Question 1

Economists refer to the inputs that firms use to produce goods and services as

Accepted Answer

A)   derived factors.
B)   derived resources.
C)   factors of production.
D)   instruments of revenue.E) B) and C)
F) A) and C)

Question 2

We observe a profit-maximizing firm hiring its 75th employee. It is possible to infer that, when 74 employees are hired, the

Accepted Answer

A)   wage exceeds the value of the marginal product of labor.
B)   value of the marginal product of labor exceeds the wage.
C)   marginal product of labor is increasing.
D)   firm is attempting to increase its market share.E) All of the above
F) B) and C)

Question 3

The labor supply curve reflects how workers' decisions about the labor-leisure tradeoff respond to changes in the opportunity cost of leisure.

Accepted Answer

A) True 
 B)False

Question 4

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 $12 per unit, and it pays each of its workers $700 per week. How many workers will the firm hire to maximize its profit?

Accepted Answer

A)   2
B)   3
C)   4
D)   5E) B) and C)
F) A) and D)

Question 5

Figure 18-2
The figure below shows the production function for a particular firm. 
-Refer to Figure 18-2. The marginal product of the fourth worker is

Accepted Answer

A)   100 units.
B)   25 units.
C)   20 units.
D)   10 units.E) None of the above
F) C) and D)

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 B)
F) A) and D)

Question 7

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) B) and C)

Question 8

For maximum profit, a firm hires labor up to the point at which the wage equals (i)  the value of the marginal product of labor.
(ii)  the marginal cost of an additional unit of output.
(iii)  output price multiplied by the marginal product of labor.

Accepted Answer

A)   (i)  and (ii)  only
B)   (i)  and (iii)  only
C)   (ii)  and (iii)  only
D)   (i) , (ii) , and (iii) E) B) and C)
F) All of the above

Question 9

In 2012, the total income of all U.S. residents was about

Accepted Answer

A)   $10 billion.
B)   $15 billion.
C)   $10 trillion.
D)   $15 trillion.E) A) and B)
F) A) and C)

Question 10

Table 18-7
 
-Refer to Table 18-7. To maximize its profit, the firm will hire workers as long as the value of the marginal product of labor equals or exceeds

Accepted Answer

A)   $100.
B)   $200.
C)   $400.
D)   $500.E) A) and D)
F) None of the above

Question 11

Scenario 18-6
Rocchetta Industries manufactures and supplies bottled water in Mexico. As a result of a contamination of water supplies at many of Mexico's resort communities, the demand for bottled water has increased.
-Refer to Scenario 18-6. We would expect that, as a result of the contamination, the value of the marginal product for Rocchetta Industries' workers would

Accepted Answer

A)   be offset by a decrease in wages.
B)   be unaffected by a rise in demand for bottled water.
C)   increase.
D)   decrease.E) A) and C)
F) All of the above

Question 12

Figure 18-7 
-Refer to Figure 18-7. Which of the following would shift the labor supply curve from S1 to S2?

Accepted Answer

A)   a change in workers' attitudes toward the work-leisure tradeoff
B)   decreases in wages in other labor markets
C)   immigration of workers into the region or country
D)   All of the above are correct.E) A) and B)
F) A) and D)

Question 13

According to the neoclassical theory of distribution, the wages paid to workers

Accepted Answer

A)   reflect the market prices of the goods those workers produce.
B)   reflect the degree of market power held by the firms that pay those wages.
C)   fail to reflect those workers' opportunity costs of leisure.
D)   are unrelated to the forces of supply and demand.E) A) and B)
F) A) and C)

Question 14

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

Accepted Answer

A)   The labor supply will stay unchanged until the wages paid to pear pickers change.
B)   The labor supply will decrease.
C)   The labor supply will increase.
D)   The labor supply may fall or rise, depending on the price of pears.E) A) and C)
F) C) and D)

Question 15

Suppose that the market for labor is initially in equilibrium. A decrease in the price of output will cause the equilibrium wage

Accepted Answer

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

Question 16

The distinction between purchase price and rental price applies to which factor(s)  of production?

Accepted Answer

A)   land only
B)   capital only
C)   land and capital only
D)   land, capital, and laborE) A) and B)
F) C) and D)

Question 17

If the demand curve for economics textbooks shifts to the left, then the value of the marginal product of labor for economics textbook authors will

Accepted Answer

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

Question 18

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 third worker?

Accepted Answer

A)   220 students
B)   73.33 students
C)   50 students
D)   30 studentsE) A) and D)
F) All of the above

Question 19

The value of the marginal product of labor is calculated by multiplying the

Accepted Answer

A)   price of output by the quantity of labor.
B)   price of output by the marginal product of labor.
C)   wage by the quantity of labor.
D)   wage by the marginal product of labor.E) B) and D)
F) A) and B)

Question 20

Figure 18-4
The graph below illustrates the market for nurses who work in doctors' offices. 
-Refer to Figure 18-4. If doctors' offices adopt new labor­saving technologies, what happens in the market for nurses?

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) None of the above
F) All of the above

Exam 18: The Markets for the Factors of Production

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. The marginal product of the fourth worker is

Correct Answer
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We observe a profit-maximizing firm hiring its 75th employee. It is possible to infer that, when 74 employees are hired, the

Correct Answer
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For maximum profit, a firm hires labor up to the point at which the wage equals (i) the value of the marginal product of labor. (ii) the marginal cost of an additional unit of output. (iii) output price multiplied by the marginal product of labor.

Correct Answer
verified

Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -Refer to Figure 18-4. If doctors' offices adopt new laborsaving technologies, what happens in the market for nurses?

Correct Answer
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In 2012, the total income of all U.S. residents was about

Correct Answer
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Suppose that the market for labor is initially in equilibrium. A decrease in the price of output will cause the equilibrium wage

Correct Answer
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Table 18-7 -Refer to Table 18-7. To maximize its profit, the firm will hire workers as long as the value of the marginal product of labor equals or exceeds

Correct Answer
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The labor supply curve reflects how workers' decisions about the labor-leisure tradeoff respond to changes in the opportunity cost of leisure.

Correct Answer
verified

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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Figure 18-7 -Refer to Figure 18-7. Which of the following would shift the labor supply curve from S1 to S2?

Correct Answer
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According to the neoclassical theory of distribution, the wages paid to workers

Correct Answer
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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 third worker?

Correct Answer
verified

If the demand curve for economics textbooks shifts to the left, then the value of the marginal product of labor for economics textbook authors will

Correct Answer
verified

Correct Answer
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Economists refer to the inputs that firms use to produce goods and services as

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 $12 per unit, and it pays each of its workers $700 per week. How many workers will the firm hire to maximize its profit?

Correct Answer
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The distinction between purchase price and rental price applies to which factor(s) of production?

Correct Answer
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What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

Correct Answer
verified

The marginal product of labor is defined as the change in

Correct Answer
verified

The value of the marginal product of labor is calculated by multiplying the

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. The marginal product of the fourth worker is

Correct AnswerverifiedShow Answer

We observe a profit-maximizing firm hiring its 75th employee. It is possible to infer that, when 74 employees are hired, the

Correct AnswerverifiedShow Answer

For maximum profit, a firm hires labor up to the point at which the wage equals (i) the value of the marginal product of labor. (ii) the marginal cost of an additional unit of output. (iii) output price multiplied by the marginal product of labor.

Correct AnswerverifiedShow Answer

Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -Refer to Figure 18-4. If doctors' offices adopt new labor­saving technologies, what happens in the market for nurses?

Correct AnswerverifiedShow Answer

In 2012, the total income of all U.S. residents was about

Correct AnswerverifiedShow Answer

Suppose that the market for labor is initially in equilibrium. A decrease in the price of output will cause the equilibrium wage

Correct AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. To maximize its profit, the firm will hire workers as long as the value of the marginal product of labor equals or exceeds

Correct AnswerverifiedShow Answer

The labor supply curve reflects how workers' decisions about the labor-leisure tradeoff respond to changes in the opportunity cost of leisure.

Correct AnswerverifiedShow Answer

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

Figure 18-7 -Refer to Figure 18-7. Which of the following would shift the labor supply curve from S1 to S2?

Correct AnswerverifiedShow Answer

According to the neoclassical theory of distribution, the wages paid to workers

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the demand curve for economics textbooks shifts to the left, then the value of the marginal product of labor for economics textbook authors will

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economists refer to the inputs that firms use to produce goods and services as

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 $12 per unit, and it pays each of its workers $700 per week. How many workers will the firm hire to maximize its profit?

Correct AnswerverifiedShow Answer

The distinction between purchase price and rental price applies to which factor(s) of production?

Correct AnswerverifiedShow Answer

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

Correct AnswerverifiedShow Answer

The marginal product of labor is defined as the change in

Correct AnswerverifiedShow Answer

The value of the marginal product of labor is calculated by multiplying the

Correct AnswerverifiedShow Answer

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Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -Refer to Figure 18-4. If doctors' offices adopt new laborsaving technologies, what happens in the market for nurses?

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