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Exam 19: The Markets for the Factors of Production

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Question 51

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The value of the marginal product of labour is equal to the change in:

A) total revenue with the addition of the last worker
B) total cost with the addition of the last worker
C) total profit with the addition of the last worker
D) marginal cost with the addition of the last worker

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

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Question 52

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Labour markets are governed by the force(s) of:

A) supply and demand
B) regulation and supply
C) demand only
D) supply only

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

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Question 53

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Describe the process by which the market for capital and the market for land reach equilibrium. As part of your description, elaborate on the role of the stock of the resource versus the flow of services from the resource.

Describe the difference between a diminishing marginal product of labour and a negative marginal product of labour. Why would a profit-maximising firm always choose to operate where the marginal product of labour is decreasing (but not negative)?

The purchase price of capital is:

The rental price of capital is:

A recent flood in Queensland has destroyed much of the farmland used to cultivate bananas and tomatoes that lies in fertile regions near the rivers. Describe the effect of the flood on the marginal productivity of land, labour and capital. How would the flood affect the price of inputs? Provide some examples.

As the number of concrete workers in Australia falls, the wage paid to the remaining concrete workers will fall as well.

Suppose that the value of the marginal product of labour is now less than the wage. Hiring an additional worker would be:

If you purchase a part ownership stake in a firm, you are said to be:

For the profit-maximising competitive firm, the value of marginal product curve is:

Faustmann owns a small forestry company in New Zealand. Which of the following events will lead to an increase in Faustmann's labour demand curve for timber-workers? (i) the price of A-grade timber increases (ii) local workers form a union to protect themselves from low wages (iii) Faustmann installs a new drying kiln to increase the volume of timber that can be processed

Graph 18-1 This graph represents the value of marginal product for a firm that sells its product in a competitive market. Use the graph to answer the following question(s) . -Refer to Graph 18-1. If a firm was operating at a level of output above Q*, decreasing the amount of labour would do which of the following? (i) raise profit (ii) possibly lower revenue (iii) increase the marginal product of labour

What will happen to the labour demand curve for timber workers and why in the following cases: a. the price of timber increases. b. new harvesting technology increases the quantity of logs that can be processed. c. several of the forestry company's sawmills have to be shut down to deal with toxic waste spills.

The marginal product of any factor of production depends on:

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

The value of the marginal product of any input is equal to the marginal product of that input multiplied by the market price of the output.

The accumulation of machinery and buildings used in the production of new goods and services is referred to as:

Amy has two jobs, one for the winter and one for the summer. In the winter, she works as a tour guide at a crocodile zoo and earns $15 an hour. During the summer, Amy works as an English tutor and earns $18 an hour. -According to the information provided, what is Amy's opportunity cost of taking an hour off work to go cycling during the winter months?

If workers respond to an increase in the opportunity cost of leisure by taking more of it, their labour supply curve is: