Question 1

If a chair can be sold for $20 and it takes a worker two hours to make a chair,the marginal revenue product of this worker is

Accepted Answer

A) $5 per hour. 
B) $10 per hour. 
C) $20 per hour. 
D) $2 per hour. 
A) $5 per hour. 
B) $10 per hour. 
C) $20 per hour. 
D) $2 per hour.

Question 2

Table 30.2 $$\begin{array} { | c | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Nurrber of } \
\text { stylists (per } \
\text { week) }
\end{array} & \begin{array} { c } 
\text { Total output } \
\text { (per week) }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { physical } \
\text { product } \
\text { (output per } \
\text { stylist) }
\end{array} & \begin{array} { c } 
\text { Total revenue } \
\text { (dollars per } \
\text { week) }
\end{array} & \begin{array} { c } 
\text { Marginal revenue } \
\text { product (dollars } \
\text { per stylist) }
\end{array} \
\hline 0 & \text { c } & \ldots & & \ldots \
\hline 1 & 6 t & & \
\hline 2 & 80 & & \
\hline 3 & 9 d & & \
\hline 4 & 94 & & \
\hline
\end{array}$$ Table 30.2 shows how many hairstyling appointments a hair salon can schedule per week based on the number of stylists.In the spaces provided,compute the marginal physical product (MPP)of the hair stylists,total revenue,and marginal revenue product of the stylists,assuming that a hair stylist charges $60 per appointment.What is the marginal physical product of the fourth hairstylist?

Accepted Answer

A) 5,400. 
B) 90. 
C) 22.5. 
D) 0. 
A) 5,400. 
B) 90. 
C) 22.5. 
D) 0.

Question 3

The marginal revenue product sets an upper limit to the wage rate an employer will pay.

Accepted Answer

A) True 
 B)False

Question 4

A firm's demand for labor is referred to as a derived demand because

Accepted Answer

A) It is derived from the MPP of labor. 
B) It is derived from the demand for the product that the labor is producing. 
C) The quantity of goods and services labor can purchase is derived from the wages labor receives from the firm. 
D) It is derived from the supply of labor. 
A) It is derived from the MPP of labor. 
B) It is derived from the demand for the product that the labor is producing. 
C) The quantity of goods and services labor can purchase is derived from the wages labor receives from the firm. 
D) It is derived from the supply of labor.

Question 5

If there is an increase in immigration into a specific labor market,then

Accepted Answer

A) The demand for labor will increase,and the equilibrium wage rises. 
B) The supply of labor shifts leftward,and the equilibrium wage will increase. 
C) The equilibrium wage will rise,and the quantity of labor hired will fall. 
D) The supply of labor shifts rightward,and the equilibrium wage will fall. 
A) The demand for labor will increase,and the equilibrium wage rises. 
B) The supply of labor shifts leftward,and the equilibrium wage will increase. 
C) The equilibrium wage will rise,and the quantity of labor hired will fall. 
D) The supply of labor shifts rightward,and the equilibrium wage will fall.

Question 6

In general,it can be said that leisure is a "free good."

Accepted Answer

A) True 
 B)False

Question 7

The opportunity cost of working is the

Accepted Answer

A) Wage rate. 
B) Earnings that could be made in an alternative job. 
C) Amount of leisure time that must be given up in the process. 
D) Amount of consumption that is made possible. 
A) Wage rate. 
B) Earnings that could be made in an alternative job. 
C) Amount of leisure time that must be given up in the process. 
D) Amount of consumption that is made possible.

Question 8

If the MPP of an additional unit of labor is 4 units per hour,product price is constant at $5 per unit,and the wage rate is $19 per hour,then

Accepted Answer

A) The additional unit of labor should be employed. 
B) The additional unit of labor should not be employed because it costs more than it is worth. 
C) The employer should lower wages and accept less employment of labor. 
D) Product price must be reduced if profits are to be made. 
A) The additional unit of labor should be employed. 
B) The additional unit of labor should not be employed because it costs more than it is worth. 
C) The employer should lower wages and accept less employment of labor. 
D) Product price must be reduced if profits are to be made.

Question 9

The opportunity cost of working is the amount of leisure time that must be given up in order to work.

Accepted Answer

A) True 
 B)False

Question 10

The marginal physical product of a factor of production is equal to the additional revenue generated from employing one additional unit of the factor.

Accepted Answer

A) True 
 B)False

Question 11

The marginal revenue product establishes

Accepted Answer

A) An upper limit to the wage rate an employer is willing and able to pay. 
B) A lower limit to profit on the sale of a unit of output. 
C) A lower limit to the productivity of a worker. 
D) A lower limit to the wage rate demands of laborers. 
A) An upper limit to the wage rate an employer is willing and able to pay. 
B) A lower limit to profit on the sale of a unit of output. 
C) A lower limit to the productivity of a worker. 
D) A lower limit to the wage rate demands of laborers.

Question 12

When the MPP of labor is zero,ceteris paribus,

Accepted Answer

A) Employment can be increased only by offering a higher wage rate. 
B) No further increases in output can be achieved by using additional units of labor. 
C) MRP is at a maximum. 
D) Additional units of labor must be employed because other factors of production are being wasted. 
A) Employment can be increased only by offering a higher wage rate. 
B) No further increases in output can be achieved by using additional units of labor. 
C) MRP is at a maximum. 
D) Additional units of labor must be employed because other factors of production are being wasted.

Question 13

The determinants of the market supply of labor include all of the following except

Accepted Answer

A) Taxes. 
B) The market wage rate. 
C) Income and wealth. 
D) Prices of consumer goods. 
A) Taxes. 
B) The market wage rate. 
C) Income and wealth. 
D) Prices of consumer goods.

Question 14

The number of people employed in the competitive market depicted in Figure 30.2 at a wage of $20.00 per hour is

Accepted Answer

A) 0. 
B) 160. 
C) 180. 
D) 192. 
A) 0. 
B) 160. 
C) 180. 
D) 192.

Question 15

Which of the following is not true about the demand for factors of production?

Accepted Answer

A) It is derived from the demand for the goods and services the firm produces. 
B) It is a function of diminishing marginal physical product. 
C) It depends on the firm's expected sales and output. 
D) It is a function of the elasticity of supply. 
A) It is derived from the demand for the goods and services the firm produces. 
B) It is a function of diminishing marginal physical product. 
C) It depends on the firm's expected sales and output. 
D) It is a function of the elasticity of supply.

Question 16

The most cost-efficient input is the one that can produce the most revenue per unit of input.

Accepted Answer

A) True 
 B)False

Question 17

When a labor supply curve is backward-bending,the elasticity of labor supply in the backward-bending portion is

Accepted Answer

A) Negative. 
B) Positive but less than 1. 
C) Greater than 1. 
D) Zero. 
A) Negative. 
B) Positive but less than 1. 
C) Greater than 1. 
D) Zero.

Exam 30: The Labor Market

If a chair can be sold for $20 and it takes a worker two hours to make a chair,the marginal revenue product of this worker is

The marginal revenue product sets an upper limit to the wage rate an employer will pay.

A firm's demand for labor is referred to as a derived demand because

If there is an increase in immigration into a specific labor market,then

In general,it can be said that leisure is a "free good."

The opportunity cost of working is the

If the MPP of an additional unit of labor is 4 units per hour,product price is constant at $5 per unit,and the wage rate is $19 per hour,then

The opportunity cost of working is the amount of leisure time that must be given up in order to work.

The marginal physical product of a factor of production is equal to the additional revenue generated from employing one additional unit of the factor.

The marginal revenue product establishes

When the MPP of labor is zero,ceteris paribus,

The determinants of the market supply of labor include all of the following except

The number of people employed in the competitive market depicted in Figure 30.2 at a wage of $20.00 per hour is

Which of the following is not true about the demand for factors of production?

The most cost-efficient input is the one that can produce the most revenue per unit of input.

When a labor supply curve is backward-bending,the elasticity of labor supply in the backward-bending portion is

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

National Income Accounting

Unemployment

Inflation

The Business Cycle

Aggregate Demand

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty

Filters