Question 1

If 15 workers produce 100 license plates, 16 workers produce 120 license plates, and 17 workers produce 130 license plates, then

Accepted Answer

A) diminishing marginal returns have not set in because the marginal product is positive 
B) the marginal product of the seventeenth worker is 130 
C) diminishing marginal returns must begin with the sixteenth worker 
D) the marginal product of the sixteenth worker is greater than the marginal product of the seventeenth worker 
E) the marginal product of the fifteenth worker must be 20 
A) diminishing marginal returns have not set in because the marginal product is positive 
B) the marginal product of the seventeenth worker is 130 
C) diminishing marginal returns must begin with the sixteenth worker 
D) the marginal product of the sixteenth worker is greater than the marginal product of the seventeenth worker 
E) the marginal product of the fifteenth worker must be 20

Question 2

An increase in the price of a resource will cause a rightward shift of its supply curve.

Accepted Answer

A) True 
 B)False

Question 3

The smaller the quantity and quality of complementary resources used in production,

Accepted Answer

A) the greater the demand for labor 
B) the greater the marginal resource cost of labor 
C) the lower the marginal resource cost of labor 
D) the lower the marginal productivity of labor 
E) the greater the marginal productivity of labor 
A) the greater the demand for labor 
B) the greater the marginal resource cost of labor 
C) the lower the marginal resource cost of labor 
D) the lower the marginal productivity of labor 
E) the greater the marginal productivity of labor

Question 4

Resource owners supply resources in ways that

Accepted Answer

A) maximize their utility 
B) maximize their income 
C) minimize the amount of work 
D) maximize the amount of work 
E) maximize the demand for their resource 
A) maximize their utility 
B) maximize their income 
C) minimize the amount of work 
D) maximize the amount of work 
E) maximize the demand for their resource

Question 5

Exhibit 11-9   In Exhibit 11-9, what is the marginal revenue product of the fifth unit of the variable resource?

Accepted Answer

A) $260 
B) $130 
C) $22 
D) $44 
E) -$18 
A) $260 
B) $130 
C) $22 
D) $44 
E) -$18

Question 6

The resource market is different from the product market because

Accepted Answer

A) in the resource market, firms don't maximize profit 
B) in the resource market, households don't maximize utility 
C) in the resource market, firms are demanders and households are suppliers 
D) supply and demand do not apply in the resource market 
E) supply and demand do not apply in the product market 
A) in the resource market, firms don't maximize profit 
B) in the resource market, households don't maximize utility 
C) in the resource market, firms are demanders and households are suppliers 
D) supply and demand do not apply in the resource market 
E) supply and demand do not apply in the product market

Question 7

The marginal revenue product curve represents a firm's demand curve for a resource.

Accepted Answer

A) True 
 B)False

Question 8

If a firm is hiring in a perfectly competitive labor market, the firm's marginal labor cost (or marginal resource cost)curve slopes downward.

Accepted Answer

A) True 
 B)False

Question 9

Ten cases of spring water are sold for $6 each, and the marginal product of the last unit of labor is 5.If the price of a case increases from $6 to $8, then the marginal revenue product of the last unit of labor would

Accepted Answer

A) decrease by $10 
B) increase by $40 
C) decrease by $30 
D) increase by $10 
E) not change 
A) decrease by $10 
B) increase by $40 
C) decrease by $30 
D) increase by $10 
E) not change

Question 10

Exhibit 11-9
   In Exhibit 11-9, marginal revenue product begins to decline with the second worker hired.

Accepted Answer

A) True 
 B)False

Question 11

Exhibit 11-3   In Exhibit 11-3, opportunity cost in equilibrium equals

Accepted Answer

A) $40 
B) $60 
C) $100 
D) $700 
E) $300 
A) $40 
B) $60 
C) $100 
D) $700 
E) $300

Question 12

Gooey Flakes is the only ready-to-eat cereal that has chocolate syrup injected into each flake.The machine that injects the syrup into the flakes can do nothing else.Which of the following is true?

Accepted Answer

A) All of the machine's earnings are economic rent. 
B) All of the machine's earnings are opportunity cost. 
C) The supply curve for this machine is horizontal. 
D) The demand curve for this machine is horizontal. 
E) The demand curve for this machine is vertical. 
A) All of the machine's earnings are economic rent. 
B) All of the machine's earnings are opportunity cost. 
C) The supply curve for this machine is horizontal. 
D) The demand curve for this machine is horizontal. 
E) The demand curve for this machine is vertical.

Question 13

Exhibit 11-2   In Exhibit 11-2, opportunity cost at equilibrium equals

Accepted Answer

A) $40 
B) $80 
C) $160 
D) $16 
E) $8 
A) $40 
B) $80 
C) $160 
D) $16 
E) $8

Question 14

The marginal revenue product of labor equals

Accepted Answer

A) MP/wage 
B) change in total revenue/change in units of labor 
C) change in total revenue times the change in units of labor 
D) P/MP 
E) MP ´ wage 
A) MP/wage 
B) change in total revenue/change in units of labor 
C) change in total revenue times the change in units of labor 
D) P/MP 
E) MP ´ wage

Question 15

A curve that shows the cost to the firm of hiring an additional unit of a resource is known as a

Accepted Answer

A) marginal product curve 
B) marginal revenue product curve 
C) total revenue product curve 
D) marginal revenue curve 
E) marginal resource cost curve 
A) marginal product curve 
B) marginal revenue product curve 
C) total revenue product curve 
D) marginal revenue curve 
E) marginal resource cost curve

Question 16

Both sugar and fructose can be used in the production of candy.If the price of sugar increases,

Accepted Answer

A) the demand for sugar increases 
B) sugar becomes relatively more expensive than fructose only if the price of fructose falls 
C) sugar becomes relatively more expensive than fructose, other things constant 
D) the price of fructose immediately increases 
E) the price of fructose immediately decreases 
A) the demand for sugar increases 
B) sugar becomes relatively more expensive than fructose only if the price of fructose falls 
C) sugar becomes relatively more expensive than fructose, other things constant 
D) the price of fructose immediately increases 
E) the price of fructose immediately decreases

Question 17

Suppose the marginal product of the second worker hired by a firm is 3, and the price of the last unit produced is $7.Which of the following is true of the marginal revenue product of the second worker?

Accepted Answer

A) It must equal $21. 
B) It must be less than or equal to $21. 
C) It must be greater than or equal to $21. 
D) It equals $21 only if the firm is a price searcher (e.g., monopoly). 
E) We can conclude nothing about marginal revenue product. 
A) It must equal $21. 
B) It must be less than or equal to $21. 
C) It must be greater than or equal to $21. 
D) It equals $21 only if the firm is a price searcher (e.g., monopoly). 
E) We can conclude nothing about marginal revenue product.

Question 18

Which of the following are complementary resources?

Accepted Answer

A) margarine and butter used in baking 
B) sugar and honey used in cereals 
C) a teacher and a chalkboard 
D) rye and wheat bread used in a sandwich shop 
E) a typewriter and a personal computer used in an office 
A) margarine and butter used in baking 
B) sugar and honey used in cereals 
C) a teacher and a chalkboard 
D) rye and wheat bread used in a sandwich shop 
E) a typewriter and a personal computer used in an office

Question 19

If MRPlabor/MRClabor > MRPcapital/MRCcapital, then the firm should

Accepted Answer

A) hire more labor 
B) substitute capital for labor 
C) not change anything 
D) buy more capital 
E) decrease the amount of labor 
A) hire more labor 
B) substitute capital for labor 
C) not change anything 
D) buy more capital 
E) decrease the amount of labor

Question 20

Exhibit 11-6   In Exhibit 11-6, opportunity cost in equilibrium is represented by area

Accepted Answer

A) 0deh 
B) gfeh 
C) dcf 
D) bed 
E) bed + 0deh 
A) 0deh 
B) gfeh 
C) dcf 
D) bed 
E) bed + 0deh

Exam 11: Resource Markets

If 15 workers produce 100 license plates, 16 workers produce 120 license plates, and 17 workers produce 130 license plates, then

An increase in the price of a resource will cause a rightward shift of its supply curve.

The smaller the quantity and quality of complementary resources used in production,

Resource owners supply resources in ways that

Exhibit 11-9 In Exhibit 11-9, what is the marginal revenue product of the fifth unit of the variable resource?

The resource market is different from the product market because

The marginal revenue product curve represents a firm's demand curve for a resource.

If a firm is hiring in a perfectly competitive labor market, the firm's marginal labor cost (or marginal resource cost)curve slopes downward.

Ten cases of spring water are sold for $6 each, and the marginal product of the last unit of labor is 5.If the price of a case increases from $6 to $8, then the marginal revenue product of the last unit of labor would

Exhibit 11-9 In Exhibit 11-9, marginal revenue product begins to decline with the second worker hired.

Exhibit 11-3 In Exhibit 11-3, opportunity cost in equilibrium equals

Gooey Flakes is the only ready-to-eat cereal that has chocolate syrup injected into each flake.The machine that injects the syrup into the flakes can do nothing else.Which of the following is true?

Exhibit 11-2 In Exhibit 11-2, opportunity cost at equilibrium equals

The marginal revenue product of labor equals

A curve that shows the cost to the firm of hiring an additional unit of a resource is known as a

Both sugar and fructose can be used in the production of candy.If the price of sugar increases,

Suppose the marginal product of the second worker hired by a firm is 3, and the price of the last unit produced is $7.Which of the following is true of the marginal revenue product of the second worker?

Which of the following are complementary resources?

If MRPlabor/MRClabor > MRPcapital/MRCcapital, then the firm should

Exhibit 11-6 In Exhibit 11-6, opportunity cost in equilibrium is represented by area

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

Filters

If MRP_labor/MRC_labor > MRP_capital/MRC_capital, then the firm should