Question 1

The Internet is ________ natural resource.Power generated by wind turbines is ________ natural resource.

Accepted Answer

A) not a;a nonrenewable 
B) a renewable;a renewable 
C) a renewable;a nonrenewable 
D) not a;a renewable 
E) not a;not a 
A) not a;a nonrenewable 
B) a renewable;a renewable 
C) a renewable;a nonrenewable 
D) not a;a renewable 
E) not a;not a

Question 2

When the price of a firm's output increases

Accepted Answer

A) the supply of labour increases. 
B) the firm hires less labour. 
C) the marginal product of labour increases. 
D) the firm's demand for labour curve shifts leftward. 
E) the value of marginal product of labour increases. 
A) the supply of labour increases. 
B) the firm hires less labour. 
C) the marginal product of labour increases. 
D) the firm's demand for labour curve shifts leftward. 
E) the value of marginal product of labour increases.

Question 3

The present value of a future payment of money will be higher the

Accepted Answer

A) higher the interest rate or the further in the future the payment. 
B) lower the interest rate or the further in the future the payment. 
C) higher the interest rate or the nearer the date of the future payment. 
D) lower the interest rate or the nearer the date of the future payment. 
E) lower the interest rate, independent of the date of the future payment. 
A) higher the interest rate or the further in the future the payment. 
B) lower the interest rate or the further in the future the payment. 
C) higher the interest rate or the nearer the date of the future payment. 
D) lower the interest rate or the nearer the date of the future payment. 
E) lower the interest rate, independent of the date of the future payment.

Question 4

If the price of the firm's output decreases,the value of marginal product curve

Accepted Answer

A) remains unchanged. 
B) becomes more elastic. 
C) becomes more inelastic. 
D) shifts to the left. 
E) shifts to the right. 
A) remains unchanged. 
B) becomes more elastic. 
C) becomes more inelastic. 
D) shifts to the left. 
E) shifts to the right.

Question 5

Use the figure below to answer the following questions.
   
Figure 18.3.2
-If a union and the monopsonist in Figure 18.3.2 agree to bargaining,the outcome is an hourly wage rate

Accepted Answer

A) of $7. 
B) between $4 and $7. 
C) between $4 and $9. 
D) between $7 and $9. 
E) of $9. 
A) of $7. 
B) between $4 and $7. 
C) between $4 and $9. 
D) between $7 and $9. 
E) of $9.

Question 6

All of the following statements are correct except

Accepted Answer

A) if the price of oil is expected to rise at a rate equal to the interest rate, demand increases and supply increases. 
B) the interest rate is the opportunity cost of holding an oil inventory. 
C) if the price of oil is expected to rise at a rate that exceeds the interest rate, demand increases and supply decreases. 
D) according to the Hotelling Principle, the price of a nonrenewable natural resource is expected to rise at a rate equal to the interest rate. 
E) the marginal cost of extraction of oil is the fundamental determinant of supply. 
A) if the price of oil is expected to rise at a rate equal to the interest rate, demand increases and supply increases. 
B) the interest rate is the opportunity cost of holding an oil inventory. 
C) if the price of oil is expected to rise at a rate that exceeds the interest rate, demand increases and supply decreases. 
D) according to the Hotelling Principle, the price of a nonrenewable natural resource is expected to rise at a rate equal to the interest rate. 
E) the marginal cost of extraction of oil is the fundamental determinant of supply.

Question 7

Choose the statement that is incorrect.

Accepted Answer

A) Entrepreneurship is a factor of production. 
B) Entrepreneurs receive the profit or bear the loss that results from their business decisions. 
C) Entrepreneurship consists of all the gifts of nature. 
D) Entrepreneurial services are traded in markets. 
E) Both C and D are incorrect. 
A) Entrepreneurship is a factor of production. 
B) Entrepreneurs receive the profit or bear the loss that results from their business decisions. 
C) Entrepreneurship consists of all the gifts of nature. 
D) Entrepreneurial services are traded in markets. 
E) Both C and D are incorrect.

Question 8

If the wage rate decreases,the income effect gives a household the incentive to

Accepted Answer

A) raise its reservation wage. 
B) increase leisure and decrease work 
C) increase work and decrease leisure 
D) increase both work and leisure. 
E) decrease both work and leisure. 
A) raise its reservation wage. 
B) increase leisure and decrease work 
C) increase work and decrease leisure 
D) increase both work and leisure. 
E) decrease both work and leisure.

Question 9

The ________ of a future amount of money is the amount that,if invested today,will grow to be as large as that future amount when the interest it earns is taken into account.

Accepted Answer

A) current value 
B) future value 
C) present value 
D) market value 
E) profit value 
A) current value 
B) future value 
C) present value 
D) market value 
E) profit value

Question 10

Use the table below to answer the following questions.
Table 18.2.1
  
-Refer to Table 18.2.1.If the firm can sell all the output it wants for the price of $10 a unit,what is the profit-maximizing number of workers if the wage rate is $30?

Accepted Answer

A) 1 
B) 5 
C) 6 
D) 8 
E) 9 
A) 1 
B) 5 
C) 6 
D) 8 
E) 9

Question 11

The demand for the services of labour ________ a derived demand and the demand for the services of land ________ a derived demand.

Accepted Answer

A) is not;is not 
B) is not;is 
C) is;is not 
D) is;is 
E) sometimes is and sometimes is not;sometimes is and sometimes is not 
A) is not;is not 
B) is not;is 
C) is;is not 
D) is;is 
E) sometimes is and sometimes is not;sometimes is and sometimes is not

Question 12

The value of marginal product of labour is the revenue

Accepted Answer

A) generated by selling an additional unit of output. 
B) needed to hire an additional unit of labour. 
C) generated by the employment of an additional unit of labour. 
D) needed to cover the cost of producing an additional unit of output. 
E) generated to cover the cost of hiring an extra unit of labour. 
A) generated by selling an additional unit of output. 
B) needed to hire an additional unit of labour. 
C) generated by the employment of an additional unit of labour. 
D) needed to cover the cost of producing an additional unit of output. 
E) generated to cover the cost of hiring an extra unit of labour.

Question 13

A profit-maximizing firm will continue to hire labour until the

Accepted Answer

A) wage rate equals the last worker's marginal product. 
B) last worker's value of marginal product is maximized. 
C) last worker's value of marginal product is negative. 
D) wage rate equals the last worker's value of marginal product. 
E) last worker's value of marginal product equals zero. 
A) wage rate equals the last worker's marginal product. 
B) last worker's value of marginal product is maximized. 
C) last worker's value of marginal product is negative. 
D) wage rate equals the last worker's value of marginal product. 
E) last worker's value of marginal product equals zero.

Question 14

Use the table below to answer the following questions.
Table 18.2.2
Wendy owns an apple orchard and she employs students
to pick the apples.In an hour they can pick the following amounts:
  
-Refer to Table 18.2.2.If the price of apples is $0.50 per kilogram,the value of marginal product of the 5th student is

Accepted Answer

A) $0.50 an hour. 
B) $72.50 an hour. 
C) $14.50 an hour. 
D) $12.50 an hour. 
E) $10 an hour. 
A) $0.50 an hour. 
B) $72.50 an hour. 
C) $14.50 an hour. 
D) $12.50 an hour. 
E) $10 an hour.

Question 15

Firms hire labour

Accepted Answer

A) to minimize the average cost of the employment of labour. 
B) to exploit workers. 
C) to maximize profit. 
D) because capital is more expensive. 
E) to minimize costs. 
A) to minimize the average cost of the employment of labour. 
B) to exploit workers. 
C) to maximize profit. 
D) because capital is more expensive. 
E) to minimize costs.

Question 16

The demand for labour is a derived demand because it is derived from

Accepted Answer

A) the demand for the output the labour produces. 
B) the supply of labour. 
C) union pressure. 
D) natural law. 
E) years of accumulated capital and technological advances. 
A) the demand for the output the labour produces. 
B) the supply of labour. 
C) union pressure. 
D) natural law. 
E) years of accumulated capital and technological advances.

Question 17

Which of the following is a nonrenewable natural resource?

Accepted Answer

A) coal 
B) land 
C) water 
D) trees 
E) rain 
A) coal 
B) land 
C) water 
D) trees 
E) rain

Question 18

The demand for capital is determined by ________.The demand for land is determined by ________.The supply of ________ is perfectly ________.

Accepted Answer

A) how much capital is renewable and how much is nonrenewable;how much land is renewable and how much is nonrenewable;land;elastic 
B) the value of marginal product of capital;the value of marginal product of land;land;inelastic 
C) how much capital is renewable and how much is nonrenewable;how much land is renewable and how much is nonrenewable;capital;elastic 
D) the value of marginal product of capital;the value of marginal product of land;capital;inelastic 
E) the value of marginal product of capital;the value of marginal product of land;land;elastic 
A) how much capital is renewable and how much is nonrenewable;how much land is renewable and how much is nonrenewable;land;elastic 
B) the value of marginal product of capital;the value of marginal product of land;land;inelastic 
C) how much capital is renewable and how much is nonrenewable;how much land is renewable and how much is nonrenewable;capital;elastic 
D) the value of marginal product of capital;the value of marginal product of land;capital;inelastic 
E) the value of marginal product of capital;the value of marginal product of land;land;elastic

Question 19

Mr.Smith's firm is currently hiring 30 workers.The value of marginal product of the last worker is $7.00 per hour.The wage rate is $8.00 per hour.To increase profit,Mr.Smith should

Accepted Answer

A) continue hiring 30 workers because the firm earns a surplus of $1.00 on each worker hired. 
B) increase the price of the firm's product so that the value of marginal product increases to $8.00 per hour. 
C) decrease the price of the firm's product so that the value of marginal product increases to $8.00 per hour. 
D) decrease the number of workers until the value of marginal product of labour equals $8.00. 
E) increase the number of workers until the value of marginal product of labour equals $8.00. 
A) continue hiring 30 workers because the firm earns a surplus of $1.00 on each worker hired. 
B) increase the price of the firm's product so that the value of marginal product increases to $8.00 per hour. 
C) decrease the price of the firm's product so that the value of marginal product increases to $8.00 per hour. 
D) decrease the number of workers until the value of marginal product of labour equals $8.00. 
E) increase the number of workers until the value of marginal product of labour equals $8.00.

Question 20

Choose the statement that is incorrect.

Accepted Answer

A) Capital consists of the tools, instruments, machines, buildings, and other constructions that have been produced in the past and that businesses now use to produce goods and services. 
B) A market for capital services is a rental market. 
C) The services of the capital that a firm owns and operates have an implicit price that arises from depreciation and interest costs. 
D) Capital is a factor of production. 
E) Most capital services are traded in a market. 
A) Capital consists of the tools, instruments, machines, buildings, and other constructions that have been produced in the past and that businesses now use to produce goods and services. 
B) A market for capital services is a rental market. 
C) The services of the capital that a firm owns and operates have an implicit price that arises from depreciation and interest costs. 
D) Capital is a factor of production. 
E) Most capital services are traded in a market.

Exam 18: Markets for Factors of Production

The Internet is ________ natural resource.Power generated by wind turbines is ________ natural resource.

When the price of a firm's output increases

The present value of a future payment of money will be higher the

If the price of the firm's output decreases,the value of marginal product curve

Use the figure below to answer the following questions. Figure 18.3.2 -If a union and the monopsonist in Figure 18.3.2 agree to bargaining,the outcome is an hourly wage rate

All of the following statements are correct except

Choose the statement that is incorrect.

If the wage rate decreases,the income effect gives a household the incentive to

The ________ of a future amount of money is the amount that,if invested today,will grow to be as large as that future amount when the interest it earns is taken into account.

Use the table below to answer the following questions. Table 18.2.1 -Refer to Table 18.2.1.If the firm can sell all the output it wants for the price of $10 a unit,what is the profit-maximizing number of workers if the wage rate is $30?

The demand for the services of labour ________ a derived demand and the demand for the services of land ________ a derived demand.

The value of marginal product of labour is the revenue

A profit-maximizing firm will continue to hire labour until the

Firms hire labour

The demand for labour is a derived demand because it is derived from

Which of the following is a nonrenewable natural resource?

The demand for capital is determined by ________.The demand for land is determined by ________.The supply of ________ is perfectly ________.

Mr.Smith's firm is currently hiring 30 workers.The value of marginal product of the last worker is $7.00 per hour.The wage rate is $8.00 per hour.To increase profit,Mr.Smith should

Choose the statement that is incorrect.

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

Externalities

Public Goods and Common Resources

Economic Inequality

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: The Keynesian Model

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

The Internet is natural resource.Power generated by wind turbines is natural resource.

The demand for the services of labour a derived demand and the demand for the services of land a derived demand.

The demand for capital is determined by .The demand for land is determined by .The supply of is perfectly .