Question 1

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 $10 per unit,and it pays each of its workers $400 per week.When the number of workers increases from 4 to 5,the

Accepted Answer

A)   marginal revenue is $450 per unit of output,and the marginal cost is $400 per unit of output.
B)   value of the marginal product of labor is $3,900,and the marginal cost per unit of output is $400.
C)   value of the marginal product of labor is $450,and the marginal cost per unit of output is about $8.89.
D)   firm's profit increases.E) A) and B)
F) None of the above

Question 2

Rent,interest,and profit are all forms of income paid to the owners of

Accepted Answer

A)   aggregate stock.
B)   aggregate demand.
C)   firms and not-for-profit organizations.
D)   land and capital.E) A) and D)
F) C) and D)

Question 3

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,the equilibrium quantity of health care employees would

Accepted Answer

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

Question 4

Economic theory predicts a close relationship between productivity and real wages.Does history confirm this relationship?

Accepted Answer

Yes.Data f...

Question 5

For a competitive,profit-maximizing firm,the labor demand curve is the same as the

Accepted Answer

A)   marginal cost curve.
B)   value of marginal product curve.
C)   production function.
D)   profit function.E) A) and C)
F) B) and C)

Question 6

A change in the supply of one factor of production

Accepted Answer

A)   will not change either the marginal productivities or the prices of other factors.
B)   will not change the prices of other factors,but it may change their marginal productivities.
C)   will not change the marginal productivities of other factors,but it may change their prices.
D)   changes the marginal productivities and the prices of other factors.E) A) and B)
F) A) and C)

Question 7

The quantity available of one factor of production can affect the marginal product of other factors.

Accepted Answer

A) True 
 B)False

Question 8

The value of the marginal product of labor is equal to the change in

Accepted Answer

A)   marginal cost caused by the addition of the last worker.
B)   total cost caused by the addition of the last worker.
C)   total revenue caused by the addition of the last worker.
D)   total profit caused by the addition of the last worker.E) A) and D)
F) None of the above

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

Question 10

Labor-augmenting technological advances decrease the marginal productivity of labor.

Accepted Answer

A) True 
 B)False

Question 11

If the demand curve for computer games shifts to the left,then the value of the marginal product of labor for computer game authors will

Accepted Answer

A)   rise.
B)   fall.
C)   remain unchanged.
D)   rise or fall;either is possible.E) A) and B)
F) B) and C)

Question 12

Figure 18-5
The figure shows a particular profit-maximizing,competitive firm's value-of-marginal-product (VMP) curve.On the horizontal axis,L represents the number of workers.The time frame is daily. 
-Refer to Figure 18-5.Suppose the marginal product of the fifth unit of labor is 30 units of output per day.The figure implies that the

Accepted Answer

A)   price of output is $4.
B)   price of output is $6.
C)   price of output is $8.
D)   daily wage is $120.E) All of the above
F) A) and B)

Question 13

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.What is the fourth worker's marginal product of labor?

Accepted Answer

A)   120 cookies
B)   140 cookies
C)   160 cookies
D)   180 cookiesE) All of the above
F) C) and D)

Question 14

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

Accepted Answer

A)   landowners in the form of rent.
B)   owners of capital in the form of interest.
C)   households in the form of wages and fringe benefits.
D)   households in the form of welfare,disability,and Social Security payments.E) A) and B)
F) None of the above

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Consider the labor market for computer programmers.During the late 1990s,the value of the marginal product of all computer programmers increased dramatically.Holding all else equal,the equilibrium wage in the labor market for computer programmers

Accepted Answer

A)   increased.
B)   decreased.
C)   did not change.
D)   It is not possible to determine the equilibrium wage.E) B) and C)
F) A) and B)

Question 17

When a competitive firm hires labor up to the point at which the value of the marginal product of labor equals the wage,it also produces output up to the point at which marginal cost is equal to __________.

Accepted Answer

The answer of When a competitive firm hires labor up...

Question 18

Who has a greater opportunity cost of leisure - a president of a major corporation or a babysitter?

Accepted Answer

The opportunity cost...

Question 19

A worker's contribution to a firm's revenue is measured directly by the worker's

Accepted Answer

A)   marginal product.
B)   value of marginal product.
C)   marginal product multiplied by the worker's wage.
D)   value of marginal product multiplied by the output price.E) None of the above
F) A) and D)

Question 20

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

Exam 18: The Market for the Factors of Production

When a competitive firm hires labor up to the point at which the value of the marginal product of labor equals the wage,it also produces output up to the point at which marginal cost is equal to __________.

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 $10 per unit,and it pays each of its workers $400 per week.When the number of workers increases from 4 to 5,the

Correct Answer
verified

Rent,interest,and profit are all forms of income paid to the owners of

Correct Answer
verified

Labor-augmenting technological advances decrease the marginal productivity of labor.

Correct Answer
verified

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

Correct Answer
verified

Consider the labor market for computer programmers.During the late 1990s,the value of the marginal product of all computer programmers increased dramatically.Holding all else equal,the equilibrium wage in the labor market for computer programmers

Correct Answer
verified

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

Correct Answer
verified

For a competitive,profit-maximizing firm,the labor demand curve is the same as the

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.What is the fourth worker's marginal product of labor?

Correct Answer
verified

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

Correct Answer
verified

If the demand curve for computer games shifts to the left,then the value of the marginal product of labor for computer game authors will

Correct Answer
verified

The value of the marginal product of labor is equal to the change in

Correct Answer
verified

A change in the supply of one factor of production

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

The quantity available of one factor of production can affect the marginal product of other factors.

Correct Answer
verified

A worker's contribution to a firm's revenue is measured directly by the worker's

Correct Answer
verified

Who has a greater opportunity cost of leisure - a president of a major corporation or a babysitter?

Correct Answer
verified
The opportunity cost...
View 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,the equilibrium quantity of health care employees would

Correct Answer
verified

Economic theory predicts a close relationship between productivity and real wages.Does history confirm this relationship?

Correct Answer
verified
Yes.Data f...
View Answer

Exam 18: The Market for the Factors of Production

When a competitive firm hires labor up to the point at which the value of the marginal product of labor equals the wage,it also produces output up to the point at which marginal cost is equal to __________.

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 $10 per unit,and it pays each of its workers $400 per week.When the number of workers increases from 4 to 5,the

Correct AnswerverifiedShow Answer

Rent,interest,and profit are all forms of income paid to the owners of

Correct AnswerverifiedShow Answer

Labor-augmenting technological advances decrease the marginal productivity of labor.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Consider the labor market for computer programmers.During the late 1990s,the value of the marginal product of all computer programmers increased dramatically.Holding all else equal,the equilibrium wage in the labor market for computer programmers

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For a competitive,profit-maximizing firm,the labor demand curve is the same as the

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.What is the fourth worker's marginal product of labor?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the demand curve for computer games shifts to the left,then the value of the marginal product of labor for computer game authors will

Correct AnswerverifiedShow Answer

The value of the marginal product of labor is equal to the change in

Correct AnswerverifiedShow Answer

A change in the supply of one factor of production

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The quantity available of one factor of production can affect the marginal product of other factors.

Correct AnswerverifiedShow Answer

A worker's contribution to a firm's revenue is measured directly by the worker's

Correct AnswerverifiedShow Answer

Who has a greater opportunity cost of leisure - a president of a major corporation or a babysitter?

Correct AnswerverifiedThe opportunity cost...View AnswerShow 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,the equilibrium quantity of health care employees would

Correct AnswerverifiedShow Answer

Economic theory predicts a close relationship between productivity and real wages.Does history confirm this relationship?

Correct AnswerverifiedYes.Data f...View AnswerShow 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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The opportunity cost...
View Answer

Correct Answer
verified

Correct Answer
verified
Yes.Data f...
View Answer