Question 1

Suppose a firm can hire 100 workers at $8.00 per hour but must pay $8.05 per hour to hire 101 workers. Marginal factor cost (MFC) for the 101st worker is approximately equal to:

Accepted Answer

A)  $8.00. 
B)  $8.05. 
C)  $13.05. 
D)  $13.00. 
A)  $8.00. 
B)  $8.05. 
C)  $13.05. 
D)  $13.00.

Question 2

Harold Brown runs a company that sells encyclopedia sets for $250 each. When he employs 10 workers, they can sell 60 sets per week, while only 54 sets are sold when 9 workers are employed. What is the weekly marginal revenue product of the tenth worker?

Accepted Answer

A)  $250. 
B)  $1,250. 
C)  $1,500. 
D)  $15,000. 
A)  $250. 
B)  $1,250. 
C)  $1,500. 
D)  $15,000.

Question 3

If the demand for the finished product increases, the:

Accepted Answer

A)  demand for the resources will increase. 
B)  demand for the resources will decrease. 
C)  marginal factor cost will increase. 
D)  marginal factor cost will decrease. 
E)  MP will increase. 
A)  demand for the resources will increase. 
B)  demand for the resources will decrease. 
C)  marginal factor cost will increase. 
D)  marginal factor cost will decrease. 
E)  MP will increase.

Question 4

Exhibit 11-14 Labor cost data for a monopsonist $$\begin{array} { | c | c | } 
\hline \text { Wage Rate } & \begin{array} { c } 
\text { Number of } \
\text { Workers }
\end{array} \
\hline \$ 0 & 0 \
5 & 10 \
8 & 20 \
12 & 30 \
16 & 40 \
\hline
\end{array}$$
-In Exhibit 11-14, the marginal factor cost when the monopsonist goes from 30 to 40 workers hired is:

Accepted Answer

A)  $28. 
B)  $4. 
C)  $64. 
D)  $36. 
E)  $10. 
A)  $28. 
B)  $4. 
C)  $64. 
D)  $36. 
E)  $10.

Question 5

A union can influence the demand for labor by:

Accepted Answer

A)  requiring union fees. 
B)  raising union fees. 
C)  effective advertising that convinces customers to buy the "union label." 
D)  all of these. 
A)  requiring union fees. 
B)  raising union fees. 
C)  effective advertising that convinces customers to buy the "union label." 
D)  all of these.

Question 6

A worker's accumulated investment in education, training, experience, and health is called:

Accepted Answer

A)  derived labor demand. 
B)  collective entrepreneurship. 
C)  seniority. 
D)  human capital. 
A)  derived labor demand. 
B)  collective entrepreneurship. 
C)  seniority. 
D)  human capital.

Question 7

Exhibit 11-4 Supply and demand curves for food servers  
-In Exhibit 11-4, suppose that in the interest of boosting incomes of the working poor, Congress imposes a minimum wage of $6.00 per hour. This minimum wage rate creates a(n):

Accepted Answer

A)  new labor market equilibrium. 
B)  excess demand for labor of 10 thousand food servers. 
C)  excess supply of labor of food servers. 
D)  situation of full employment for food servers. 
A)  new labor market equilibrium. 
B)  excess demand for labor of 10 thousand food servers. 
C)  excess supply of labor of food servers. 
D)  situation of full employment for food servers.

Question 8

An individual firm in a competitive labor market faces a(n):

Accepted Answer

A)  horizontal labor supply curve. 
B)  backward-bending labor supply curve. 
C)  downward-sloping labor supply curve. 
D)  upward-sloping labor supply curve. 
E)  vertical labor supply curve. 
A)  horizontal labor supply curve. 
B)  backward-bending labor supply curve. 
C)  downward-sloping labor supply curve. 
D)  upward-sloping labor supply curve. 
E)  vertical labor supply curve.

Question 9

A monopsony is a:

Accepted Answer

A)  large number of buyers. 
B)  large seller. 
C)  single seller. 
D)  single buyer. 
A)  large number of buyers. 
B)  large seller. 
C)  single seller. 
D)  single buyer.

Question 10

The following chart indicates the reductions in total losses due to theft if a jewelry store hires additional security guards. $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Number } \
\text { of Guards }
\end{array} & \begin{array} { c } 
\text { Dollar Value of } \
\text { Thefts Prevented }
\end{array} \
\hline 1 & 150 \
2 & 240 \
3 & 310 \
4 & 360 \
5 & 400 \
6 & 430 \
\hline
\end{array}$$ If the security guards can be hired for $45 per day, how many guards should the shop hire?

Accepted Answer

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

Question 11

Firms should hire additional units of a resource as long as the:

Accepted Answer

A)  marginal product of the resource exceeds the price of the resource multiplied by the quantity of output produced. 
B)  marginal product of the resource is less than the price of the resource. 
C)  price of the output produced is positive. 
D)  marginal revenue product of the resource exceeds the cost of an additional unit of the resource. 
A)  marginal product of the resource exceeds the price of the resource multiplied by the quantity of output produced. 
B)  marginal product of the resource is less than the price of the resource. 
C)  price of the output produced is positive. 
D)  marginal revenue product of the resource exceeds the cost of an additional unit of the resource.

Question 12

Which of the following statements is true?

Accepted Answer

A)  A monopsony is the only employer of a factor of production. 
B)  A monopsony will pay workers a higher wage and employ fewer workers than a competitive labor market. 
C)  A monopsony has a marginal factor cost curve which lies below its supply curve of labor. 
D)  Unions are becoming a greater influence in American labor markets. 
E)  All of these. 
A)  A monopsony is the only employer of a factor of production. 
B)  A monopsony will pay workers a higher wage and employ fewer workers than a competitive labor market. 
C)  A monopsony has a marginal factor cost curve which lies below its supply curve of labor. 
D)  Unions are becoming a greater influence in American labor markets. 
E)  All of these.

Question 13

The demand for labor curve is identical to the:

Accepted Answer

A)  total wage cost curve. 
B)  marginal resource curve. 
C)  total revenue curve. 
D)  marginal revenue product curve. 
E)  marginal revenue curve. 
A)  total wage cost curve. 
B)  marginal resource curve. 
C)  total revenue curve. 
D)  marginal revenue product curve. 
E)  marginal revenue curve.

Question 14

Exhibit 11-14 Labor cost data for a monopsonist $$\begin{array} { | c | c | } 
\hline \text { Wage Rate } & \begin{array} { c } 
\text { Number of } \
\text { Workers }
\end{array} \
\hline \$ 0 & 0 \
5 & 10 \
8 & 20 \
12 & 30 \
16 & 40 \
\hline
\end{array}$$
-In Exhibit 11-14, when the monopsonist hires 30 workers, total wage cost is:

Accepted Answer

A)  $12. 
B)  $30. 
C)  $360. 
D)  $480. 
E)  $640. 
A)  $12. 
B)  $30. 
C)  $360. 
D)  $480. 
E)  $640.

Question 15

Which of the following statements is true?

Accepted Answer

A)  Derived demand for labor depends on the demand for the product labor produces. 
B)  Unions can either increase demand or decrease the supply of labor. 
C)  Investment in human capital is expected to increase the demand for those workers. 
D)  All of these. 
A)  Derived demand for labor depends on the demand for the product labor produces. 
B)  Unions can either increase demand or decrease the supply of labor. 
C)  Investment in human capital is expected to increase the demand for those workers. 
D)  All of these.

Question 16

Exhibit 11-14 Labor cost data for a monopsonist $$\begin{array} { | c | c | } 
\hline \text { Wage Rate } & \begin{array} { c } 
\text { Number of } \
\text { Workers }
\end{array} \
\hline \$ 0 & 0 \
5 & 10 \
8 & 20 \
12 & 30 \
16 & 40 \
\hline
\end{array}$$
-In Exhibit 11-14, the monopsonist will maximize profits by hiring how many workers?

Accepted Answer

A)  10. 
B)  20. 
C)  30. 
D)  40. 
E)  Unable to determine from the information given. 
A)  10. 
B)  20. 
C)  30. 
D)  40. 
E)  Unable to determine from the information given.

Question 17

The labor supply curve facing a monopsonist is:

Accepted Answer

A)  downward sloping. 
B)  upward sloping. 
C)  a horizontal line. 
D)  backward bending. 
E)  a vertical line. 
A)  downward sloping. 
B)  upward sloping. 
C)  a horizontal line. 
D)  backward bending. 
E)  a vertical line.

Question 18

The increase in a firm's total revenues resulting from hiring an additional unit of labor is known as the marginal:

Accepted Answer

A)  product. 
B)  revenue product. 
C)  cost. 
D)  none of these. 
A)  product. 
B)  revenue product. 
C)  cost. 
D)  none of these.

Question 19

Exhibit 11-9 A labor market  
-If the labor market shown in Exhibit 11-9 is competitive, the wage rate and number of workers employed will be determined at point: ​

Accepted Answer

A)  A. 
B)  Y. 
C)  C. 
D)  Z. 
E)  X. 
A)  A. 
B)  Y. 
C)  C. 
D)  Z. 
E)  X.

Question 20

A monopsony is defined as a monopoly that has to negotiate with a labor union.

Accepted Answer

A) True 
 B)False

Suppose a firm can hire 100 workers at $8.00 per hour but must pay $8.05 per hour to hire 101 workers. Marginal factor cost (MFC) for the 101st worker is approximately equal to:

Harold Brown runs a company that sells encyclopedia sets for $250 each. When he employs 10 workers, they can sell 60 sets per week, while only 54 sets are sold when 9 workers are employed. What is the weekly marginal revenue product of the tenth worker?

If the demand for the finished product increases, the:

Exhibit 11-14 Labor cost data for a monopsonist Wage Rate Number of Workers \ 0 0 5 10 8 20 12 30 16 40 -In Exhibit 11-14, the marginal factor cost when the monopsonist goes from 30 to 40 workers hired is:

A union can influence the demand for labor by:

A worker's accumulated investment in education, training, experience, and health is called:

Exhibit 11-4 Supply and demand curves for food servers -In Exhibit 11-4, suppose that in the interest of boosting incomes of the working poor, Congress imposes a minimum wage of $6.00 per hour. This minimum wage rate creates a(n):

An individual firm in a competitive labor market faces a(n):

A monopsony is a:

Firms should hire additional units of a resource as long as the:

Which of the following statements is true?

The demand for labor curve is identical to the:

Exhibit 11-14 Labor cost data for a monopsonist Wage Rate Number of Workers \ 0 0 5 10 8 20 12 30 16 40 -In Exhibit 11-14, when the monopsonist hires 30 workers, total wage cost is:

Which of the following statements is true?

Exhibit 11-14 Labor cost data for a monopsonist Wage Rate Number of Workers \ 0 0 5 10 8 20 12 30 16 40 -In Exhibit 11-14, the monopsonist will maximize profits by hiring how many workers?

The labor supply curve facing a monopsonist is:

The increase in a firm's total revenues resulting from hiring an additional unit of labor is known as the marginal:

Exhibit 11-9 A labor market -If the labor market shown in Exhibit 11-9 is competitive, the wage rate and number of workers employed will be determined at point:

A monopsony is defined as a monopoly that has to negotiate with a labor union.

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

Exam 11: Labor Markets

Suppose a firm can hire 100 workers at $8.00 per hour but must pay $8.05 per hour to hire 101 workers. Marginal factor cost (MFC) for the 101st worker is approximately equal to:

Harold Brown runs a company that sells encyclopedia sets for $250 each. When he employs 10 workers, they can sell 60 sets per week, while only 54 sets are sold when 9 workers are employed. What is the weekly marginal revenue product of the tenth worker?

If the demand for the finished product increases, the:

Exhibit 11-14 Labor cost data for a monopsonist Wage Rate Number of Workers \ 0 0 5 10 8 20 12 30 16 40 -In Exhibit 11-14, the marginal factor cost when the monopsonist goes from 30 to 40 workers hired is:

A union can influence the demand for labor by:

A worker's accumulated investment in education, training, experience, and health is called:

Exhibit 11-4 Supply and demand curves for food servers -In Exhibit 11-4, suppose that in the interest of boosting incomes of the working poor, Congress imposes a minimum wage of $6.00 per hour. This minimum wage rate creates a(n):

An individual firm in a competitive labor market faces a(n):

A monopsony is a:

Firms should hire additional units of a resource as long as the:

Which of the following statements is true?

The demand for labor curve is identical to the:

Exhibit 11-14 Labor cost data for a monopsonist Wage Rate Number of Workers \ 0 0 5 10 8 20 12 30 16 40 -In Exhibit 11-14, when the monopsonist hires 30 workers, total wage cost is:

Which of the following statements is true?

Exhibit 11-14 Labor cost data for a monopsonist Wage Rate Number of Workers \ 0 0 5 10 8 20 12 30 16 40 -In Exhibit 11-14, the monopsonist will maximize profits by hiring how many workers?

The labor supply curve facing a monopsonist is:

The increase in a firm's total revenues resulting from hiring an additional unit of labor is known as the marginal:

Exhibit 11-9 A labor market -If the labor market shown in Exhibit 11-9 is competitive, the wage rate and number of workers employed will be determined at point: ​

A monopsony is defined as a monopoly that has to negotiate with a labor union.

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

Exhibit 11-9 A labor market -If the labor market shown in Exhibit 11-9 is competitive, the wage rate and number of workers employed will be determined at point: