Question 1

Suppose the wage earned by pear pickers suddenly rises. Which of the following effects would we most likely observe as a result?

Accepted Answer

A)  The supply of apple pickers would decrease and the equilibrium wage of apple pickers would decrease.
B)  The supply of apple pickers would decrease and the equilibrium wage of apple pickers would increase.
C)  The demand for apple pickers would increase and the equilibrium wage of apple pickers would decrease.
D)  The demand for apple pickers would decrease and the equilibrium wage of apple pickers would decrease.E) C) and D)
F) B) and C)

Question 2

Scenario 18-2
Gertrude Kelp owns three boats that participate in commercial fishing for fresh Pacific salmon off the coast of Alaska. As part of her business she hires a captain and several crew members for each boat. In the market for fresh Pacific salmon, there are thousands of firms like Gertrude's. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market.
-Refer to Scenario 18-2. Based on the given information, it is likely that Gertrude's firm has

Accepted Answer

A)  some influence over the wages paid to crew members but no influence over the price of salmon.
B)  some influence over the price of salmon but no influence over the wages paid to crew members.
C)  some influence over both the price of salmon and the wages paid to crew members.
D)  no influence over either the price of salmon or the wages paid to crew members.E) None of the above
F) A) and D)

Question 3

Suppose medical research provides evidence that eating bananas provides far greater health benefits than was previously thought. The resulting increase in the demand for bananas

Accepted Answer

A)  increases the marginal product of banana pickers for any given number of banana pickers.
B)  increases the value of the marginal product of banana pickers for any given number of banana pickers.
C)  increases the supply of banana pickers.
D)  All of the above are correct.E) C) and D)
F) A) and B)

Question 4

Table 18-7 
-Refer to Table 18-7. The fact that the marginal product falls as the number of workers increases illustrates a property called

Accepted Answer

A)  diminishing marginal product.
B)  utility maximization.
C)  supply and demand.
D)  labor theory.E) A) and B)
F) None of the above

Question 5

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

Accepted Answer

A)  inflation and unemployment
B)  prosperity and wages
C)  time and leisure
D)  labor and leisureE) None of the above
F) All of the above

Question 6

Consider the market for capital equipment. Suppose the market price of firms' output decreases. Holding all else constant, the equilibrium quantity of capital equipment will

Accepted Answer

A)  increase.
B)  decrease.
C)  not change.
D)  It is not possible to determine what will happen to the equilibrium quantity of capital equipment.E) B) and C)
F) C) and D)

Question 7

Labor-saving technology causes which of the following?
(i) The marginal productivity of labor increases.
(ii) The marginal productivity of labor decreases.
(iii) Labor demand shifts to the right.
(iv) Labor demand shifts to the left.

Accepted Answer

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

Question 8

Which of the following would be an example of capital for a computer software firm?
(i) the firm's computer programmers
(ii) the wages the firm pays to its computer programmers
(iii) computer equipment

Accepted Answer

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

Question 9

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 fourth worker?

Accepted Answer

A)  $200
B)  $1,000
C)  $6,400
D)  $32,000E) A) and C)
F) A) and B)

Question 10

Figure 18-3 
-Refer to Figure 18-3. What is the marginal product of the third worker?

Accepted Answer

A)  2 units
B)  4 units
C)  4.67 units
D)  14 unitsE) B) and C)
F) A) and B)

Question 11

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

Question 12

Which of the following statements is correct?

Accepted Answer

A)  The market for capital is unlike the market for labor because the rental price of capital is unaffected by the marginal product of capital, whereas the price of labor is affected by the marginal product of labor.
B)  The market for capital is unlike the market for labor because the purchase price of capital is unaffected by the marginal product of capital, whereas the price of labor is affected by the marginal product of labor.
C)  The market for capital is like the market for labor because the rental price of capital is affected by the marginal product of capital, and the price of labor is affected by the marginal product of labor.
D)  Both a and b are correct.E) B) and D)
F) B) and C)

Question 13

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

Question 14

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. What is the value of the marginal product of the third worker?

Accepted Answer

A)  $125
B)  $375
C)  $450
D)  $1,425E) A) and D)
F) A) and C)

Question 15

Capital income does not include income paid to households for the use of their capital.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following would increase the demand for labor?
(i) a decrease in the output price
(ii) an increase in the output price
(iii) a labor-saving technological advance
(iv) a labor-augmenting technological advance

Accepted Answer

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

Question 17

Figure 18-7 1 to S2? 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." class="answers-bank-image d-inline" rel="preload" >
-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 C)

Question 18

Suppose Cassie's Candles is a profit-maximizing competitive firm. Cassie sells hand-made candles for $10 each. She will pay an hourly wage of $20 so long as the marginal productivity of a worker equals or exceeds two candles per hour.

Accepted Answer

A) True 
 B)False

Question 19

The inputs used to produce goods and services are called

Accepted Answer

A)  profit factors.
B)  marginal products.
C)  labor demands.
D)  factors of production.E) All of the above
F) A) and C)

Question 20

Consider the market for capital equipment. Suppose the value of the marginal product of capital equipment increases. Holding all else constant, the equilibrium rental price of capital equipment will

Accepted Answer

A)  increase.
B)  decrease.
C)  not change.
D)  It is not possible to determine what will happen to the equilibrium rental price of capital equipment.E) A) and B)
F) B) and C)

Exam 18: The Markets for the Factors of Production

The inputs used to produce goods and services are called

Correct Answer
verified

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. What is the value of the marginal product of the third worker?

Correct Answer
verified

Consider the market for capital equipment. Suppose the market price of firms' output decreases. Holding all else constant, the equilibrium quantity of capital equipment will

Correct Answer
verified

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

Correct Answer
verified

Which of the following would be an example of capital for a computer software firm? (i) the firm's computer programmers (ii) the wages the firm pays to its computer programmers (iii) computer equipment

Correct Answer
verified

Table 18-7 -Refer to Table 18-7. The fact that the marginal product falls as the number of workers increases illustrates a property called

Correct Answer
verified

Suppose the wage earned by pear pickers suddenly rises. Which of the following effects would we most likely observe as a result?

Correct Answer
verified

Labor-saving technology causes which of the following? (i) The marginal productivity of labor increases. (ii) The marginal productivity of labor decreases. (iii) Labor demand shifts to the right. (iv) Labor demand shifts to the left.

Correct Answer
verified

Correct Answer
verified

Figure 18-3 -Refer to Figure 18-3. What is the marginal product of the third worker?

Correct Answer
verified

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

Correct Answer
verified

Which of the following would increase the demand for labor? (i) a decrease in the output price (ii) an increase in the output price (iii) a labor-saving technological advance (iv) a labor-augmenting technological advance

Correct Answer
verified

Suppose medical research provides evidence that eating bananas provides far greater health benefits than was previously thought. The resulting increase in the demand for bananas

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

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

Consider the market for capital equipment. Suppose the value of the marginal product of capital equipment increases. Holding all else constant, the equilibrium rental price of capital equipment will

Correct Answer
verified

Suppose Cassie's Candles is a profit-maximizing competitive firm. Cassie sells hand-made candles for $10 each. She will pay an hourly wage of $20 so long as the marginal productivity of a worker equals or exceeds two candles per hour.

Correct Answer
verified

Correct Answer
verified

Capital income does not include income paid to households for the use of their capital.

Correct Answer
verified

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

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

The inputs used to produce goods and services are called

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. What is the value of the marginal product of the third worker?

Correct AnswerverifiedShow Answer

Consider the market for capital equipment. Suppose the market price of firms' output decreases. Holding all else constant, the equilibrium quantity of capital equipment will

Correct AnswerverifiedShow Answer

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

Correct AnswerverifiedShow Answer

Which of the following would be an example of capital for a computer software firm? (i) the firm's computer programmers (ii) the wages the firm pays to its computer programmers (iii) computer equipment

Correct AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. The fact that the marginal product falls as the number of workers increases illustrates a property called

Correct AnswerverifiedShow Answer

Suppose the wage earned by pear pickers suddenly rises. Which of the following effects would we most likely observe as a result?

Correct AnswerverifiedShow Answer

Labor-saving technology causes which of the following? (i) The marginal productivity of labor increases. (ii) The marginal productivity of labor decreases. (iii) Labor demand shifts to the right. (iv) Labor demand shifts to the left.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 18-3 -Refer to Figure 18-3. What is the marginal product of the third worker?

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

Which of the following would increase the demand for labor? (i) a decrease in the output price (ii) an increase in the output price (iii) a labor-saving technological advance (iv) a labor-augmenting technological advance

Correct AnswerverifiedShow Answer

Suppose medical research provides evidence that eating bananas provides far greater health benefits than was previously thought. The resulting increase in the demand for bananas

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

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

Consider the market for capital equipment. Suppose the value of the marginal product of capital equipment increases. Holding all else constant, the equilibrium rental price of capital equipment will

Correct AnswerverifiedShow Answer

Suppose Cassie's Candles is a profit-maximizing competitive firm. Cassie sells hand-made candles for $10 each. She will pay an hourly wage of $20 so long as the marginal productivity of a worker equals or exceeds two candles per hour.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Capital income does not include income paid to households for the use of their capital.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow 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

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

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