Question 1

The reservation wage of labour is

Accepted Answer

A) the wage below which the labourer will be willing to work. 
B) the wage above which the worker would be willing to retire. 
C) the wage rate at which the firm would find it profitable to hire labour. 
D) the wage rate that makes it necessary for the firm to shut down rather than pay this wage to labour. 
E) the wage rate above which the worker would be willing to supply labour to the market. 
A) the wage below which the labourer will be willing to work. 
B) the wage above which the worker would be willing to retire. 
C) the wage rate at which the firm would find it profitable to hire labour. 
D) the wage rate that makes it necessary for the firm to shut down rather than pay this wage to labour. 
E) the wage rate above which the worker would be willing to supply labour to the market.

Question 2

Use the figure below to answer the following questions.
   
Figure 18.3.1
-Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve,the labour supply curve,and the marginal cost of labour curve.If this labour market is competitive,the quantity of labour employed is

Accepted Answer

A) zero hours. 
B) 50 hours. 
C) 75 hours. 
D) 100 hours. 
E) greater than 100 hours. 
A) zero hours. 
B) 50 hours. 
C) 75 hours. 
D) 100 hours. 
E) greater than 100 hours.

Question 3

Which of the following would unions be least likely to support?

Accepted Answer

A) an increase in the minimum wage 
B) immigration restrictions 
C) increasing the value of marginal product of their workers 
D) increasing demand for the goods their workers produce 
E) reducing barriers to imports 
A) an increase in the minimum wage 
B) immigration restrictions 
C) increasing the value of marginal product of their workers 
D) increasing demand for the goods their workers produce 
E) reducing barriers to imports

Question 4

The income effect of a higher wage is defined as

Accepted Answer

A) the increased income workers must be paid to be willing to work more. 
B) the increased prices of consumer goods that result from increased worker incomes. 
C) the increased demand for leisure that results from increased worker incomes. 
D) the increased workers' purchasing power that results from increased worker incomes. 
E) all of the above. 
A) the increased income workers must be paid to be willing to work more. 
B) the increased prices of consumer goods that result from increased worker incomes. 
C) the increased demand for leisure that results from increased worker incomes. 
D) the increased workers' purchasing power that results from increased worker incomes. 
E) all of the above.

Question 5

Use the table below to answer the following questions.
   
Table 18.3.1
-Refer to Table 18.3.1.Table 18.3.1 gives information about the labour market in Lantis,a community in which the labour market is perfectly competitive.The equilibrium wage rate is ________ an hour and the quantity of labour employed is ________ hours per day.

Accepted Answer

A) $25;600 
B) $25;200 
C) $15;400 
D) $5;200 
E) $5;600 
A) $25;600 
B) $25;200 
C) $15;400 
D) $5;200 
E) $5;600

Question 6

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 $5 a unit,what is the profit-maximizing number of workers if the wage rate is $30?

Accepted Answer

A) 1 
B) 3 
C) 5 
D) 6 
E) 7 
A) 1 
B) 3 
C) 5 
D) 6 
E) 7

Question 7

Choose the statement that is correct.

Accepted Answer

A) Labour services are the physical and mental work effort that people supply to produce goods and services. 
B) A labour market is a collection of people and firms who trade labour services. 
C) The price of labour services is the wage rate. 
D) Most labour services are traded on a contract, called a job. 
E) all of the above. 
A) Labour services are the physical and mental work effort that people supply to produce goods and services. 
B) A labour market is a collection of people and firms who trade labour services. 
C) The price of labour services is the wage rate. 
D) Most labour services are traded on a contract, called a job. 
E) all of the above.

Question 8

In the short run,the market supply of land is

Accepted Answer

A) relatively elastic. 
B) relatively inelastic. 
C) perfectly elastic. 
D) perfectly inelastic. 
E) either elastic or inelastic depending on the productivity of the land. 
A) relatively elastic. 
B) relatively inelastic. 
C) perfectly elastic. 
D) perfectly inelastic. 
E) either elastic or inelastic depending on the productivity of the land.

Question 9

Coal is an example of

Accepted Answer

A) a nonrenewable natural resource. 
B) a renewable natural resource. 
C) capital. 
D) a common resource. 
A) a nonrenewable natural resource. 
B) a renewable natural resource. 
C) capital. 
D) a common resource.

Question 10

The demand for a factor of production is

Accepted Answer

A) a determined demand. 
B) a derived demand. 
C) a kinked demand. 
D) an insatiable demand. 
E) a desperate demand. 
A) a determined demand. 
B) a derived demand. 
C) a kinked demand. 
D) an insatiable demand. 
E) a desperate demand.

Question 11

Use the figure below to answer the following questions.
   
Figure 18.3.1
-Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve,the labour supply curve,and the marginal cost of labour curve.Suppose the government passes a minimum wage law that prohibits anyone from hiring labour at less than $6.50 per hour.The monopsonist will hire

Accepted Answer

A) 50 hours of labour. 
B) 75 hours of labour. 
C) 62.5 hours of labour. 
D) 100 hours of labour. 
E) 125 hours of labour. 
A) 50 hours of labour. 
B) 75 hours of labour. 
C) 62.5 hours of labour. 
D) 100 hours of labour. 
E) 125 hours of labour.

Question 12

A decrease in the price of a firm's output

Accepted Answer

A) decreases the supply of labour. 
B) increases the supply of labour. 
C) increases the value of marginal product of labour. 
D) decreases the quantity of labour demanded. 
E) decreases the value of marginal product of labour. 
A) decreases the supply of labour. 
B) increases the supply of labour. 
C) increases the value of marginal product of labour. 
D) decreases the quantity of labour demanded. 
E) decreases the value of marginal product of labour.

Question 13

Suppose a gift shop in Corner Brook Newfoundland hires workers to personalize ornaments for Christmas.The store sells the personalized ornaments for $6 each.The value of marginal product of this store's fourth worker is $60.The marginal product of the fourth worker is

Accepted Answer

A) 6 ornaments. 
B) 10 ornaments. 
C) 60 ornaments. 
D) 360 ornaments. 
E) 90 ornaments. 
A) 6 ornaments. 
B) 10 ornaments. 
C) 60 ornaments. 
D) 360 ornaments. 
E) 90 ornaments.

Question 14

If the desire for leisure increased,the wage rate would

Accepted Answer

A) rise and employment would fall. 
B) rise and employment would rise. 
C) fall and employment would fall. 
D) fall and employment would rise. 
E) fall and employment would rise or fall. 
A) rise and employment would fall. 
B) rise and employment would rise. 
C) fall and employment would fall. 
D) fall and employment would rise. 
E) fall and employment would rise or fall.

Question 15

Water from the Mackenzie River is an example of

Accepted Answer

A) a nonrenewable natural resource. 
B) a natural resource that can be used repeatedly. 
C) capital. 
D) a static resource. 
E) a capital service. 
A) a nonrenewable natural resource. 
B) a natural resource that can be used repeatedly. 
C) capital. 
D) a static resource. 
E) a capital service.

Question 16

If the present value of $500 to be received in one year is $463,the interest rate is

Accepted Answer

A) 5 percent per year. 
B) 8 percent per year. 
C) 10 percent per year. 
D) 20.8 percent per year. 
E) 37 percent per year. 
A) 5 percent per year. 
B) 8 percent per year. 
C) 10 percent per year. 
D) 20.8 percent per year. 
E) 37 percent per year.

Question 17

To increase the demand for union labour,unions do all of the following except support

Accepted Answer

A) increases in the minimum wage. 
B) increases in import restrictions. 
C) immigration restrictions. 
D) an increase in the supply of foreign workers. 
E) training schemes and apprenticeship programs. 
A) increases in the minimum wage. 
B) increases in import restrictions. 
C) immigration restrictions. 
D) an increase in the supply of foreign workers. 
E) training schemes and apprenticeship programs.

Question 18

A firm's value of marginal product of labour curve is also its

Accepted Answer

A) marginal cost curve of labour. 
B) demand curve for labour. 
C) supply curve of labour. 
D) supply curve of output. 
E) marginal product curve. 
A) marginal cost curve of labour. 
B) demand curve for labour. 
C) supply curve of labour. 
D) supply curve of output. 
E) marginal product curve.

Question 19

Use the figure below to answer the following questions.
   
Figure 18.3.1
-Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve,the labour supply curve,and the marginal cost of labour curve.If this labour market is controlled by a monopsony,then the monopsonist

Accepted Answer

A) pays a wage rate that is greater than the value of marginal product of labour. 
B) pays a wage rate exactly equal to the value of marginal product of labour. 
C) pays a wage rate that is less than the value of marginal product of labour. 
D) employs more labour hours per week than in a competitive labour market. 
E) pays a wage equal to the marginal cost of labour. 
A) pays a wage rate that is greater than the value of marginal product of labour. 
B) pays a wage rate exactly equal to the value of marginal product of labour. 
C) pays a wage rate that is less than the value of marginal product of labour. 
D) employs more labour hours per week than in a competitive labour market. 
E) pays a wage equal to the marginal cost of labour.

Exam 18: Markets for Factors of Production

The reservation wage of labour is

Use the figure below to answer the following questions. Figure 18.3.1 -Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve,the labour supply curve,and the marginal cost of labour curve.If this labour market is competitive,the quantity of labour employed is

Which of the following would unions be least likely to support?

The income effect of a higher wage is defined as

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 $5 a unit,what is the profit-maximizing number of workers if the wage rate is $30?

Choose the statement that is correct.

In the short run,the market supply of land is

Coal is an example of

The demand for a factor of production is

A decrease in the price of a firm's output

Suppose a gift shop in Corner Brook Newfoundland hires workers to personalize ornaments for Christmas.The store sells the personalized ornaments for $6 each.The value of marginal product of this store's fourth worker is $60.The marginal product of the fourth worker is

If the desire for leisure increased,the wage rate would

Water from the Mackenzie River is an example of

If the present value of $500 to be received in one year is $463,the interest rate is

To increase the demand for union labour,unions do all of the following except support

A firm's value of marginal product of labour curve is also its

Use the figure below to answer the following questions. Figure 18.3.1 -Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve,the labour supply curve,and the marginal cost of labour curve.If this labour market is controlled by a monopsony,then the monopsonist

What Is Economics?

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