Question 1

Exhibit 11-9
   In Exhibit 11-9, the marginal revenue product curve will slope downward.

Accepted Answer

A) True 
 B)False

Question 2

A temporary price differential in resource markets is

Accepted Answer

A) eliminated by resource movements 
B) caused by a failure of firms to maximize profits 
C) eliminated by resources moving from highly-valued uses to lower-valued uses 
D) caused by Congress increasing the federal minimum wage 
E) a result of firms using the MRP = MRC rule in hiring resources 
A) eliminated by resource movements 
B) caused by a failure of firms to maximize profits 
C) eliminated by resources moving from highly-valued uses to lower-valued uses 
D) caused by Congress increasing the federal minimum wage 
E) a result of firms using the MRP = MRC rule in hiring resources

Question 3

If a firm hires a resource in a perfectly competitive resource market,

Accepted Answer

A) it must also be a price taker in the product market 
B) it must also be a monopolist in the product market 
C) it faces a horizontal marginal resource cost curve 
D) it faces an upward-sloping marginal resource cost curve 
E) it faces a downward-sloping marginal resource cost curve 
A) it must also be a price taker in the product market 
B) it must also be a monopolist in the product market 
C) it faces a horizontal marginal resource cost curve 
D) it faces an upward-sloping marginal resource cost curve 
E) it faces a downward-sloping marginal resource cost curve

Question 4

Which of the following is not an example of derived demand?

Accepted Answer

A) As more high school graduates go on to college, more professors are hired. 
B) As consumers buy more computers, they demand more powerful computers as they become available. 
C) As people let their hair grow longer, fewer people become barbers. 
D) As people buy more tennis shoes instead of sandals, they buy more shoe laces. 
E) Increased demand for overnight delivery speeds up orders for new delivery trucks. 
A) As more high school graduates go on to college, more professors are hired. 
B) As consumers buy more computers, they demand more powerful computers as they become available. 
C) As people let their hair grow longer, fewer people become barbers. 
D) As people buy more tennis shoes instead of sandals, they buy more shoe laces. 
E) Increased demand for overnight delivery speeds up orders for new delivery trucks.

Question 5

Other things equal, similar resources in alternative uses will be paid

Accepted Answer

A) different amounts based on their different uses 
B) different amounts based on the alternative uses 
C) different amounts if resources are mobile 
D) similar amounts if resources are not mobile 
E) similar amounts if resources are mobile 
A) different amounts based on their different uses 
B) different amounts based on the alternative uses 
C) different amounts if resources are mobile 
D) similar amounts if resources are not mobile 
E) similar amounts if resources are mobile

Question 6

Exhibit 11-4   In Exhibit 11-4, opportunity costs in equilibrium equal

Accepted Answer

A) $0 
B) $120 
C) $1, 000 
D) $300 
E) $1, 300 
A) $0 
B) $120 
C) $1, 000 
D) $300 
E) $1, 300

Question 7

The demand for a resource is derived from the demand for the final product it helps to produce.

Accepted Answer

A) True 
 B)False

Question 8

Exhibit 11-5   In Exhibit 11-5, what is the equilibrium amount of the resource exchanged in the market?

Accepted Answer

A) more than 100 units 
B) 100 units 
C) 60 units 
D) fewer than 60 units 
E) unable to determine from information given 
A) more than 100 units 
B) 100 units 
C) 60 units 
D) fewer than 60 units 
E) unable to determine from information given

Question 9

A firm produces staples in a perfectly competitive market and hires workers in a perfectly competitive labor market.Which of the following is true?

Accepted Answer

A) The supply curve of staples is horizontal. 
B) The supply curve of workers is horizontal. 
C) The firm's demand curve for labor is horizontal. 
D) The marginal revenue product of labor curve is horizontal. 
E) The marginal product of labor curve is horizontal. 
A) The supply curve of staples is horizontal. 
B) The supply curve of workers is horizontal. 
C) The firm's demand curve for labor is horizontal. 
D) The marginal revenue product of labor curve is horizontal. 
E) The marginal product of labor curve is horizontal.

Question 10

Marginal resource cost is defined as the

Accepted Answer

A) additional cost of producing an additional unit of output 
B) change in resource employment required to increase the units of output produced 
C) ratio of marginal revenue product to the market price of the output sold 
D) additional cost of employing one additional unit of a resource 
E) ratio of the change in total resource usage to the change in total resource cost 
A) additional cost of producing an additional unit of output 
B) change in resource employment required to increase the units of output produced 
C) ratio of marginal revenue product to the market price of the output sold 
D) additional cost of employing one additional unit of a resource 
E) ratio of the change in total resource usage to the change in total resource cost

Question 11

One reason why an increase in the minimum wage may result in increased employment is that

Accepted Answer

A) the government prohibits firms from laying-off affected workers 
B) the supply of labor sometimes falls as a result of the higher minimum wage 
C) all wages rises by the same percent that the minimum wage rises 
D) employers react to the higher minimum wage by substituting part-time jobs for full-time jobs 
E) employers react to the higher minimum wage by substituting full-time jobs for part-time jobs 
A) the government prohibits firms from laying-off affected workers 
B) the supply of labor sometimes falls as a result of the higher minimum wage 
C) all wages rises by the same percent that the minimum wage rises 
D) employers react to the higher minimum wage by substituting part-time jobs for full-time jobs 
E) employers react to the higher minimum wage by substituting full-time jobs for part-time jobs

Question 12

As the price of land decreases along its demand curve, the relative price of land

Accepted Answer

A) increases because the prices of other resources have also decreased 
B) decreases because the prices of other resources have also decreased 
C) increases because the prices of other resources have increased 
D) decreases because the prices of other resources are held constant 
E) remains constant because the prices of other resources also increase 
A) increases because the prices of other resources have also decreased 
B) decreases because the prices of other resources have also decreased 
C) increases because the prices of other resources have increased 
D) decreases because the prices of other resources are held constant 
E) remains constant because the prices of other resources also increase

Question 13

A resource's marginal product is

Accepted Answer

A) the revenue produced by one additional unit of that resource, other things constant 
B) the total output produced by one unit of that resource, other things constant 
C) the additional output produced by one additional unit of that resource, other things constant 
D) the total output divided by the number of units of that resource employed 
E) the total output times the number of units of that resource employed 
A) the revenue produced by one additional unit of that resource, other things constant 
B) the total output produced by one unit of that resource, other things constant 
C) the additional output produced by one additional unit of that resource, other things constant 
D) the total output divided by the number of units of that resource employed 
E) the total output times the number of units of that resource employed

Question 14

If a firm is experiencing diminishing marginal returns,

Accepted Answer

A) total output decreases as all resources are increased 
B) total output decreases as all resources are decreased 
C) total output decreases as one variable resource is increased, other things constant 
D) additional increments of output diminish as one variable resource is increased, other things constant 
E) additional increments of output diminish as all variable resources are increased 
A) total output decreases as all resources are increased 
B) total output decreases as all resources are decreased 
C) total output decreases as one variable resource is increased, other things constant 
D) additional increments of output diminish as one variable resource is increased, other things constant 
E) additional increments of output diminish as all variable resources are increased

Question 15

When resource markets are free to adjust, temporary differentials will cause

Accepted Answer

A) b, c, and e to occur 
B) the allocation of fewer resources to lower-paid uses 
C) the equalization of payments for the same resource in different uses 
D) no change in the allocation of resources 
E) the allocation of more resources to higher-paid uses 
A) b, c, and e to occur 
B) the allocation of fewer resources to lower-paid uses 
C) the equalization of payments for the same resource in different uses 
D) no change in the allocation of resources 
E) the allocation of more resources to higher-paid uses

Question 16

Exhibit 11-2   In Exhibit 11-2, which unit of the resource is earning the most economic rent?

Accepted Answer

A) the fifth 
B) the tenth 
C) the fifteenth 
D) the twentieth 
E) they are all earning the same economic rent 
A) the fifth 
B) the tenth 
C) the fifteenth 
D) the twentieth 
E) they are all earning the same economic rent

Question 17

Which of the following best explains why physical therapists' salaries have increased substantially over the last decade?

Accepted Answer

A) Physical therapists today are smarter. 
B) The supply of physical therapists has increased. 
C) The supply of physical therapists has decreased. 
D) The demand for physical therapists has increased. 
E) The demand for physical therapists has decreased. 
A) Physical therapists today are smarter. 
B) The supply of physical therapists has increased. 
C) The supply of physical therapists has decreased. 
D) The demand for physical therapists has increased. 
E) The demand for physical therapists has decreased.

Question 18

Exhibit 11-1   Condider Exibit 11-1.Each of the panels depict the supply and demand conditions in a resource market.In panel (d)how much economic rent do the resources earn?

Accepted Answer

A) $0 
B) $250 
C) $500 
D) $750 
E) $1000 
A) $0 
B) $250 
C) $500 
D) $750 
E) $1000

Question 19

If the marginal revenue product of the fifth worker hired by a firm is $15 and the price of a unit of output is $5 regardless of how much is sold, then the marginal product of the fifth worker is

Accepted Answer

A) 15 units of output 
B) 5 units of output 
C) 3 units of output 
D) 45 units of output 
E) 75 units of output 
A) 15 units of output 
B) 5 units of output 
C) 3 units of output 
D) 45 units of output 
E) 75 units of output

Question 20

What is true along the demand curve for a resource?

Accepted Answer

A) Prices of other resources are assumed constant. 
B) The marginal product of that resource remains constant. 
C) Total cost of production is assumed constant. 
D) The price of that particular resource is assumed constant. 
E) The quantity of that particular resource is assumed constant. 
A) Prices of other resources are assumed constant. 
B) The marginal product of that resource remains constant. 
C) Total cost of production is assumed constant. 
D) The price of that particular resource is assumed constant. 
E) The quantity of that particular resource is assumed constant.

Exam 11: Resource Markets

Exhibit 11-9 In Exhibit 11-9, the marginal revenue product curve will slope downward.

A temporary price differential in resource markets is

If a firm hires a resource in a perfectly competitive resource market,

Which of the following is not an example of derived demand?

Other things equal, similar resources in alternative uses will be paid

Exhibit 11-4 In Exhibit 11-4, opportunity costs in equilibrium equal

The demand for a resource is derived from the demand for the final product it helps to produce.

Exhibit 11-5 In Exhibit 11-5, what is the equilibrium amount of the resource exchanged in the market?

A firm produces staples in a perfectly competitive market and hires workers in a perfectly competitive labor market.Which of the following is true?

Marginal resource cost is defined as the

One reason why an increase in the minimum wage may result in increased employment is that

As the price of land decreases along its demand curve, the relative price of land

A resource's marginal product is

If a firm is experiencing diminishing marginal returns,

When resource markets are free to adjust, temporary differentials will cause

Exhibit 11-2 In Exhibit 11-2, which unit of the resource is earning the most economic rent?

Which of the following best explains why physical therapists' salaries have increased substantially over the last decade?

Exhibit 11-1 Condider Exibit 11-1.Each of the panels depict the supply and demand conditions in a resource market.In panel (d)how much economic rent do the resources earn?

If the marginal revenue product of the fifth worker hired by a firm is $15 and the price of a unit of output is $5 regardless of how much is sold, then the marginal product of the fifth worker is

What is true along the demand curve for a resource?

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

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