Question 1

Of the total income earned in the U.S. economy, approximately

Accepted Answer

A)   33 percent is earned by workers, and 67 percent is earned by landowners.
B)   50 percent is earned by workers, 25 percent is earned by landowners, and 25 percent is earned by owners of capital.
C)   67 percent is earned by workers, and 33 percent is earned by owners of land and capital.
D)   90 percent is earned by workers, and 10 percent is earned by owners of land and capital.E) A) and C)
F) A) and B)

Question 2

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases 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

Accepted Answer

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

Question 3

What are the three most important factors of production?

Accepted Answer

The three most impor...

Question 4

An increase in the value of the marginal product of labor has the effect of increasing the

Accepted Answer

A)   demand for labor.
B)   wage.
C)   quantity of labor employed.
D)   All of the above are correct.E) A) and C)
F) A) and B)

Question 5

For a competitive, profit-maximizing firm, the demand curve for labor will shift in response to a change in the

Accepted Answer

A)   wage rate.
B)   quantity of labor demanded.
C)   price of the product that the firm sells.
D)   an increase in the supply of labor.E) None of the above
F) A) and B)

Question 6

Average productivity can be measured as total output divided by total units of labor.

Accepted Answer

A) True 
 B)False

Question 7

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. If Gertrude is a competitor in both the fresh Pacific salmon market and in the market for crew members, she is called a price

Accepted Answer

A)   taker in the salmon market and a wage setter in the crew market.
B)   taker in the crew market and a price setter in the salmon market.
C)   taker in both markets.
D)   setter in both markets.E) A) and B)
F) A) and C)

Question 8

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 quantity of doctors will

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   It is not possible to determine what will happen to the equilibrium quantity.E) None of the above
F) All of the above

Question 9

As a result of increasing its workforce from 9 workers to 10 workers, a firm's total revenue per day increases from $60,000 to $60,250 and its total cost per day increases from $58,500 to $58,700. The marginal profit of the 10th worker is

Accepted Answer

A)   -$50.
B)   $50.
C)   $200.
D)   $250.E) B) and C)
F) C) and D)

Question 10

Figure 18-12. The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. 
-Refer to Figure 18-12. If the shop charges $150 per repair, then what is the value of the marginal product of the second mechanic?

Accepted Answer

The marginal product of the se...

Question 11

Figure 18-5
The figure shows a particular profit­maximizing, competitive firm's value­of­marginal­product (VMP)  curve. On the horizontal axis, L represents the number of workers. The time frame is daily. 
-Refer to Figure 18-5. The value­of­marginal­product curve that is drawn could be relabeled as the firm's

Accepted Answer

A)   production function.
B)   total revenue curve.
C)   labor supply curve.
D)   labor demand curve.E) All of the above
F) None of the above

Question 12

Table 18-3 
-Refer to Table 18-3. For Firm C, the marginal product of labor is

Accepted Answer

A)   increasing.
B)   constant.
C)   decreasing.
D)   negative.E) C) and D)
F) A) and D)

Question 13

Jessica receives a raise at her current part-time job from $9 to $11 per hour. If her labor supply curve is backward sloping, she will work fewer hours after receiving the pay raise.

Accepted Answer

A) True 
 B)False

Question 14

Suppose that in November a profit-maximizing firm has 100 employees. By December, the firm has decreased employment. One can infer that, when 100 employees are hired, the

Accepted Answer

A)   firm is losing market share.
B)   firm is minimizing losses.
C)   wage exceeds the value of the marginal product of labor.
D)   value of the marginal product of labor exceeds the wage.E) B) and D)
F) None of the above

Question 15

Does the movement of workers from other countries to the U.S. affect the demand for labor in the U.S., or does it affect the supply of labor in the U.S.?

Accepted Answer

The movement of work...

Question 16

'Chuckie's Pizza Palace produces gourmet pizzas that sell for $20 each. Assume that labor is the only input that varies for the firm. If Chuckie hires 10 workers, he can produce and sell 600 pizzas per week. If he hires 11 workers, he can produce and sell 650 pizzas per week. Chuckie pays each of his workers $400 per week. Which of the following is correct?

Accepted Answer

A)   For the 11th worker, the marginal profit is $1,000.
B)   For the 11th worker, the marginal revenue product is $1,000.
C)   The firm is maximizing its profit.
D)   If the firm is employing 11 workers, then its profit would increase if it cut back to 10 workers.E) None of the above
F) C) and D)

Question 17

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

Accepted Answer

A)   The wage that a worker earns is a function of her human capital.
B)   A firm's demand for college textbook study guide authors is inseparably linked to the supply of college textbooks.
C)   Factors that increase the demand for labor will increase the equilibrium wage.
D)   All of the above are correct.E) B) and D)
F) All of the above

Question 18

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 sells its output for $20 per unit, and it pays each of its workers $1,250 per week. The firm maximizes profit by hiring

Accepted Answer

A)   3 workers.
B)   4 workers.
C)   5 workers.
D)   6 workers.E) A) and B)
F) None of the above

Question 19

Table 18-4 
-Refer to Table 18-4. The price of output is

Accepted Answer

A)   $400.
B)   $3.
C)   $2.
D)   $1.E) C) and D)
F) A) and B)

Question 20

Scenario 18-6
Rocchetta Industries manufactures and supplies bottled water in Mexico. As a result of a contamination of water supplies at many of Mexico's resort communities, the demand for bottled water has increased.
-Refer to Scenario 18-6. When the labor market adjusts to its new equilibrium, we would expect the

Accepted Answer

A)   marginal product of labor to be higher than it was before the increase in demand for bottled water.
B)   value of the marginal product of labor to be higher than it was before the increase in demand for bottled water.
C)   price of bottled water to be lower than it was before the increase in demand for bottled water.
D)   wages of Rocchetta workers to be lower than they were before the increase in demand for bottled water.E) None of the above
F) All of the above

Exam 18: The Markets for the Factors of Production

Figure 18-12. The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. -Refer to Figure 18-12. If the shop charges $150 per repair, then what is the value of the marginal product of the second mechanic?

Correct Answer
verified
The marginal product of the se...
View Answer

Does the movement of workers from other countries to the U.S. affect the demand for labor in the U.S., or does it affect the supply of labor in the U.S.?

Correct Answer
verified
The movement of work...
View Answer

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases 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

Correct Answer
verified

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

Correct Answer
verified

For a competitive, profit-maximizing firm, the demand curve for labor will shift in response to a change in the

Correct Answer
verified

Of the total income earned in the U.S. economy, approximately

Correct Answer
verified

Jessica receives a raise at her current part-time job from $9 to $11 per hour. If her labor supply curve is backward sloping, she will work fewer hours after receiving the pay raise.

Correct Answer
verified

Table 18-4 -Refer to Table 18-4. The price of output is

Correct Answer
verified

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 sells its output for $20 per unit, and it pays each of its workers $1,250 per week. The firm maximizes profit by hiring

Correct Answer
verified

Correct Answer
verified

Average productivity can be measured as total output divided by total units of labor.

Correct Answer
verified

Correct Answer
verified

Suppose that in November a profit-maximizing firm has 100 employees. By December, the firm has decreased employment. One can infer that, when 100 employees are hired, the

Correct Answer
verified

Correct Answer
verified

An increase in the value of the marginal product of labor has the effect of increasing the

Correct Answer
verified

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 quantity of doctors will

Correct Answer
verified

Correct Answer
verified

As a result of increasing its workforce from 9 workers to 10 workers, a firm's total revenue per day increases from $60,000 to $60,250 and its total cost per day increases from $58,500 to $58,700. The marginal profit of the 10th worker is

Correct Answer
verified

What are the three most important factors of production?

Correct Answer
verified
The three most impor...
View Answer

Table 18-3 -Refer to Table 18-3. For Firm C, the marginal product of labor is

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Figure 18-12. The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. -Refer to Figure 18-12. If the shop charges $150 per repair, then what is the value of the marginal product of the second mechanic?

Correct AnswerverifiedThe marginal product of the se...View AnswerShow Answer

Does the movement of workers from other countries to the U.S. affect the demand for labor in the U.S., or does it affect the supply of labor in the U.S.?

Correct AnswerverifiedThe movement of work...View AnswerShow Answer

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases 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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For a competitive, profit-maximizing firm, the demand curve for labor will shift in response to a change in the

Correct AnswerverifiedShow Answer

Of the total income earned in the U.S. economy, approximately

Correct AnswerverifiedShow Answer

Jessica receives a raise at her current part-time job from $9 to $11 per hour. If her labor supply curve is backward sloping, she will work fewer hours after receiving the pay raise.

Correct AnswerverifiedShow Answer

Table 18-4 -Refer to Table 18-4. The price of output is

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 sells its output for $20 per unit, and it pays each of its workers $1,250 per week. The firm maximizes profit by hiring

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Average productivity can be measured as total output divided by total units of labor.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that in November a profit-maximizing firm has 100 employees. By December, the firm has decreased employment. One can infer that, when 100 employees are hired, the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An increase in the value of the marginal product of labor has the effect of increasing the

Correct AnswerverifiedShow Answer

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 quantity of doctors will

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

As a result of increasing its workforce from 9 workers to 10 workers, a firm's total revenue per day increases from $60,000 to $60,250 and its total cost per day increases from $58,500 to $58,700. The marginal profit of the 10th worker is

Correct AnswerverifiedShow Answer

What are the three most important factors of production?

Correct AnswerverifiedThe three most impor...View AnswerShow Answer

Table 18-3 -Refer to Table 18-3. For Firm C, the marginal product of labor is

Correct AnswerverifiedShow Answer

Correct Answer
verified
The marginal product of the se...
View Answer

Correct Answer
verified
The movement of work...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

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 three most impor...
View Answer

Correct Answer
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