Question 1

Over time, there have been technological advances in the production of radios. At the same time, it has become less popular to listen to radio. Taking these two events into account, what would be the likely effect on the wages of workers who manufacture radios?

Accepted Answer

The technological advances have the effe...

Question 2

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

Question 3

Table 18-9
The following table shows the production function for a particular business. The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis. 
-Refer to Table 18-9. Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day. What is the value of the marginal product of labor for the third worker?

Accepted Answer

A)   $90
B)   $250
C)   $300
D)   $800E) A) and C)
F) A) and B)

Question 4

Using the theory of wage determination, explain why wages in developing countries, where levels of capital are small, are typically quite low.

Accepted Answer

Wages are determined by the value of wor...

Question 5

If the demand for labor decreases and the supply of labor is unchanged, then the opportunity cost of leisure will decrease.

Accepted Answer

A) True 
 B)False

Question 6

The marginal product of labor is defined as the change in

Accepted Answer

A)   output per additional unit of revenue.
B)   output per additional unit of labor.
C)   revenue per additional unit of labor.
D)   revenue per additional unit of output.E) A) and D)
F) None of the above

Question 7

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 decrease, 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 D)
F) C) and D)

Question 8

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 9

Table 18-7 
-Refer to Table 18-7. It is apparent from this table that increasing marginal product

Accepted Answer

A)   occurs only after the first worker is hired.
B)   occurs only after the second worker is hired.
C)   occurs only after the third worker is hired.
D)   never occurs.E) B) and D)
F) All of the above

Question 10

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

Question 11

An upward-sloping labor-supply curve implies that an increase in the wage induces

Accepted Answer

A)   firms to decrease the quantity of labor they hire.
B)   firms to increase the quantity of labor they hire.
C)   workers to increase the quantity of labor they supply.
D)   workers to increase the quantity of leisure they enjoy.E) A) and C)
F) A) and B)

Question 12

Table 18-7 
-Refer to Table 18-7. What is the value of the cell labeled JJ?

Accepted Answer

A)   -$300
B)   -$200
C)   -$100
D)   $0E) A) and C)
F) A) and B)

Question 13

For a worker, the opportunity cost of an hour of leisure

Accepted Answer

A)   rises by $8 when his wage rises by $8 per hour.
B)   falls by $8 when his wage rises by $8 per hour.
C)   is the same for a celebrity talk-show host as it is for a teacher.
D)   is determined by factors that are unrelated to his hourly wage.E) B) and C)
F) All of the above

Question 14

The marginal product of land depends on the quantity of land that is available.

Accepted Answer

A) True 
 B)False

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

Question 16

Along the horizontal axis of the production function we typically measure

Accepted Answer

A)   revenue.
B)   the marginal product of the input.
C)   the quantity of input.
D)   the quantity of output.E) A) and B)
F) A) and C)

Question 17

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

Question 18

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. Suppose the firm sells each box of envelopes that it produces for $6. What is the value of the marginal product of the second worker?

Accepted Answer

A)   $1,440
B)   $1,212
C)   $636
D)   $552E) All of the above
F) B) and D)

Question 19

The purchase price of capital is

Accepted Answer

A)   the value of the capital to the firm.
B)   always less than the rental price.
C)   the price received from the flow of some capital services.
D)   the price a person pays to own that factor of production indefinitely.E) None of the above
F) B) and C)

Question 20

Figure 18-10 
-Refer to Figure 18-10. When the relevant labor demand curve is D1 and the labor market is in equilibrium,

Accepted Answer

A)   the value of the marginal product of labor to firms is less than W1.
B)   the opportunity cost of leisure to workers is greater than W1.
C)   the wage is W1.
D)   All of the above are correct.E) A) and B)
F) C) and D)

Exam 18: The Markets for the Factors of Production

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

The purchase price of capital is

Correct Answer
verified

Correct Answer
verified

For a worker, the opportunity cost of an hour of leisure

Correct Answer
verified

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 decrease, what happens in the market for bread bakers?

Correct Answer
verified

Using the theory of wage determination, explain why wages in developing countries, where levels of capital are small, are typically quite low.

Correct Answer
verified
Wages are determined by the value of wor...
View Answer

Along the horizontal axis of the production function we typically measure

Correct Answer
verified

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

Table 18-7 -Refer to Table 18-7. What is the value of the cell labeled JJ?

Correct Answer
verified

The marginal product of labor is defined as the change in

Correct Answer
verified

Correct Answer
verified

Over time, there have been technological advances in the production of radios. At the same time, it has become less popular to listen to radio. Taking these two events into account, what would be the likely effect on the wages of workers who manufacture radios?

Correct Answer
verified
The technological advances have the effe...
View Answer

An upward-sloping labor-supply curve implies that an increase in the wage induces

Correct Answer
verified

Figure 18-10 -Refer to Figure 18-10. When the relevant labor demand curve is D1 and the labor market is in equilibrium,

Correct Answer
verified

The marginal product of land depends on the quantity of land that is available.

Correct Answer
verified

Table 18-7 -Refer to Table 18-7. It is apparent from this table that increasing marginal product

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

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

If the demand for labor decreases and the supply of labor is unchanged, then the opportunity cost of leisure will decrease.

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

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

The purchase price of capital is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For a worker, the opportunity cost of an hour of leisure

Correct AnswerverifiedShow Answer

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 decrease, what happens in the market for bread bakers?

Correct AnswerverifiedShow Answer

Using the theory of wage determination, explain why wages in developing countries, where levels of capital are small, are typically quite low.

Correct AnswerverifiedWages are determined by the value of wor...View AnswerShow Answer

Along the horizontal axis of the production function we typically measure

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 AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. What is the value of the cell labeled JJ?

Correct AnswerverifiedShow Answer

The marginal product of labor is defined as the change in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Over time, there have been technological advances in the production of radios. At the same time, it has become less popular to listen to radio. Taking these two events into account, what would be the likely effect on the wages of workers who manufacture radios?

Correct AnswerverifiedThe technological advances have the effe...View AnswerShow Answer

An upward-sloping labor-supply curve implies that an increase in the wage induces

Correct AnswerverifiedShow Answer

Figure 18-10 -Refer to Figure 18-10. When the relevant labor demand curve is D1 and the labor market is in equilibrium,

Correct AnswerverifiedShow Answer

The marginal product of land depends on the quantity of land that is available.

Correct AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. It is apparent from this table that increasing marginal product

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

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

If the demand for labor decreases and the supply of labor is unchanged, then the opportunity cost of leisure will decrease.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Wages are determined by the value of wor...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The technological advances have the effe...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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