Question 1

In a monopsony labor market, a minimum wage set equal to the competitive market equilibrium wage rate can ________ the wage rate and ________ employment.

Accepted Answer

A)  raise; increase 
B)  raise; decrease 
C)  lower; increase 
D)  lower; decrease 
A)  raise; increase 
B)  raise; decrease 
C)  lower; increase 
D)  lower; decrease

Question 2

A decrease in the price of a firm's output

Accepted Answer

A)  raises the value of marginal product of each unit of labor. 
B)  shifts the firm's demand for labor curve rightward. 
C)  results in the firm increasing the amount of output it produces. 
D)  None of the above is correct. 
A)  raises the value of marginal product of each unit of labor. 
B)  shifts the firm's demand for labor curve rightward. 
C)  results in the firm increasing the amount of output it produces. 
D)  None of the above is correct.

Question 3

A firm's demand for labor curve

Accepted Answer

A)  is the same as its value of marginal product of labor curve. 
B)  shows how many jobs the firm demands at different wage rates. 
C)  shifts rightward when the price of the firm's output falls. 
D)  None of the above answers are correct. 
A)  is the same as its value of marginal product of labor curve. 
B)  shows how many jobs the firm demands at different wage rates. 
C)  shifts rightward when the price of the firm's output falls. 
D)  None of the above answers are correct.

Question 4

-The above table has the total product schedule for Joe's Barber Shop. Joe charges $6 per haircut. The firm's value of marginal product of labor for the third worker is equal to

Accepted Answer

A)  $264. 
B)  $48. 
C)  $8. 
D)  $6. 
A)  $264. 
B)  $48. 
C)  $8. 
D)  $6.

Question 5

According to the Hotelling Principle, the price of an nonrenewable resource

Accepted Answer

A)  falls slowly over time. 
B)  falls at a rate equal to the interest rate. 
C)  rises at a rate equal to the interest rate. 
D)  remains constant over time. 
A)  falls slowly over time. 
B)  falls at a rate equal to the interest rate. 
C)  rises at a rate equal to the interest rate. 
D)  remains constant over time.

Question 6

-The above figure represents the market for teenage workers at fast-food restaurants in Kansas City.
a) What is the equilibrium wage rate and employment?
b) Describe the market at a wage rate of $6 per hour.
c) Describe the market at a wage rate of $12 an hour.
d) How would an increase in the number of young, married college graduates, who tend to eat at fast-food restaurants, affect the figure, the equilibrium wage rate, and employment?

Accepted Answer

a) The equilibrium wage rate is $8 an ho

Question 7

-The above table has the marginal product schedule for a firm. If the firm is a perfect competitor and the price of the product is constant at $2 a unit, complete the table. If the wage rate is $8 an hour, how many workers does the firm hire?

Accepted Answer

@#IMG-DLM& If the wage rate is $8 an hou

Question 8

If a monopsony paid its workers a wage equal to their value of marginal product, it would be maximizing its profit.

Accepted Answer

A) True 
 B)False

Question 9

-In the above figure, what would be the wage paid and quantity of labor employed under competitive market conditions compared to monopsony conditions?

Accepted Answer

A)  W1 and L1 with competition versus W2 and L2 with monopsony 
B)  W2 and L2 with competition versus W1 and L1 with monopsony 
C)  W2 and L2 with competition versus W3 and L1 with monopsony 
D)  W3 and L3 with competition versus W3 and L1 with monopsony 
A)  W1 and L1 with competition versus W2 and L2 with monopsony 
B)  W2 and L2 with competition versus W1 and L1 with monopsony 
C)  W2 and L2 with competition versus W3 and L1 with monopsony 
D)  W3 and L3 with competition versus W3 and L1 with monopsony

Question 10

If the interest rate is 10 percent, the present value of $400 to be received one year from today is about

Accepted Answer

A)  $440. 
B)  $390. 
C)  $364. 
D)  $377. 
A)  $440. 
B)  $390. 
C)  $364. 
D)  $377.

Question 11

The increase in revenue created by hiring one more unit of labor is the

Accepted Answer

A)  marginal product of labor. 
B)  marginal revenue of labor. 
C)  marginal product revenue of labor. 
D)  value of marginal product of labor. 
A)  marginal product of labor. 
B)  marginal revenue of labor. 
C)  marginal product revenue of labor. 
D)  value of marginal product of labor.

Question 12

Americans are always connected today, talking on the phone at home, while driving down the road and while shopping for groceries. But that wasn't always the case. In fact, it wasn't that long ago people had to go through an operator in order to get connected with the person they were trying to reach. How do cell phones impact the labor market for telephone operators?

Accepted Answer

A)  Decreased telephone operators' value of marginal product 
B)  Increased the demand for telephone operators 
C)  Increased the supply for telephone operators 
D)  Decreased the marginal productivity of telephone operators 
A)  Decreased telephone operators' value of marginal product 
B)  Increased the demand for telephone operators 
C)  Increased the supply for telephone operators 
D)  Decreased the marginal productivity of telephone operators

Question 13

For a monopsony, the labor supply curve

Accepted Answer

A)  lies above the MCL curve. 
B)  is the same as the MCL curve. 
C)  lies below the MCL curve. 
D)  is the same as the labor demand curve. 
A)  lies above the MCL curve. 
B)  is the same as the MCL curve. 
C)  lies below the MCL curve. 
D)  is the same as the labor demand curve.

Question 14

When a firm faces a labor supply curve that is upward sloping, the firm must

Accepted Answer

A)  offer a higher wage if it wishes to hire more workers. 
B)  pay a wage that exceeds the value of marginal product. 
C)  pay a wage that does not exceed the minimum wage. 
D)  maximize the amount of labor that it hires. 
A)  offer a higher wage if it wishes to hire more workers. 
B)  pay a wage that exceeds the value of marginal product. 
C)  pay a wage that does not exceed the minimum wage. 
D)  maximize the amount of labor that it hires.

Question 15

-Based on the production and revenue data in the above table, if the wage rate is $35 per worker, how many workers will be hired?

Accepted Answer

A)  5 
B)  4 
C)  3 
D)  2 
A)  5 
B)  4 
C)  3 
D)  2

Question 16

The lowest wage for which a person is willing to supply labor is known as the

Accepted Answer

A)  substitution wage. 
B)  income effect. 
C)  derived wage. 
D)  reservation wage. 
A)  substitution wage. 
B)  income effect. 
C)  derived wage. 
D)  reservation wage.

Question 17

If a firm faces a labor supply curve that is positively sloped, then the marginal cost of labor curve

Accepted Answer

A)  equals the wage rate. 
B)  equals the minimum wage. 
C)  lies above the value of marginal product curve. 
D)  lies above the labor supply curve. 
A)  equals the wage rate. 
B)  equals the minimum wage. 
C)  lies above the value of marginal product curve. 
D)  lies above the labor supply curve.

Question 18

A monopsony is

Accepted Answer

A)  a market in which there is only one producer of a good or service. 
B)  a market in which there is only one producer and one consumer of a good or service. 
C)  a market in which there is only one buyer of a good or service. 
D)  a temporary situation in labor markets when prices are adjusted through the use of collective bargaining. 
A)  a market in which there is only one producer of a good or service. 
B)  a market in which there is only one producer and one consumer of a good or service. 
C)  a market in which there is only one buyer of a good or service. 
D)  a temporary situation in labor markets when prices are adjusted through the use of collective bargaining.

Question 19

Value of marginal product of labor is the ________ when one additional unit of a labor is employed, all other things remaining the same.

Accepted Answer

A)  change in marginal revenue 
B)  change in marginal product 
C)  change in total revenue 
D)  total revenue 
A)  change in marginal revenue 
B)  change in marginal product 
C)  change in total revenue 
D)  total revenue

Question 20

-Based on the production and revenue data in the above table, what is the price of the product?

Accepted Answer

A)  $100 
B)  $10 
C)  $1 
D)  More information is needed to determine the price of the product. 
A)  $100 
B)  $10 
C)  $1 
D)  More information is needed to determine the price of the product.

Exam 18: Markets for Factors of Production

In a monopsony labor market, a minimum wage set equal to the competitive market equilibrium wage rate can ________ the wage rate and ________ employment.

A decrease in the price of a firm's output

A firm's demand for labor curve

-The above table has the total product schedule for Joe's Barber Shop. Joe charges $6 per haircut. The firm's value of marginal product of labor for the third worker is equal to

According to the Hotelling Principle, the price of an nonrenewable resource

-The above table has the marginal product schedule for a firm. If the firm is a perfect competitor and the price of the product is constant at $2 a unit, complete the table. If the wage rate is $8 an hour, how many workers does the firm hire?

If a monopsony paid its workers a wage equal to their value of marginal product, it would be maximizing its profit.

-In the above figure, what would be the wage paid and quantity of labor employed under competitive market conditions compared to monopsony conditions?

If the interest rate is 10 percent, the present value of $400 to be received one year from today is about

The increase in revenue created by hiring one more unit of labor is the

For a monopsony, the labor supply curve

When a firm faces a labor supply curve that is upward sloping, the firm must

-Based on the production and revenue data in the above table, if the wage rate is $35 per worker, how many workers will be hired?

The lowest wage for which a person is willing to supply labor is known as the

If a firm faces a labor supply curve that is positively sloped, then the marginal cost of labor curve

A monopsony is

Value of marginal product of labor is the ________ when one additional unit of a labor is employed, all other things remaining the same.

-Based on the production and revenue data in the above table, what is the price of the product?

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

In a monopsony labor market, a minimum wage set equal to the competitive market equilibrium wage rate can the wage rate and employment.