Question 1

When labour supply increases, the equilibrium wage rises and employment increases.

Accepted Answer

A) True 
 B)False

Question 2

The demand for apple pickers is derived from the demand for apples.

Accepted Answer

A) True 
 B)False

Question 3

Table 18-2
The production details of a small apple farm are shown below. Suppose the market for both apple and apple pickers is competitive, with a current market price for a box of apples being $10. Further, assume apple pickers are the sole marginal cost faced by the farmer in selling his product.
 
-Refer to Table 18-2. How many workers should the farmer hire to maximise profit?

Accepted Answer

A)   two
B)   three
C)   four
D)   fiveE) B) and C)
F) A) and D)

Question 4

The hiring decision of a profit-maximising firm is directly linked to the:

Accepted Answer

A)   relationship between labour inputs and output described by the production function
B)   value of leisure time to a worker
C)   number of workers available for work
D)   marginal satisfaction that a worker receives from labourE) A) and B)
F) A) and C)

Question 5

When a labour market experiences a surplus of labour, there is downward pressure on:

Accepted Answer

A)   wages
B)   the marginal productivity of labour
C)   final product price
D)   the demand for labourE) B) and D)
F) A) and B) A

Question 6

Table 18-1
  
-Refer to Table 18-1. What is the market price of the final good?

Accepted Answer

A)   $5
B)   $10
C)   $15
D)   $20E) A) and C)
F) B) and C)

Question 7

Jack the physical therapist invents a new wrist-brace that allows assembly line workers to work without suffering the effects of carpal-tunnel syndrome, thus making the workers more productive. The demand for assembly line workers will:

Accepted Answer

A)   fall
B)   rise
C)   remain unchanged
D)   fall as long as price exceeds marginal costE) A) and B)
F) None of the above

Question 8

A competitive, profit-maximising firm labour demand curve is equal to the:

Accepted Answer

A)   the total output curve divided by wages
B)   average level of demand for the final product
C)   the production function
D)   the value of marginal product curveE) None of the above
F) All of the above D

Question 9

When workers are in an industry that is experiencing rapid improvements in technology, they can expect to:

Accepted Answer

A)   see their wages decline
B)   experience wage increases, as their productivity is enhanced
C)   see a reduction in the need for physical capital
D)   see a reduction in demand for final productsE) B) and C)
F) A) and D)

Question 10

The quantity available of one factor of production can affect the marginal product of other factors.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following events would cause an increase in the labour supply curve?

Accepted Answer

A)   a lower retirement age
B)   more married women deciding to work
C)   fewer married men deciding to work
D)   tighter restrictions on immigration policyE) A) and B)
F) A) and C)

Question 12

The equilibrium rental income paid to the owners of capital at any point in time equals the:

Accepted Answer

A)   value of the marginal product of capital
B)   marginal product of capital
C)   purchase price of capital
D)   wage paid to workersE) B) and C)
F) C) and D)

Question 13

Table 18-1
  
-Refer to Table 18-1. If the firm hires three workers, the two workers together produce:

Accepted Answer

A)   25 units
B)   45 units
C)   60 units
D)   75 unitsE) A) and C)
F) B) and C)

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

If one observes a profit-maximising firm decreasing employment, it is possible to infer that the:

Accepted Answer

A)   wage exceeds the value of the marginal product
B)   firm is losing market share
C)   firm is not likely to be minimising losses
D)   value of the marginal product exceeds the market wageE) None of the above
F) C) and D)

Question 16

The economy's stock of equipment and structures is best described as?

Accepted Answer

A)   aggregate stock
B)   aggregate structures
C)   capital
D)   shares and derivativesE) A) and B)
F) A) and C) C

Question 17

When a profit-maximising firm makes a decision to employ a worker, that decision is based on:

Accepted Answer

A)   the familial relationship between the employer and the employee
B)   how much output the worker can produce
C)   the individual contribution that the worker makes to the profit of the firm
D)   the total output produced by the firmE) All of the above
F) A) and C)

Question 18

Assuming the standard criteria for profit maximisation, a competitive firm's final good price will equal the wage paid to workers divided by their marginal product.

Accepted Answer

A) True 
 B)False

Question 19

The value of the marginal product curve gets its shape from:

Accepted Answer

A)   diminishing marginal product
B)   increasing marginal product
C)   tight labour markets
D)   a surplus of workersE) A) and B)
F) C) and D)

Question 20

In the Australian economy most labour services are:

Accepted Answer

A)   final goods
B)   inputs into other goods
C)   imports
D)   outputsE) All of the above
F) A) and C)

Exam 19: The Markets for the Factors of Production

When labour supply increases, the equilibrium wage rises and employment increases.

Correct Answer
verified

The demand for apple pickers is derived from the demand for apples.

Correct Answer
verified

Correct Answer
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The hiring decision of a profit-maximising firm is directly linked to the:

Correct Answer
verified

When a labour market experiences a surplus of labour, there is downward pressure on:

Correct Answer
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A

Table 18-1 -Refer to Table 18-1. What is the market price of the final good?

Correct Answer
verified

Jack the physical therapist invents a new wrist-brace that allows assembly line workers to work without suffering the effects of carpal-tunnel syndrome, thus making the workers more productive. The demand for assembly line workers will:

Correct Answer
verified

A competitive, profit-maximising firm labour demand curve is equal to the:

Correct Answer
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D

When workers are in an industry that is experiencing rapid improvements in technology, they can expect to:

Correct Answer
verified

The quantity available of one factor of production can affect the marginal product of other factors.

Correct Answer
verified

Which of the following events would cause an increase in the labour supply curve?

Correct Answer
verified

The equilibrium rental income paid to the owners of capital at any point in time equals the:

Correct Answer
verified

Table 18-1 -Refer to Table 18-1. If the firm hires three workers, the two workers together produce:

Correct Answer
verified

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

Correct Answer
verified

If one observes a profit-maximising firm decreasing employment, it is possible to infer that the:

Correct Answer
verified

The economy's stock of equipment and structures is best described as?

Correct Answer
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C

When a profit-maximising firm makes a decision to employ a worker, that decision is based on:

Correct Answer
verified

Assuming the standard criteria for profit maximisation, a competitive firm's final good price will equal the wage paid to workers divided by their marginal product.

Correct Answer
verified

The value of the marginal product curve gets its shape from:

Correct Answer
verified

In the Australian economy most labour services are:

Correct Answer
verified

Exam 19: The Markets for the Factors of Production

When labour supply increases, the equilibrium wage rises and employment increases.

Correct AnswerverifiedShow Answer

The demand for apple pickers is derived from the demand for apples.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The hiring decision of a profit-maximising firm is directly linked to the:

Correct AnswerverifiedShow Answer

When a labour market experiences a surplus of labour, there is downward pressure on:

Correct AnswerverifiedA

Table 18-1 -Refer to Table 18-1. What is the market price of the final good?

Correct AnswerverifiedShow Answer

Jack the physical therapist invents a new wrist-brace that allows assembly line workers to work without suffering the effects of carpal-tunnel syndrome, thus making the workers more productive. The demand for assembly line workers will:

Correct AnswerverifiedShow Answer

A competitive, profit-maximising firm labour demand curve is equal to the:

Correct AnswerverifiedD

When workers are in an industry that is experiencing rapid improvements in technology, they can expect to:

Correct AnswerverifiedShow Answer

The quantity available of one factor of production can affect the marginal product of other factors.

Correct AnswerverifiedShow Answer

Which of the following events would cause an increase in the labour supply curve?

Correct AnswerverifiedShow Answer

The equilibrium rental income paid to the owners of capital at any point in time equals the:

Correct AnswerverifiedShow Answer

Table 18-1 -Refer to Table 18-1. If the firm hires three workers, the two workers together produce:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If one observes a profit-maximising firm decreasing employment, it is possible to infer that the:

Correct AnswerverifiedShow Answer

The economy's stock of equipment and structures is best described as?

Correct AnswerverifiedC

When a profit-maximising firm makes a decision to employ a worker, that decision is based on:

Correct AnswerverifiedShow Answer

Assuming the standard criteria for profit maximisation, a competitive firm's final good price will equal the wage paid to workers divided by their marginal product.

Correct AnswerverifiedShow Answer

The value of the marginal product curve gets its shape from:

Correct AnswerverifiedShow Answer

In the Australian economy most labour services are:

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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A

Correct Answer
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D

Correct Answer
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Correct Answer
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C

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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