Question 1

Exhibit 11-3   In Exhibit 11-3, which unit of the resource is earning the most economic rent?

Accepted Answer

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

Question 2

A temporary resource price differential refers to a price difference

Accepted Answer

A) that will not lead to a shift of resources among users 
B) caused by lack of resource mobility 
C) caused by economic rent 
D) that, for example, causes more workers to move to higher-paid areas 
E) caused by minimum wage legislation 
A) that will not lead to a shift of resources among users 
B) caused by lack of resource mobility 
C) caused by economic rent 
D) that, for example, causes more workers to move to higher-paid areas 
E) caused by minimum wage legislation

Question 3

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

Accepted Answer

A) More people want to plant gardens in the spring; therefore, demand for hoes and shovels increases then. 
B) Strong ticket sales for a concert cause the producers to schedule an extra show and demand more ushers. 
C) Increased use of robots leads to a decrease in demand for labor. 
D) The development of alternative fuels made from corn leads to an increase in demand for corn. 
E) Increasing demand for music leads to the construction of more recording studios. 
A) More people want to plant gardens in the spring; therefore, demand for hoes and shovels increases then. 
B) Strong ticket sales for a concert cause the producers to schedule an extra show and demand more ushers. 
C) Increased use of robots leads to a decrease in demand for labor. 
D) The development of alternative fuels made from corn leads to an increase in demand for corn. 
E) Increasing demand for music leads to the construction of more recording studios.

Question 4

If the marginal revenue product of the fifth worker hired by a firm is $15 and the price of the last unit of output produced is $5, then the marginal product of the fifth worker is

Accepted Answer

A) 15 units of output if the product market is perfectly competitive 
B) 3 units of output if the product market is perfectly competitive 
C) 45 units of output if the product market is perfectly competitive 
D) 5 units of output if the product producer is a price searcher 
E) 15 units of output if the product producer is a price searcher 
A) 15 units of output if the product market is perfectly competitive 
B) 3 units of output if the product market is perfectly competitive 
C) 45 units of output if the product market is perfectly competitive 
D) 5 units of output if the product producer is a price searcher 
E) 15 units of output if the product producer is a price searcher

Question 5

Exhibit 11-6   In Exhibit 11-6, total earnings by the resource in equilibrium is represented by area

Accepted Answer

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

Question 6

Which of the following would not explain why academic economists earn less than corporate economists?

Accepted Answer

A) more freedom in daily schedules 
B) less restrictions on attire 
C) less freedom in choice of research topics 
D) less control over their public statements 
E) None of the answers is correct. 
A) more freedom in daily schedules 
B) less restrictions on attire 
C) less freedom in choice of research topics 
D) less control over their public statements 
E) None of the answers is correct.

Question 7

If ten cases of pretzels are sold at a price of $8 each and the marginal product of the last unit of labor is 5, the firm's total revenue is

Accepted Answer

A) $80 
B) $30 
C) $50 
D) $6 
E) $150 
A) $80 
B) $30 
C) $50 
D) $6 
E) $150

Question 8

Fred Ramirez is a farmer who charts the relationship between number of acres planted in corn and number of bushels of corn harvested.Which marginal concept can Fred measure with this data?

Accepted Answer

A) marginal utility 
B) marginal product 
C) marginal cost 
D) marginal revenue product 
E) marginal factor cost 
A) marginal utility 
B) marginal product 
C) marginal cost 
D) marginal revenue product 
E) marginal factor cost

Question 9

A TV actor used to be a teacher.Aside from the salary, he likes both jobs equally well.If he can earn $50, 000 as a teacher and $300, 000 as an actor, what are his economic rent and opportunity costs as an actor?

Accepted Answer

A) Economic rent is $250, 000; opportunity costs are $50, 000. 
B) Economic rent is $50, 000; opportunity costs are $250, 000. 
C) Economic rent is $50, 000; opportunity costs are $300, 000. 
D) Economic rent is $300, 000; opportunity costs are $50, 000. 
E) Economic rent is $300, 000; opportunity costs are $350, 000. 
A) Economic rent is $250, 000; opportunity costs are $50, 000. 
B) Economic rent is $50, 000; opportunity costs are $250, 000. 
C) Economic rent is $50, 000; opportunity costs are $300, 000. 
D) Economic rent is $300, 000; opportunity costs are $50, 000. 
E) Economic rent is $300, 000; opportunity costs are $350, 000.

Question 10

The market price of output affects

Accepted Answer

A) the supply of the resources used to produce it 
B) the demand for the resources used to produce it 
C) the marginal product of the resources used to produce it 
D) the marginal resource cost of the resources used to produce it 
E) the total cost of the resources used to produce it 
A) the supply of the resources used to produce it 
B) the demand for the resources used to produce it 
C) the marginal product of the resources used to produce it 
D) the marginal resource cost of the resources used to produce it 
E) the total cost of the resources used to produce it

Question 11

Exhibit 11-1   Condider Exibit 11-1.Each of the panels depict the supply and demand conditions in a resource market.In which of the panels will the resource earnings reflect opportunity cost of the resource completely?

Accepted Answer

A) panel (a) 
B) panel (b) 
C) panel (c) 
D) panel (d) 
E) panel (e) 
A) panel (a) 
B) panel (b) 
C) panel (c) 
D) panel (d) 
E) panel (e)

Question 12

An increase in the demand for automobiles will increase the demand for labor used to produce the automobiles due to a(n)

Accepted Answer

A) increase in the marginal revenue product of labor 
B) decrease in the marginal revenue product of labor 
C) increase in the marginal revenue product of automobiles 
D) decrease in the marginal revenue product of automobiles 
E) decrease in the price of automobiles 
A) increase in the marginal revenue product of labor 
B) decrease in the marginal revenue product of labor 
C) increase in the marginal revenue product of automobiles 
D) decrease in the marginal revenue product of automobiles 
E) decrease in the price of automobiles

Question 13

Marginal revenue product is defined as

Accepted Answer

A) the total revenue generated by inputs 
B) the additional output produced by one additional unit of a resource, other things constant 
C) the marginal revenue from each unit of output 
D) the total revenue divided by the number of resources employed 
E) the additional revenue generated by one additional unit of a resource, other things constant 
A) the total revenue generated by inputs 
B) the additional output produced by one additional unit of a resource, other things constant 
C) the marginal revenue from each unit of output 
D) the total revenue divided by the number of resources employed 
E) the additional revenue generated by one additional unit of a resource, other things constant

Question 14

The market supply curve of labor is

Accepted Answer

A) upward sloping 
B) perfectly inelastic 
C) upward sloping at first but then bends backward 
D) downward sloping 
E) perfectly elastic 
A) upward sloping 
B) perfectly inelastic 
C) upward sloping at first but then bends backward 
D) downward sloping 
E) perfectly elastic

Question 15

The portion of a worker's total earnings that is not necessary to keep the worker in her present job is called

Accepted Answer

A) opportunity cost 
B) consumer surplus 
C) economic profit 
D) economic rent 
E) normal profit 
A) opportunity cost 
B) consumer surplus 
C) economic profit 
D) economic rent 
E) normal profit

Question 16

If the marginal resource cost of the tenth worker hired by a firm is $4 and the wage of the tenth worker is $3, the firm will hire ten workers if the marginal revenue product of the tenth worker is

Accepted Answer

A) $3 
B) less than $3 
C) greater than or equal to $3 
D) greater than or equal to $4 
E) less than $4 
A) $3 
B) less than $3 
C) greater than or equal to $3 
D) greater than or equal to $4 
E) less than $4

Question 17

A firm hires labor in a perfectly competitive labor market.If the wage rate is $44, the firm should hire

Accepted Answer

A) 44 workers 
B) all units of labor whose marginal product is 44 
C) all units of labor whose marginal revenue product is $44 
D) all units of labor whose marginal revenue product is greater than or equal to $44 
E) all units of labor whose marginal revenue product is less than or equal to $44 
A) 44 workers 
B) all units of labor whose marginal product is 44 
C) all units of labor whose marginal revenue product is $44 
D) all units of labor whose marginal revenue product is greater than or equal to $44 
E) all units of labor whose marginal revenue product is less than or equal to $44

Question 18

Of the following resources used to supply sidewalk food in New York City, which is the most expensive?

Accepted Answer

A) capital 
B) land 
C) entrepreneurial ability 
D) labor 
E) food 
A) capital 
B) land 
C) entrepreneurial ability 
D) labor 
E) food

Question 19

The marginal revenue product of land curve indicates

Accepted Answer

A) the additional output generated by an additional unit of land, other things constant 
B) the additional cost to the firm when it employs an additional unit of land, other things constant 
C) the additional profit the firm earns when it employs an additional unit of land, other things constant 
D) the additional revenue the firm earns when it employs an additional unit of land, other things constant 
E) the amount of land required to produce an additional unit of output, other things constant 
A) the additional output generated by an additional unit of land, other things constant 
B) the additional cost to the firm when it employs an additional unit of land, other things constant 
C) the additional profit the firm earns when it employs an additional unit of land, other things constant 
D) the additional revenue the firm earns when it employs an additional unit of land, other things constant 
E) the amount of land required to produce an additional unit of output, other things constant

Question 20

Exhibit 11-2   In Exhibit 11-2, opportunity cost at equilibrium is represented by area

Accepted Answer

A) a 
B) b 
C) c 
D) a + b 
E) b + c 
A) a 
B) b 
C) c 
D) a + b 
E) b + c

Exam 11: Resource Markets

Exhibit 11-3 In Exhibit 11-3, which unit of the resource is earning the most economic rent?

A temporary resource price differential refers to a price difference

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

If the marginal revenue product of the fifth worker hired by a firm is $15 and the price of the last unit of output produced is $5, then the marginal product of the fifth worker is

Exhibit 11-6 In Exhibit 11-6, total earnings by the resource in equilibrium is represented by area

Which of the following would not explain why academic economists earn less than corporate economists?

If ten cases of pretzels are sold at a price of $8 each and the marginal product of the last unit of labor is 5, the firm's total revenue is

Fred Ramirez is a farmer who charts the relationship between number of acres planted in corn and number of bushels of corn harvested.Which marginal concept can Fred measure with this data?

A TV actor used to be a teacher.Aside from the salary, he likes both jobs equally well.If he can earn $50, 000 as a teacher and $300, 000 as an actor, what are his economic rent and opportunity costs as an actor?

The market price of output affects

Exhibit 11-1 Condider Exibit 11-1.Each of the panels depict the supply and demand conditions in a resource market.In which of the panels will the resource earnings reflect opportunity cost of the resource completely?

An increase in the demand for automobiles will increase the demand for labor used to produce the automobiles due to a(n)

Marginal revenue product is defined as

The market supply curve of labor is

The portion of a worker's total earnings that is not necessary to keep the worker in her present job is called

If the marginal resource cost of the tenth worker hired by a firm is $4 and the wage of the tenth worker is $3, the firm will hire ten workers if the marginal revenue product of the tenth worker is

A firm hires labor in a perfectly competitive labor market.If the wage rate is $44, the firm should hire

Of the following resources used to supply sidewalk food in New York City, which is the most expensive?

The marginal revenue product of land curve indicates

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

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