Question 1

A significant slowdown in the growth of productivity persisted in the U.S. economy between

Accepted Answer

A)  1960 and 1973.
B)  1973 and 1995.
C)  1973 and 2015.
D)  1995 and 2015.E) C) and D)
F) A) and C)

Question 2

As a result of a fire, a small business owner loses some of her computers and other equipment. If the property of diminishing returns applies to all factors of production, she should expect to see

Accepted Answer

A)  an increase in the marginal productivity of her remaining capital and an increase in the marginal productivity of her labor.
B)  an increase in the marginal productivity of her remaining capital and a decrease in the marginal productivity of her labor.
C)  a decrease in the marginal productivity of her remaining capital and an increase in the marginal productivity of her labor.
D)  a decrease in the marginal productivity of her remaining capital and a decrease in the marginal productivity of her labor.E) None of the above
F) A) and C)

Question 3

The labor supply curve shifts when

Accepted Answer

A)  employers need to hire more people.
B)  employers develop new technology.
C)  workers change the number of hours that they want to work at any given wage.
D)  workers become more productive.E) B) and C)
F) A) and B)

Question 4

Figure 18-10 1 = $20 and W2 = $22, and the market is always in equilibrium. A shift of the labor demand curve from D1 to D2 would A) increase the value of the marginal product of labor by $2. B) increase the value of the marginal product of labor by less than $2. C) decrease the value of the marginal product of labor by more than $2. D) not change the value of the marginal product of labor." class="answers-bank-image d-inline" rel="preload" >
-\Refer to Figure 18-10. Assume W1 = $20 and W2 = $22, and the market is always in equilibrium. A shift of the labor demand curve from D1 to D2 would

Accepted Answer

A)  increase the value of the marginal product of labor by $2.
B)  increase the value of the marginal product of labor by less than $2.
C)  decrease the value of the marginal product of labor by more than $2.
D)  not change the value of the marginal product of labor.E) B) and C)
F) C) and D)

Question 5

Value of marginal product is defined as the additional

Accepted Answer

A)  output a firm would receive after hiring one more factor of production.
B)  cost of hiring one more factor of production.
C)  revenue earned from selling one more unit of product.
D)  revenue earned from hiring one more factor of production.E) A) and B)
F) All of the above

Question 6

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) B) and D)

Question 7

Consider the labor market for short-order cooks. An increase in the wages paid to fast-food workers will cause

Accepted Answer

A)  both equilibrium wages and equilibrium employment to increase in the market for short-order cooks.
B)  both equilibrium wages and equilibrium employment to decrease in the market for short-order cooks.
C)  equilibrium wages to increase and equilibrium employment to decrease in the market for short-order cooks.
D)  equilibrium wages to decrease and equilibrium employment to increase in the market for short-order cooks.E) B) and D)
F) A) and D)

Question 8

Which of the following is not an example of a factor of production?

Accepted Answer

A)  labor
B)  interest
C)  land
D)  capitalE) A) and C)
F) A) and B)

Question 9

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

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. Suppose that there is a technological advance that allows MadeFromScratch employees to produce more cupcakes than they could before. Because of this change, the firm's

Accepted Answer

A)  demand for labor shifts right.
B)  demand for labor shifts left.
C)  supply of labor shifts right.
D)  supply of labor shifts left.E) A) and B)
F) B) and C)

Question 11

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) A) and C)

Question 12

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

Question 13

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-B. 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) All of the above
F) None of the above

Question 14

Table 18-8
Harold and Maude own a dance studio where they and their employees teach ballroom dancing. Their company is a competitive, profit-maximizing firm. Harold and Maude's production function is detailed in the table below. 
-Refer to Table 18-8. What is the marginal product of the fourth worker?

Accepted Answer

A)  250 students
B)  62.5 students
C)  50 students
D)  30 studentsE) B) and C)
F) A) and B)

Question 15

Increases in productivity are not responsible for increased standards of living in the United States.

Accepted Answer

A) True 
 B)False

Question 16

Suppose the supply of capital decreases. As a result, the quantity of capital used in production and the rental price of capital will both fall.

Accepted Answer

A) True 
 B)False

Question 17

Figure 18-11 
-Refer to Figure 18-11. Suppose the intersection of the supply and demand curves matches with a value of $200 on the vertical axis. Then

Accepted Answer

A)  the marginal product of capital is 200.
B)  the value of the marginal product of capital is $200.
C)  a unit of capital can be purchased for $200.
D)  each worker in markets that produce capital goods earns a wage of $200.E) A) and B)
F) A) and C)

Question 18

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 second worker?

Accepted Answer

A)  $4
B)  $5
C)  $80
D)  $240E) B) and D)
F) A) and C)

Question 19

Suppose that technological progress increases the productivity of teachers. Which of the following accurately describes the labor market for teachers after the technological change? Equilibrium wages will

Accepted Answer

A)  rise, and the equilibrium quantity of teachers employed will fall.
B)  rise, and the equilibrium quantity of teachers employed will rise.
C)  fall, and the equilibrium quantity of teachers employed will fall.
D)  fall, and the equilibrium quantity of teachers employed will rise.E) A) and B)
F) None of the above

Question 20

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. Based on the shape of the curve, the
(i) total product is increasing.
(ii) total product is decreasing.
(iii) marginal product is increasing.
(iv) marginal product is decreasing.

Accepted Answer

A)  (i)  only
B)  (i)  and (iii)  only
C)  (i)  and (iv)  only
D)  (ii)  and (iv)  onlyE) B) and C)
F) A) and D)

Exam 18: The Markets for the Factors of Production

Figure 18-11 -Refer to Figure 18-11. Suppose the intersection of the supply and demand curves matches with a value of $200 on the vertical axis. Then

Correct Answer
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As a result of a fire, a small business owner loses some of her computers and other equipment. If the property of diminishing returns applies to all factors of production, she should expect to see

Correct Answer
verified

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

Correct Answer
verified

Consider the labor market for short-order cooks. An increase in the wages paid to fast-food workers will cause

Correct Answer
verified

A significant slowdown in the growth of productivity persisted in the U.S. economy between

Correct Answer
verified

Suppose the supply of capital decreases. As a result, the quantity of capital used in production and the rental price of capital will both fall.

Correct Answer
verified

The marginal product of labor is defined as the change in

Correct Answer
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Correct Answer
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Value of marginal product is defined as the additional

Correct Answer
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The labor supply curve shifts when

Correct Answer
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Increases in productivity are not responsible for increased standards of living in the United States.

Correct Answer
verified

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

Correct Answer
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Suppose that technological progress increases the productivity of teachers. Which of the following accurately describes the labor market for teachers after the technological change? Equilibrium wages will

Correct Answer
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Correct Answer
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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-B. The marginal product of labor begins to diminish with the addition of which worker?

Correct Answer
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Correct Answer
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Which of the following is not an example of a factor of production?

Correct Answer
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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 second worker?

Correct Answer
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Exam 18: The Markets for the Factors of Production

Figure 18-11 -Refer to Figure 18-11. Suppose the intersection of the supply and demand curves matches with a value of $200 on the vertical axis. Then

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

As a result of a fire, a small business owner loses some of her computers and other equipment. If the property of diminishing returns applies to all factors of production, she should expect to see

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Consider the labor market for short-order cooks. An increase in the wages paid to fast-food workers will cause

Correct AnswerverifiedShow Answer

A significant slowdown in the growth of productivity persisted in the U.S. economy between

Correct AnswerverifiedShow Answer

Suppose the supply of capital decreases. As a result, the quantity of capital used in production and the rental price of capital will both fall.

Correct AnswerverifiedShow Answer

The marginal product of labor is defined as the change in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Value of marginal product is defined as the additional

Correct AnswerverifiedShow Answer

The labor supply curve shifts when

Correct AnswerverifiedShow Answer

Increases in productivity are not responsible for increased standards of living in the United States.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose that technological progress increases the productivity of teachers. Which of the following accurately describes the labor market for teachers after the technological change? Equilibrium wages will

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not an example of a factor of production?

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Figure 18-10 -\Refer to Figure 18-10. Assume W1 = $20 and W2 = $22, and the market is always in equilibrium. A shift of the labor demand curve from D1 to D2 would

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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 second worker?

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