   Total employment in Italy decreased.
B)   Wages in Italy increased.
C)   The marginal product of labor in Italy decreased.
D)   All of the above are correct.E) A) and C)
F) C) and D)

Question 18

Which of the following would shift a market labor supply curve to the right?

Accepted Answer

A)   an increase in the price of output
B)   an increase in immigration
C)   a labor-saving technological change
D)   a decrease in the wage rateE) A) and D)
F) C) and D)

Question 19

Which of the following statements is correct? An individual worker's labor supply curve

Accepted Answer

A)   can never be backward sloping.
B)   slopes backward if that person responds to a higher wage by taking fewer hours of leisure per week.
C)   slopes backward if that person responds to a higher opportunity cost of leisure by working fewer hours per week.
D)   slopes upward if that person works the same number of hours per week,regardless of the opportunity cost of leisure.E) A) and D)
F) None of the above

Question 20

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.Suppose that Harry pays each worker $80 per day and that he charges each customer $20 to have his driveway shoveled.What is the value of the marginal product of labor for the second worker?

Accepted Answer

A)   $200
B)   $240
C)   $800
D)   $960E) B) and C)
F) A) and D)

Exam 18: The Markets for the Factors of Production

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 in the following way:

Correct Answer
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Table 18-4 Consider the following daily production data for Wills Golf Balls.Wills sells golf balls for $2.50 cents each and pays the workers a wage of $325 per day. -Refer to Table 18-4.What is the third worker's marginal product of labor?

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

Correct Answer
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Let L represent the quantity of labor and let Q represent the quantity of output.Suppose a certain production function includes the points (L = 7,Q = 27),(L = 8,Q = 35),and (L = 9,Q = 45).Based on these three points,this production function exhibits diminishing marginal product.

Correct Answer
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Correct Answer
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If the demand for labor in a particular industry increases,the equilibrium wage in that industry will also increase.

Correct Answer
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Correct Answer
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Table 18-5 -Refer to Table 18-5.If the firm hires two workers,the two workers together produce

Correct Answer
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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
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Table 18-8 -Refer to Table 18-8.What is the marginal product of the third worker?

Correct Answer
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Correct Answer
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Which of the following statements is correct? An individual worker's labor supply curve

Correct Answer
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Economists define capital as the

Correct Answer
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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

Which of the following events could increase the demand for labor?

Correct Answer
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If the value of the marginal product of labor is less than the wage,then the firm could

Correct Answer
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Table 18-4 Consider the following daily production data for Wills Golf Balls.Wills sells golf balls for $2.50 cents each and pays the workers a wage of $325 per day. -Refer to Table 18-4.What is the value of the marginal product of the second worker?

Correct Answer
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Which of the following would shift a market labor supply curve to the right?

Correct Answer
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Suppose that a new invention increases the marginal productivity of labor,shifting labor demand to the right.Such an invention would be an example of

Correct Answer
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Because of diminishing returns,a factor in scarce supply has

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

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 in the following way:

Correct AnswerverifiedShow Answer

Table 18-4 Consider the following daily production data for Wills Golf Balls.Wills sells golf balls for $2.50 cents each and pays the workers a wage of $325 per day. -Refer to Table 18-4.What is the third worker's marginal product of labor?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Let L represent the quantity of labor and let Q represent the quantity of output.Suppose a certain production function includes the points (L = 7,Q = 27),(L = 8,Q = 35),and (L = 9,Q = 45).Based on these three points,this production function exhibits diminishing marginal product.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the demand for labor in a particular industry increases,the equilibrium wage in that industry will also increase.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 18-5 -Refer to Table 18-5.If the firm hires two workers,the two workers together produce

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

Table 18-8 -Refer to Table 18-8.What is the marginal product of the third worker?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is correct? An individual worker's labor supply curve

Correct AnswerverifiedShow Answer

Economists define capital as the

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

Which of the following events could increase the demand for labor?

Correct AnswerverifiedShow Answer

If the value of the marginal product of labor is less than the wage,then the firm could

Correct AnswerverifiedShow Answer

Table 18-4 Consider the following daily production data for Wills Golf Balls.Wills sells golf balls for $2.50 cents each and pays the workers a wage of $325 per day. -Refer to Table 18-4.What is the value of the marginal product of the second worker?

Correct AnswerverifiedShow Answer

Which of the following would shift a market labor supply curve to the right?

Correct AnswerverifiedShow Answer

Suppose that a new invention increases the marginal productivity of labor,shifting labor demand to the right.Such an invention would be an example of

Correct AnswerverifiedShow Answer

Because of diminishing returns,a factor in scarce supply has

Correct AnswerverifiedShow Answer

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

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