Question 1

The rental price of capital is

Accepted Answer

A)   determined outside the realm of factor markets.
B)   the price paid to use capital for a limited time period.
C)   the price paid for ownership of the capital.
D)   always more than the purchase price.E) All of the above
F) B) and D)

Question 2

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

Accepted Answer

A)   a decrease in the price of output
B)   an increase in the price of output
C)   a labor-augmenting technological change
D)   better employment opportunities in a closely-related jobE) A) and D)
F) All of the above

Question 3

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

Question 4

Which of the following is an example of a firm's derived demand?

Accepted Answer

A)   Workers with higher levels of education earn more, on average, than workers with lower levels of education.
B)   Factors that decrease the demand for labor will decrease the equilibrium wage.
C)   A tractor manufacturer's demand for assembly­line workers is inseparably linked to the supply of tractors.
D)   All of the above are correct.E) None of the above
F) A) and C)

Question 5

Suppose that the labor market for life guards is initially in equilibrium. Then swimming pool owners adopt a new labor-saving technology that uses computers to monitor the locations of swimmers in the pool. 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 D)
F) None of the above

Question 6

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

Question 7

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 Italian government started to patrol the Adriatic Sea and had a policy of returning all refugees to Albania. This policy would contribute to

Accepted Answer

A)   an increase in the supply of labor in Italy.
B)   an increase in the demand labor in Italy.
C)   a decrease in the demand for labor in Italy.
D)   preventing an increase in the supply of labor in Italy.E) None of the above
F) B) and D)

Question 8

Table 18-7 
-Refer to Table 18-7. What is the value for the cell labeled FF?

Accepted Answer

A)   30
B)   40
C)   100
D)   400E) None of the above
F) All of the above

Question 9

Suppose that the market for labor is initially in equilibrium. An increase in immigration 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 B)
F) A) and C)

Question 10

Typically, as a firm hires additional workers, the marginal product of labor

Accepted Answer

A)   decreases, and the value of the marginal product of labor decreases.
B)   stays constant, and the value of the marginal product of labor decreases.
C)   decreases, and the value of the marginal product of labor stays constant.
D)   decreases, and the value of the marginal product of labor increases.E) All of the above
F) None of the above

Question 11

When a competitive firm maximizes profit, it will hire workers up to the point where the

Accepted Answer

A)   marginal product of labor is equal to the product price.
B)   marginal product of labor is equal to the wage.
C)   value of the marginal product of labor is equal to the product price.
D)   value of the marginal product of labor is equal to the wage.E) A) and C)
F) All of the above

Question 12

Suppose a shift of the labor-demand curve results in an increase of $5 in the equilibrium wage. How does this shift affect the value of the marginal product of labor?

Accepted Answer

The shift must incre...

Question 13

The value of the marginal product of capital can be calculated as the market price of the good multiplied by the marginal product of capital.

Accepted Answer

A) True 
 B)False

Question 14

Roxanne's hourly wage increases from $9 to $13. Which of the following describes a consequence of the increase in Roxanne's wage?

Accepted Answer

A)   The opportunity cost of Roxanne's leisure time has increased.
B)   Roxanne may choose to work fewer hours due to the increase in her wage.
C)   If Roxanne's labor supply curve is upward sloping, she will choose to work fewer hours.
D)   Both a and b are correct.E) None of the above
F) A) and B)

Question 15

Table 18-11
Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $2 each and pays the workers a wage of $325 per day. 
-Refer to Table 18-11. What is the sixth worker's marginal product of labor?

Accepted Answer

A)   100 cupcakes
B)   120 cupcakes
C)   140 cupcakes
D)   160 cupcakesE) A) and B)
F) A) and C)

Question 16

Immigration is an important

Accepted Answer

A)   explanation for the failure of firms to operate on their labor-demand curves.
B)   explanation for the failure of firms to operate on their output-supply curves.
C)   source of shifts in labor demand.
D)   source of shifts in labor supply.E) A) and D)
F) A) and B)

Question 17

When an individual's income goes up, that individual may choose to supply less labor, resulting in a backward­sloping labor supply curve.

Accepted Answer

A) True 
 B)False

Question 18

Figure 18-9 
-Refer to Figure 18-9. If the marginal product of labor falls and the price of apples remains unchanged,

Accepted Answer

A)   (i)  and (ii)  only
B)   (ii)  and (iii)  only
C)   (i)  and (iii)  only
D)   (i) , (ii) , and (iii) E) A) and C)
F) C) and D)

Question 19

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 hires each unit of labor for $600 per week, and each unit of output sells for $9. What is the value of the marginal product of the third worker?

Accepted Answer

A)   $540
B)   $600
C)   $675
D)   $810E) B) and C)
F) A) and C)

Question 20

Table 18-2 
-Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week by various numbers of workers. If the price per bracelet in a perfectly competitive product market is $5, how many workers would the firm employ if the weekly wage rate is $375?

Accepted Answer

A)   1
B)   2
C)   3
D)   4E) B) and C)
F) All of the above

Exam 18: The Markets for the Factors of Production

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

Correct Answer
verified

Typically, as a firm hires additional workers, the marginal product of labor

Correct Answer
verified

Suppose that the labor market for life guards is initially in equilibrium. Then swimming pool owners adopt a new labor-saving technology that uses computers to monitor the locations of swimmers in the pool. What happens to the equilibrium wage and quantity of life guards?

Correct Answer
verified

When a competitive firm maximizes profit, it will hire workers up to the point where the

Correct Answer
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Table 18-7 -Refer to Table 18-7. What is the value for the cell labeled FF?

Correct Answer
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The rental price of capital is

Correct Answer
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Table 18-11 Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $2 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the sixth worker's marginal product of labor?

Correct Answer
verified

When an individual's income goes up, that individual may choose to supply less labor, resulting in a backwardsloping labor supply curve.

Correct Answer
verified

Suppose that the market for labor is initially in equilibrium. An increase in immigration will cause the equilibrium wage

Correct Answer
verified

Correct Answer
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Immigration is an important

Correct Answer
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Table 18-2 -Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week by various numbers of workers. If the price per bracelet in a perfectly competitive product market is $5, how many workers would the firm employ if the weekly wage rate is $375?

Correct Answer
verified

Roxanne's hourly wage increases from $9 to $13. Which of the following describes a consequence of the increase in Roxanne's wage?

Correct Answer
verified

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 hires each unit of labor for $600 per week, and each unit of output sells for $9. What is the value of the marginal product of the third worker?

Correct Answer
verified

The value of the marginal product of capital can be calculated as the market price of the good multiplied by the marginal product of capital.

Correct Answer
verified

Suppose a shift of the labor-demand curve results in an increase of $5 in the equilibrium wage. How does this shift affect the value of the marginal product of labor?

Correct Answer
verified
The shift must incre...
View 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 Answer
verified

Which of the following is an example of a firm's derived demand?

Correct Answer
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Figure 18-9 -Refer to Figure 18-9. If the marginal product of labor falls and the price of apples remains unchanged,

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

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

Correct AnswerverifiedShow Answer

Typically, as a firm hires additional workers, the marginal product of labor

Correct AnswerverifiedShow Answer

Suppose that the labor market for life guards is initially in equilibrium. Then swimming pool owners adopt a new labor-saving technology that uses computers to monitor the locations of swimmers in the pool. What happens to the equilibrium wage and quantity of life guards?

Correct AnswerverifiedShow Answer

When a competitive firm maximizes profit, it will hire workers up to the point where the

Correct AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. What is the value for the cell labeled FF?

Correct AnswerverifiedShow Answer

The rental price of capital is

Correct AnswerverifiedShow Answer

Table 18-11 Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $2 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the sixth worker's marginal product of labor?

Correct AnswerverifiedShow Answer

When an individual's income goes up, that individual may choose to supply less labor, resulting in a backward­sloping labor supply curve.

Correct AnswerverifiedShow Answer

Suppose that the market for labor is initially in equilibrium. An increase in immigration will cause the equilibrium wage

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Immigration is an important

Correct AnswerverifiedShow Answer

Table 18-2 -Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week by various numbers of workers. If the price per bracelet in a perfectly competitive product market is $5, how many workers would the firm employ if the weekly wage rate is $375?

Correct AnswerverifiedShow Answer

Roxanne's hourly wage increases from $9 to $13. Which of the following describes a consequence of the increase in Roxanne's wage?

Correct AnswerverifiedShow Answer

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 hires each unit of labor for $600 per week, and each unit of output sells for $9. What is the value of the marginal product of the third worker?

Correct AnswerverifiedShow Answer

The value of the marginal product of capital can be calculated as the market price of the good multiplied by the marginal product of capital.

Correct AnswerverifiedShow Answer

Suppose a shift of the labor-demand curve results in an increase of $5 in the equilibrium wage. How does this shift affect the value of the marginal product of labor?

Correct AnswerverifiedThe shift must incre...View AnswerShow 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

Which of the following is an example of a firm's derived demand?

Correct AnswerverifiedShow Answer

Figure 18-9 -Refer to Figure 18-9. If the marginal product of labor falls and the price of apples remains unchanged,

Correct AnswerverifiedShow Answer

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When an individual's income goes up, that individual may choose to supply less labor, resulting in a backwardsloping labor supply curve.

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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The shift must incre...
View Answer

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Correct Answer
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Correct Answer
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