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Exam 18: The Markets for the Factors of Production

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Question 231

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What causes the labor demand curve to shift? (i) changes in productivity (ii) changes in wages (iii) changes in output prices

A) (i) and (ii)
B) (ii) and (iii)
C) (i) and (iii)
D) All of the above are correct.

E) B) and D)
F) All of the above

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Question 232

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Dan owns one of the many bakeries in New York City. Which of the following events will lead to an increase in Dan's demand for the services of bakers? (i) The price of muffins increases. (Muffins are Dan's specialty.) (ii) Dan adds three new ovens to the kitchen area to help the bakers work faster. (iii) Local bakers form a union to protect themselves from low wages.

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) B) and D)

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Question 233

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When labor is the only input a firm uses, the marginal cost of a unit of output can be defined as the

Explain how a firm values the contribution of workers to its profitability. Would a profit-maximizing competitive firm ever stop increasing employment as long as marginal product is rising? Explain your answer.

Which of the following qualify as part of our economy's capital income?

Consider the market for university economics professors. Suppose the opportunity cost of going to graduate school to get a Ph.D. in economics increases for many individuals. Suppose it generally takes about five years to get a Ph.D. in economics. Holding all else constant, in five years the equilibrium wage for university economics professors will

A competitive, profit-maximizing pays its workers a wage of $200 per day and it sells its output for $10 per unit. Determine the marginal product, on a daily basis, of the last worker hired.

The labor-supply curve is affected by the trade-off between labor and leisure.

Figure 18-10 -Refer to Figure 18-10. If the relevant labor demand curve is D₂ and the current wage is W₁,

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers increase, what happens in the market for bread bakers?

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 $10, how many workers would the firm employ if the weekly wage rate is $375?

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 labor-saving technologies, what happens in the market for nurses?

Competitive firms that maximize profits will hire workers until the value of the marginal product of labor

If the selling price of a bushel of cranberries rises, we would expect the demand for labor in the cranberry industry to

Which of the following could increase the labor-supply curve for computer-repair technicians?

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school increases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium wage for doctors will

Factor markets are different from product markets in an important way because

Figure 18-8 This figure below shows the labor market for automobile workers. The curve labeled S is the labor supply curve, and the curves labeled D₁ and D₂ are the labor demand curves. On the horizontal axis, L represents the quantity of labor in the market. -Refer to Figure 18-8. What is measured along the vertical axis on the graph?

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

Because of diminishing returns, a factor in relatively low supply has a