Question 1

The supply of land is

Accepted Answer

A)  perfectly elastic. 
B)  elastic, but not perfectly elastic. 
C)  perfectly inelastic. 
D)  inelastic, but not perfectly inelastic. 
A)  perfectly elastic. 
B)  elastic, but not perfectly elastic. 
C)  perfectly inelastic. 
D)  inelastic, but not perfectly inelastic.

Question 2

-The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. How much labor will the firm hire if the market wage is $300 per day?

Accepted Answer

A)  0 workers 
B)  1 worker 
C)  2 workers 
D)  3 workers 
A)  0 workers 
B)  1 worker 
C)  2 workers 
D)  3 workers

Question 3

New technology

Accepted Answer

A)  definitely increases a firm's demand for labor. 
B)  definitely decreases a firm's demand for labor. 
C)  definitely does not change a firm's demand for labor. 
D)  could increase or decrease a firm's demand for labor. 
A)  definitely increases a firm's demand for labor. 
B)  definitely decreases a firm's demand for labor. 
C)  definitely does not change a firm's demand for labor. 
D)  could increase or decrease a firm's demand for labor.

Question 4

An example of a bilateral monopoly would be when a union

Accepted Answer

A)  bargains with many different employers. 
B)  deals directly with the final consumers. 
C)  bargains with a monopoly. 
D)  bargains with a monopsony. 
A)  bargains with many different employers. 
B)  deals directly with the final consumers. 
C)  bargains with a monopoly. 
D)  bargains with a monopsony.

Question 5

If the wage that a competitive firm must pay its workers exceeds their value of marginal product, the firm will

Accepted Answer

A)  decrease the quantity of labor it employs. 
B)  increase the quantity of labor it employs. 
C)  lower the price of the good. 
D)  raise the price of the good. 
A)  decrease the quantity of labor it employs. 
B)  increase the quantity of labor it employs. 
C)  lower the price of the good. 
D)  raise the price of the good.

Question 6

For a monopsony the labor supply curve

Accepted Answer

A)  does not exist. 
B)  is the marginal product of labor curve. 
C)  is the marginal cost of labor curve. 
D)  lies below the marginal cost of labor curve. 
A)  does not exist. 
B)  is the marginal product of labor curve. 
C)  is the marginal cost of labor curve. 
D)  lies below the marginal cost of labor curve.

Question 7

If a monopsony must negotiate with a union, then the wage will probably be

Accepted Answer

A)  more than the value of marginal product. 
B)  more than the marginal cost of labor. 
C)  the same as if there had been no union. 
D)  more than what it would have been without a union but not more than the value of marginal product. 
A)  more than the value of marginal product. 
B)  more than the marginal cost of labor. 
C)  the same as if there had been no union. 
D)  more than what it would have been without a union but not more than the value of marginal product.

Question 8

-A worker has a marginal product of 15 units a day, each of which can be sold for $10. Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer.

Accepted Answer

It is profitable to hire this worker bec

Question 9

If a union successfully restricts the supply of labor to the firm but the union has no effect on the demand for labor, then the

Accepted Answer

A)  wage increases and there is no change in employment. 
B)  wage increases and employment increases. 
C)  wage increases and employment decreases. 
D)  wage increases and there is an unambiguous effect on employment. 
A)  wage increases and there is no change in employment. 
B)  wage increases and employment increases. 
C)  wage increases and employment decreases. 
D)  wage increases and there is an unambiguous effect on employment.

Question 10

When Sam's Scarves uses 2 knitting machines and employs 3 people, total revenue is $330 a day. When Sam's Scarves uses 2 knitting machines and employs 4 people, total revenue is $360 a day. The value of marginal product of the third worker is ________.

Accepted Answer

A)  $110 
B)  $30 
C)  $360 
D)  $90 
A)  $110 
B)  $30 
C)  $360 
D)  $90

Question 11

-Consider the monopsony in the above figure. The monopsony will hire ________ hours per week.

Accepted Answer

A)  200 
B)  400 
C)  600 
D)  None of the above answers is correct. 
A)  200 
B)  400 
C)  600 
D)  None of the above answers is correct.

Question 12

If Delores wanted to make sure that she had $3,000 a year from now, how much would she need to save now if the interest rate is 7 percent?

Accepted Answer

A)  $3000 
B)  $2804 
C)  $2790 
D)  $2666 
A)  $3000 
B)  $2804 
C)  $2790 
D)  $2666

Question 13

-Consider the monopsony in the above figure. The 200th hour of labor creates how much added revenue per hour for the monopsony?

Accepted Answer

A)  $10 
B)  $15 
C)  $20 
D)  None of the above answers is correct. 
A)  $10 
B)  $15 
C)  $20 
D)  None of the above answers is correct.

Question 14

-If there is a monopsony operating in the labor market illustrated in the figure above, the equilibrium wage and quantity of labor hired is

Accepted Answer

A)  $15 and 50 hours. 
B)  $10 and 100 hours. 
C)  $10 and 50 hours. 
D)  $5 and 50 hours. 
A)  $15 and 50 hours. 
B)  $10 and 100 hours. 
C)  $10 and 50 hours. 
D)  $5 and 50 hours.

Question 15

Unions support minimum wage laws because an increase in the minimum wage

Accepted Answer

A)  increases the supply of union labor. 
B)  decreases the supply of union labor. 
C)  increases the demand for union labor. 
D)  decreases the demand for union labor. 
A)  increases the supply of union labor. 
B)  decreases the supply of union labor. 
C)  increases the demand for union labor. 
D)  decreases the demand for union labor.

Question 16

If the interest rate is 7.5 percent, the present value of $500 to be received three years from today is $477.50.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following activities increases the demand for union labor?

Accepted Answer

A)  a decrease in the minimum wage 
B)  an increase in immigration 
C)  additional job training for union members 
D)  an increased desire by consumers to buy imports 
A)  a decrease in the minimum wage 
B)  an increase in immigration 
C)  additional job training for union members 
D)  an increased desire by consumers to buy imports

Question 18

-Pointy Stone State Park is the sole employer of naturalists in the area. The table above provides information about the supply of naturalists and the value of marginal product of labor for naturalists. On the last naturalist hired, Pointy Stone State Park will earn a profit of

Accepted Answer

A)  zero. 
B)  $100 per week. 
C)  $150 per week. 
D)  $200 per week. 
A)  zero. 
B)  $100 per week. 
C)  $150 per week. 
D)  $200 per week.

Question 19

-Doug's Dog Grooming is a perfectly competitive firm charging $5 per dog grooming. Doug's Dog Grooming has the total and marginal product of labor schedules in the above table and can hire workers from a perfectly competitive labor market for $15 per hour. What is the value of marginal product of the third worker?

Accepted Answer

A)  $5 
B)  $25 
C)  $15 
D)  $375 
A)  $5 
B)  $25 
C)  $15 
D)  $375

Question 20

A monopsony pays a wage rate ________ the marginal cost of labor and ________ the value of marginal product of labor.

Accepted Answer

A)  equal to; equal to 
B)  lower than; lower than 
C)  equal to; lower than 
D)  lower than; equal to 
A)  equal to; equal to 
B)  lower than; lower than 
C)  equal to; lower than 
D)  lower than; equal to

Exam 18: Markets for Factors of Production

The supply of land is

-The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. How much labor will the firm hire if the market wage is $300 per day?

New technology

An example of a bilateral monopoly would be when a union

If the wage that a competitive firm must pay its workers exceeds their value of marginal product, the firm will

For a monopsony the labor supply curve

If a monopsony must negotiate with a union, then the wage will probably be

-A worker has a marginal product of 15 units a day, each of which can be sold for $10. Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer.

If a union successfully restricts the supply of labor to the firm but the union has no effect on the demand for labor, then the

When Sam's Scarves uses 2 knitting machines and employs 3 people, total revenue is $330 a day. When Sam's Scarves uses 2 knitting machines and employs 4 people, total revenue is $360 a day. The value of marginal product of the third worker is ________.

-Consider the monopsony in the above figure. The monopsony will hire ________ hours per week.

If Delores wanted to make sure that she had $3,000 a year from now, how much would she need to save now if the interest rate is 7 percent?

-Consider the monopsony in the above figure. The 200th hour of labor creates how much added revenue per hour for the monopsony?

-If there is a monopsony operating in the labor market illustrated in the figure above, the equilibrium wage and quantity of labor hired is

Unions support minimum wage laws because an increase in the minimum wage

If the interest rate is 7.5 percent, the present value of $500 to be received three years from today is $477.50.

Which of the following activities increases the demand for union labor?

-Pointy Stone State Park is the sole employer of naturalists in the area. The table above provides information about the supply of naturalists and the value of marginal product of labor for naturalists. On the last naturalist hired, Pointy Stone State Park will earn a profit of

A monopsony pays a wage rate ________ the marginal cost of labor and ________ the value of marginal product of labor.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

A monopsony pays a wage rate the marginal cost of labor and the value of marginal product of labor.