Question 1

Firms will continue to hire workers as long as:

Accepted Answer

A) they make a profit. 
B) the value of the marginal product is greater than the marginal cost of hiring labor. 
C) the wage is below the product price. 
D) there are no diminishing returns. 
A) they make a profit. 
B) the value of the marginal product is greater than the marginal cost of hiring labor. 
C) the wage is below the product price. 
D) there are no diminishing returns.

Question 2

Use the following to answer question:
Figure: The Demand for Bricklayers  
-(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.The equilibrium market wage for bricklayers is $100 a day,but a minimum wage of $130 a day for bricklayers is set by the government.As a result:

Accepted Answer

A) 6 workers will now be hired by the firm. 
B) three workers who would have been employed at the previous $100 market wage are now unemployed. 
C) all bricklayers are better off. 
D) construction firms will shut down. 
A) 6 workers will now be hired by the firm. 
B) three workers who would have been employed at the previous $100 market wage are now unemployed. 
C) all bricklayers are better off. 
D) construction firms will shut down.

Question 3

The importance of human capital has been increased by technological progress.

Accepted Answer

A) True 
 B)False

Question 4

According to the marginal productivity theory of income distribution,every factor of production is paid a wage equal to the equilibrium value of its average product.

Accepted Answer

A) True 
 B)False

Question 5

In 2015,the median weekly earnings of union members was roughly 25% higher than the median weekly earnings of workers not represented by unions.

Accepted Answer

A) True 
 B)False

Question 6

Differences in the attractiveness of different types of jobs resulting in differences in wages is not consistent with the marginal productivity theory of income distribution.

Accepted Answer

A) True 
 B)False

Question 7

If a perfectly competitive firm chooses its level of output so that price equals marginal revenue,the value of the marginal product of labor will equal the wage rate.

Accepted Answer

A) True 
 B)False

Question 8

If the marginal product is _____,the value of marginal product must be _____.

Accepted Answer

A) rising;falling 
B) falling;falling 
C) falling;rising 
D) rising;zero 
A) rising;falling 
B) falling;falling 
C) falling;rising 
D) rising;zero

Question 9

In 2015,the median weekly earnings of union members was actually lower than the median weekly earnings of workers not represented by unions.

Accepted Answer

A) True 
 B)False

Question 10

The LARGEST component of the factor distribution of income in the United States is:

Accepted Answer

A) interest and rents. 
B) taxes. 
C) corporate profits. 
D) compensation of employees. 
A) interest and rents. 
B) taxes. 
C) corporate profits. 
D) compensation of employees.

Question 11

The marginal productivity theory of income distribution is based on the assumption that factor markets are perfectly competitive.

Accepted Answer

A) True 
 B)False

Question 12

G.Reecy's Hamburger Joint is a fast-food restaurant.Which factor is associated with production?

Accepted Answer

A) the raw meat used for the hamburgers 
B) the hamburger buns 
C) the cook 
D) the concentrate that is diluted to make the soft drinks 
A) the raw meat used for the hamburgers 
B) the hamburger buns 
C) the cook 
D) the concentrate that is diluted to make the soft drinks

Question 13

Factor demand is called derived demand because it:

Accepted Answer

A) requires the use of other factors. 
B) depends on demand for the product that the factor produces. 
C) has a downward-sloping demand curve. 
D) has a constant marginal factor cost. 
A) requires the use of other factors. 
B) depends on demand for the product that the factor produces. 
C) has a downward-sloping demand curve. 
D) has a constant marginal factor cost.

Question 14

The marginal productivity theory of income distribution assumes that factor markets are perfectly competitive.

Accepted Answer

A) True 
 B)False

Question 15

The U.S.labor market shows large differences in the median earnings of workers across ethnicities and gender.

Accepted Answer

A) True 
 B)False

Question 16

As the _____ of labor used in production increases,ceteris paribus,eventually the _____ of labor will _____.

Accepted Answer

A) price;supply;increase 
B) quantity;marginal product;fall 
C) quantity;marginal product;rise 
D) quantity;value of the marginal product;rise 
A) price;supply;increase 
B) quantity;marginal product;fall 
C) quantity;marginal product;rise 
D) quantity;value of the marginal product;rise

Question 17

In the markets for goods and services,households demand labor and firms supply labor.

Accepted Answer

A) True 
 B)False

Question 18

The marginal productivity theory of income distribution assumes that factor markets are oligopolies.

Accepted Answer

A) True 
 B)False

Question 19

At Hamill Manufacturing of Pennsylvania,highly skilled senior machinists are paid $70,000,excluding benefits,but the average skilled machinist generates approximately $137,000 in value added.This difference is due to the fact that the:

Accepted Answer

A) marginal productivity theory of income distribution does not apply in this case. 
B) value of the marginal product of the last machinist hired is less than the average of all machinists employed. 
C) value of the marginal product of the last machinist hired is greater than the average of all machinists employed. 
D) value of the marginal product of the last machinist hired is equal to the average of all machinists employed. 
A) marginal productivity theory of income distribution does not apply in this case. 
B) value of the marginal product of the last machinist hired is less than the average of all machinists employed. 
C) value of the marginal product of the last machinist hired is greater than the average of all machinists employed. 
D) value of the marginal product of the last machinist hired is equal to the average of all machinists employed.

Question 20

Use the following to answer question:
Figure: The Demand for Bricklayers  
-(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If the price for bricks laid in the wall is $0.10 a brick,the marginal product of the second bricklayer is _____ bricks.

Accepted Answer

A) 1,500 
B) 1,400 
C) 1,300 
D) 1,200 
A) 1,500 
B) 1,400 
C) 1,300 
D) 1,200

Exam 19: Factor Markets and the Distribution of Income

Firms will continue to hire workers as long as:

Use the following to answer question: Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.The equilibrium market wage for bricklayers is $100 a day,but a minimum wage of $130 a day for bricklayers is set by the government.As a result:

The importance of human capital has been increased by technological progress.

According to the marginal productivity theory of income distribution,every factor of production is paid a wage equal to the equilibrium value of its average product.

In 2015,the median weekly earnings of union members was roughly 25% higher than the median weekly earnings of workers not represented by unions.

Differences in the attractiveness of different types of jobs resulting in differences in wages is not consistent with the marginal productivity theory of income distribution.

If a perfectly competitive firm chooses its level of output so that price equals marginal revenue,the value of the marginal product of labor will equal the wage rate.

If the marginal product is _____,the value of marginal product must be _____.

In 2015,the median weekly earnings of union members was actually lower than the median weekly earnings of workers not represented by unions.

The LARGEST component of the factor distribution of income in the United States is:

The marginal productivity theory of income distribution is based on the assumption that factor markets are perfectly competitive.

G.Reecy's Hamburger Joint is a fast-food restaurant.Which factor is associated with production?

Factor demand is called derived demand because it:

The marginal productivity theory of income distribution assumes that factor markets are perfectly competitive.

The U.S.labor market shows large differences in the median earnings of workers across ethnicities and gender.

As the _____ of labor used in production increases,ceteris paribus,eventually the _____ of labor will _____.

In the markets for goods and services,households demand labor and firms supply labor.

The marginal productivity theory of income distribution assumes that factor markets are oligopolies.

At Hamill Manufacturing of Pennsylvania,highly skilled senior machinists are paid $70,000,excluding benefits,but the average skilled machinist generates approximately $137,000 in value added.This difference is due to the fact that the:

Use the following to answer question: Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If the price for bricks laid in the wall is $0.10 a brick,the marginal product of the second bricklayer is _____ bricks.

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

If the marginal product is _,the value of marginal product must be _.

As the ___ of labor used in production increases,ceteris paribus,eventually the _ of labor will ___.