Question 1

One reason the supply of carpenters is greater than the supply of physicians is because:

Accepted Answer

A)  carpenters demand less income. 
B)  physicians do not belong to a union. 
C)  of differences in human capital. 
D)  carpenters belong to unions. 
A)  carpenters demand less income. 
B)  physicians do not belong to a union. 
C)  of differences in human capital. 
D)  carpenters belong to unions.

Question 2

One reason the supply of carpenters is greater than the supply of physicians is because:

Accepted Answer

A)  physicians do not belong to a union. 
B)  carpenters demand less income. 
C)  carpenters belong to unions. 
D)  none of the above. 
A)  physicians do not belong to a union. 
B)  carpenters demand less income. 
C)  carpenters belong to unions. 
D)  none of the above.

Question 3

Suppose a previously competitive labor market turns into a monopsony. The labor supply curve faced by the new monopsonist is:

Accepted Answer

A)  above the labor supply curve under perfect competition. 
B)  the market supply curve of labor. 
C)  below the labor supply curve under perfect competition. 
D)  changed because workers are now more willing to supply labor. 
E)  perfectly horizontal. 
A)  above the labor supply curve under perfect competition. 
B)  the market supply curve of labor. 
C)  below the labor supply curve under perfect competition. 
D)  changed because workers are now more willing to supply labor. 
E)  perfectly horizontal.

Question 4

If the market price of bicycle frames is $500, and frame welders earn a wage of $50, how many welders will be hired?

Accepted Answer

A)  10. 
B)  More than 10. 
C)  Fewer than 10. 
D)  Hiring will stop when the MP is 10. 
E)  Hiring will stop when the MP is 0.1. 
A)  10. 
B)  More than 10. 
C)  Fewer than 10. 
D)  Hiring will stop when the MP is 10. 
E)  Hiring will stop when the MP is 0.1.

Question 5

A firm's demand curve for labor coincides with the marginal factor cost of labor curve.

Accepted Answer

A) True 
 B)False

Question 6

An apple orchard currently hires 10 workers. The owner estimates that hiring an additional worker would increase apple yields by 20 bushels per day. The price of apples is $15 per bushel. The owner should hire the extra worker if the wage rate is no greater than:

Accepted Answer

A)  $50 per day. 
B)  $150 per day. 
C)  $200 per day. 
D)  $300 per day. 
A)  $50 per day. 
B)  $150 per day. 
C)  $200 per day. 
D)  $300 per day.

Question 7

If product price increases, then:

Accepted Answer

A)  MP will increase. 
B)  MFC will increase. 
C)  MRP will increase. 
D)  MP will decrease. 
A)  MP will increase. 
B)  MFC will increase. 
C)  MRP will increase. 
D)  MP will decrease.

Question 8

If the wage rate is fixed at a certain level, the:

Accepted Answer

A)  labor supply curve is horizontal. 
B)  labor supply is a straight upward sloping line. 
C)  MP must be constant. 
D)  labor supply will increase at an increasing rate. 
E)  labor supply will increase at a decreasing rate. 
A)  labor supply curve is horizontal. 
B)  labor supply is a straight upward sloping line. 
C)  MP must be constant. 
D)  labor supply will increase at an increasing rate. 
E)  labor supply will increase at a decreasing rate.

Question 9

An increase in the demand for a product will shift the demand curve for labor producing the product to the left.

Accepted Answer

A) True 
 B)False

Question 10

If the MRP is less than the wage, the firm should hire more labor.

Accepted Answer

A) True 
 B)False

Question 11

The demand for a factor of production depends on the:

Accepted Answer

A)  supply of the factor. 
B)  supply of other factors of production. 
C)  demand for other factors of production. 
D)  demand for the products that it helps to produce. 
A)  supply of the factor. 
B)  supply of other factors of production. 
C)  demand for other factors of production. 
D)  demand for the products that it helps to produce.

Question 12

Which of the following statements concerning the supply of labor is true?

Accepted Answer

A)  The wage rate has no effect on the supply of labor. 
B)  The labor supply curve is downward sloping. 
C)  The supply of labor is determined by the prevailing wage rate. 
D)  The typical labor supply curve is upward sloping. 
A)  The wage rate has no effect on the supply of labor. 
B)  The labor supply curve is downward sloping. 
C)  The supply of labor is determined by the prevailing wage rate. 
D)  The typical labor supply curve is upward sloping.

Question 13

Other things equal, assume consumer demand for children's toys increases. The result is a(n):

Accepted Answer

A)  rightward shift in the market demand for labor curve in the toy industry. 
B)  increase in the marginal revenue product of firms in the toy industry. 
C)  increase in derived demand for workers in the toy industry. 
D)  all of these. 
A)  rightward shift in the market demand for labor curve in the toy industry. 
B)  increase in the marginal revenue product of firms in the toy industry. 
C)  increase in derived demand for workers in the toy industry. 
D)  all of these.

Question 14

Exhibit 11-12 A monopsonist  
-In Exhibit 11-12, we know this exhibit shows a monopsonistic labor market because:

Accepted Answer

A)  the MRP curve slopes down. 
B)  the market supply of labor curve is horizontal. 
C)  the MFC curve lies above the supply of labor curve. 
D)  the MRP curve lies below the supply of labor curve. 
E)  wages are below the supply of labor curve. 
A)  the MRP curve slopes down. 
B)  the market supply of labor curve is horizontal. 
C)  the MFC curve lies above the supply of labor curve. 
D)  the MRP curve lies below the supply of labor curve. 
E)  wages are below the supply of labor curve.

Question 15

Exhibit 11-1
Use the information in the accompanying chart to answer the following question(s). The firm hires labor competitively and sells its product in a competitive price-taker market. $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Units of Labor } \
\text { (per day) }
\end{array} & \begin{array} { c } 
\text { T otal Output } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Product } \
\text { Price }
\end{array} \
\hline 1 & 15 & 6 \
2 & 30 & 6 \
3 & 40 & 6 \
4 & 48 & 6 \
5 & 54 & 6 \
6 & 59 & 6 \
7 & 62 & 6 \
\hline
\end{array}$$
-Refer to Exhibit 11-1. If the market wage rate is $25 per day, how many workers should the firm hire if it wants to maximize profits?

Accepted Answer

A)  4. 
B)  5. 
C)  6. 
D)  7. 
A)  4. 
B)  5. 
C)  6. 
D)  7.

Question 16

Suppose there are 100 identical firms producing package delivery services. One of the firms finds that when it has to pay a wage rate of $7, it hires 20 delivery people. The firm charges an average price of $10 to deliver a package. From this information, we know that the package delivery industry is hiring a total of:

Accepted Answer

A)  100 workers. 
B)  200 workers. 
C)  700 workers. 
D)  2,000 workers. 
E)  10,000 workers. 
A)  100 workers. 
B)  200 workers. 
C)  700 workers. 
D)  2,000 workers. 
E)  10,000 workers.

Question 17

In a competitive labor market, marginal revenue product equals marginal product times the wage rate.

Accepted Answer

A) True 
 B)False

Question 18

Schleppsi, a soft drink maker, is a monopsonist in the county where it manufactures all of the Diet Schleppsi it produces. Suppose the current daily labor cost to the firm is $35,000 with 99 workers and the total wage cost with 100 workers would be $36,000. What will the market wage be if Schleppsi hires the 100th worker?

Accepted Answer

A)  $35. 
B)  $36. 
C)  $100. 
D)  $350. 
E)  $360. 
A)  $35. 
B)  $36. 
C)  $100. 
D)  $350. 
E)  $360.

Question 19

Marginal revenue product is defined as the extra:

Accepted Answer

A)  output a firm would receive after hiring one more unit of resource. 
B)  cost of hiring one more unit of resource 
C)  revenue earned by selling one more unit of product. 
D)  revenue earned by hiring one more unit of resource 
E)  output received by spending one more dollar on resources 
A)  output a firm would receive after hiring one more unit of resource. 
B)  cost of hiring one more unit of resource 
C)  revenue earned by selling one more unit of product. 
D)  revenue earned by hiring one more unit of resource 
E)  output received by spending one more dollar on resources

Question 20

If the price of labor falls, we can expect:

Accepted Answer

A)  demand for labor will increase. 
B)  quantity demanded of labor will increase. 
C)  demand for labor will decrease. 
D)  quantity demanded of labor will decrease. 
E)  marginal factor cost to rise in a competitive market. 
A)  demand for labor will increase. 
B)  quantity demanded of labor will increase. 
C)  demand for labor will decrease. 
D)  quantity demanded of labor will decrease. 
E)  marginal factor cost to rise in a competitive market.

One reason the supply of carpenters is greater than the supply of physicians is because:

One reason the supply of carpenters is greater than the supply of physicians is because:

Suppose a previously competitive labor market turns into a monopsony. The labor supply curve faced by the new monopsonist is:

If the market price of bicycle frames is $500, and frame welders earn a wage of $50, how many welders will be hired?

A firm's demand curve for labor coincides with the marginal factor cost of labor curve.

An apple orchard currently hires 10 workers. The owner estimates that hiring an additional worker would increase apple yields by 20 bushels per day. The price of apples is $15 per bushel. The owner should hire the extra worker if the wage rate is no greater than:

If product price increases, then:

If the wage rate is fixed at a certain level, the:

An increase in the demand for a product will shift the demand curve for labor producing the product to the left.

If the MRP is less than the wage, the firm should hire more labor.

The demand for a factor of production depends on the:

Which of the following statements concerning the supply of labor is true?

Other things equal, assume consumer demand for children's toys increases. The result is a(n):

Exhibit 11-12 A monopsonist -In Exhibit 11-12, we know this exhibit shows a monopsonistic labor market because:

In a competitive labor market, marginal revenue product equals marginal product times the wage rate.

Marginal revenue product is defined as the extra:

If the price of labor falls, we can expect:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

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Exam 11: Labor Markets

One reason the supply of carpenters is greater than the supply of physicians is because:

One reason the supply of carpenters is greater than the supply of physicians is because:

Suppose a previously competitive labor market turns into a monopsony. The labor supply curve faced by the new monopsonist is:

If the market price of bicycle frames is $500, and frame welders earn a wage of $50, how many welders will be hired?

A firm's demand curve for labor coincides with the marginal factor cost of labor curve.

An apple orchard currently hires 10 workers. The owner estimates that hiring an additional worker would increase apple yields by 20 bushels per day. The price of apples is $15 per bushel. The owner should hire the extra worker if the wage rate is no greater than:

If product price increases, then:

If the wage rate is fixed at a certain level, the:

An increase in the demand for a product will shift the demand curve for labor producing the product to the left.

If the MRP is less than the wage, the firm should hire more labor.

The demand for a factor of production depends on the:

Which of the following statements concerning the supply of labor is true?

Other things equal, assume consumer demand for children's toys increases. The result is a(n):

Exhibit 11-12 A monopsonist -In Exhibit 11-12, we know this exhibit shows a monopsonistic labor market because:

In a competitive labor market, marginal revenue product equals marginal product times the wage rate.

Marginal revenue product is defined as the extra:

If the price of labor falls, we can expect:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters