Question 1

Exhibit 11-2 Labor and output data $$\begin{array} { | c | c | } 
\hline \text { Labor } & \text { Output } \
\hline 0 & 0 \
1 & 20 \
2 & 45 \
3 & 80 \
4 & 100 \
5 & 110 \
\hline
\end{array}$$
-In Exhibit 11-2, if product price is fixed at $8, the MRP of the 5th worker is equal to:

Accepted Answer

A)  $50. 
B)  $80. 
C)  $10. 
D)  $100 
E)  $160. 
A)  $50. 
B)  $80. 
C)  $10. 
D)  $100 
E)  $160.

Question 2

The monopsonistic employer hires more workers until marginal:

Accepted Answer

A)  physical product is zero. 
B)  revenue product equals marginal factor cost. 
C)  revenue product equals the wage. 
D)  physical product equals the wage. 
E)  physical product equals marginal factor cost 
A)  physical product is zero. 
B)  revenue product equals marginal factor cost. 
C)  revenue product equals the wage. 
D)  physical product equals the wage. 
E)  physical product equals marginal factor cost

Question 3

A monopsony owner believes that hiring an additional worker would increase the company's revenue by $150 per day. We can conclude that the monopsony pays its workers:

Accepted Answer

A)  more than $150 per day. 
B)  exactly $150 per day. 
C)  less than $150 per day. 
D)  exactly $75 per day. 
A)  more than $150 per day. 
B)  exactly $150 per day. 
C)  less than $150 per day. 
D)  exactly $75 per day.

Question 4

Troll Corporation sells dolls for $10.00 each in a market that is perfectly competitive. Increasing the number of workers from 100 to 101 would cause output to rise from 500 to 550 dolls per day. The marginal revenue product for the 101st worker is:

Accepted Answer

A)  $10.00. 
B)  $500. 
C)  $5,000. 
D)  $1,010. 
A)  $10.00. 
B)  $500. 
C)  $5,000. 
D)  $1,010.

Question 5

Monopsony means a labor market with a single buyer.

Accepted Answer

A) True 
 B)False

Question 6

If the marginal product of labor is always positive, the total revenue will grow with each additional worker. Firms do not continuously hire new workers because:

Accepted Answer

A)  there isn't enough room in the factory. 
B)  there isn't an infinite number of workers. 
C)  wages would have to increase. 
D)  they stop when MRP = wage 
E)  marginal revenue product will become negative. 
A)  there isn't enough room in the factory. 
B)  there isn't an infinite number of workers. 
C)  wages would have to increase. 
D)  they stop when MRP = wage 
E)  marginal revenue product will become negative.

Question 7

Exhibit 11-11 Labor wage and cost data $$\begin{array} { | c | c | c | c | } 
\hline \text { Labor } & \text { Wage } & \text { TWC } & \text { MFC } \
\hline 10 & \$ & \$ 50.00 & \$ \
11 & 5.80 & & \
12 & & & 17.80 \
13 & & 102.70 & \
14 & & 126.00 & \
15 & & & 46.50 \
\hline
\end{array}$$
-In Exhibit 11-11, the total wage cost of hiring 15 employees is equal to:

Accepted Answer

A)  $11.50. 
B)  $46.50. 
C)  $172.50. 
D)  $126.00. 
E)  $23.30. 
A)  $11.50. 
B)  $46.50. 
C)  $172.50. 
D)  $126.00. 
E)  $23.30.

Question 8

The optimal number of workers to be hired by a firm operating in a competitive labor market is where:

Accepted Answer

A)  P = MRP. 
B)  MP = MRP. 
C)  MRP = w. 
D)  P = w. 
E)  TWC = w. 
A)  P = MRP. 
B)  MP = MRP. 
C)  MRP = w. 
D)  P = w. 
E)  TWC = w.

Question 9

For a monopsonist, the marginal factor cost is always:

Accepted Answer

A)  equal to the wage rate. 
B)  less than the wage rate. 
C)  greater than the wage rate 
D)  the same as the labor supply. 
E)  the same as the labor demand. 
A)  equal to the wage rate. 
B)  less than the wage rate. 
C)  greater than the wage rate 
D)  the same as the labor supply. 
E)  the same as the labor demand.

Question 10

Explain why wage rates might rise at Joe's Quik-Print Shop if Joe replaces his aging copy machines with state-of-the-art copy machines.

Accepted Answer

The improvement in technology will boost

Question 11

A monopsonist hires the amount of labor where the marginal revenue product of labor equals the:

Accepted Answer

A)  price of the monopsonist's product. 
B)  wage rate. 
C)  marginal factor cost of labor. 
D)  marginal product of labor. 
A)  price of the monopsonist's product. 
B)  wage rate. 
C)  marginal factor cost of labor. 
D)  marginal product of labor.

Question 12

Exhibit 11-5 Sally's labor supply data
​
​ $$\begin{array} { | r | c | } 
\hline \text { Wage } & \begin{array} { c } 
\text { Quantity of } \
\text { Labor Supplied (hours) }
\end{array} \
\hline \$ 0 & 0 \
5 & 20 \
10 & 30 \
50 & 40 \
100 & 35 \
\hline
\end{array}$$
-Exhibit 11-6 A perfectly competitive labor market $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity } \
\text { of Labor } \
\text { (thousands) }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { Revenue Product }
\end{array} & \begin{array} { c } 
\text { Total } \
\text { Labor Cost }
\end{array} \
\hline  5 & \$ 25.00 & \$ 5.00 \
10 & 20.00 & 10.00 \
15 & 15.00 & 15.00 \
20 & 10.00 & 20.00 \
25 & 5.00 & 25.00
\end{array}$$ In Exhibit 11-6, at what wage rate will the firms stop hiring these workers?

Accepted Answer

A)  $25.00. 
B)  $20.00. 
C)  $15.00. 
D)  $10.00. 
E)  0. 
A)  $25.00. 
B)  $20.00. 
C)  $15.00. 
D)  $10.00. 
E)  0.

Question 13

Alan Jones owns a company that sells life insurance. When he employs 10 salespersons his firm sells $200,000 worth of contracts per week, and when he employs 11 salespersons, total revenue is $210,000. The marginal revenue product of the 11th salesperson is:

Accepted Answer

A)  $410,000. 
B)  $10,000. 
C)  $20,000. 
D)  $210,000. 
A)  $410,000. 
B)  $10,000. 
C)  $20,000. 
D)  $210,000.

Question 14

Compared to a competitive input market, a monopsonist will hire:

Accepted Answer

A)  more and pay a higher input price. 
B)  less but pay a higher input price. 
C)  more but pay a lower input price. 
D)  less and pay a lower input price. 
A)  more and pay a higher input price. 
B)  less but pay a higher input price. 
C)  more but pay a lower input price. 
D)  less and pay a lower input price.

Question 15

A monopoly is a sole ____, and a monopsonist is a sole ____.

Accepted Answer

A)  buyer in a product market; seller in a product market 
B)  seller in a product market; seller in a labor market 
C)  buyer in a product market; seller in a labor market 
D)  seller in a product market; buyer in a labor market 
E)  seller in a labor market; buyer in a product market 
A)  buyer in a product market; seller in a product market 
B)  seller in a product market; seller in a labor market 
C)  buyer in a product market; seller in a labor market 
D)  seller in a product market; buyer in a labor market 
E)  seller in a labor market; buyer in a product market

Question 16

Exhibit 11-13 A monopsonist's supply and marginal revenue product data $$\begin{array} { | c | c | c | } 
\hline \text { Workers } & \text { Wage Rate } & \text { MRP } \
\hline 1 & \$ 8 & \$ 50 \
2 & 9 & 25 \
3 & 10 & 20 \
4 & 11 & 17 \
5 & 12 & 16 \
6 & 13 & 13 \
\hline
\end{array}$$
-In Exhibit 11-13, what is the marginal factor cost when the monopsonist hires 4 workers?

Accepted Answer

A)  $11. 
B)  $16. 
C)  $14. 
D)  $17. 
E)  $12. 
A)  $11. 
B)  $16. 
C)  $14. 
D)  $17. 
E)  $12.

Question 17

A monopsonist's marginal factor cost (MFC) curve lies above its supply curve because the firm must:

Accepted Answer

A)  lower the factor price to hire more. 
B)  increase the price of its product to sell more. 
C)  increase the factor price to hire more. 
D)  lower the product price to sell more. 
A)  lower the factor price to hire more. 
B)  increase the price of its product to sell more. 
C)  increase the factor price to hire more. 
D)  lower the product price to sell more.

Question 18

Describe the decision for a perfectly competitive employer in determining the profit maximizing quantity of labor to employ.

Accepted Answer

The profit maximizing quantity of labor

Question 19

Exhibit 11-10 Labor and wage rate data $$\begin{array} { | c | c | } 
\hline \text { Labor } & \text { Wage } \
\hline 6 & \$ 12 \
7 & 13 \
8 & 14 \
9 & 15 \
10 & 16 \
\hline
\end{array}$$
-In Exhibit 11-10, the marginal factor cost of the 8th employee is:

Accepted Answer

A)  $14. 
B)  $13. 
C)  $21. 
D)  $23. 
E)  $112 
A)  $14. 
B)  $13. 
C)  $21. 
D)  $23. 
E)  $112

Question 20

The marginal revenue product of labor is:

Accepted Answer

A)  how much labor can be purchased with the revenue from the sale of one more unit of the good. 
B)  how much does the marginal revenue change when you add more labor. 
C)  the same as the marginal revenue product of capital in equilibrium. 
D)  determined by the wage rate. 
E)  the contribution to total revenue made by the marginal laborer. 
A)  how much labor can be purchased with the revenue from the sale of one more unit of the good. 
B)  how much does the marginal revenue change when you add more labor. 
C)  the same as the marginal revenue product of capital in equilibrium. 
D)  determined by the wage rate. 
E)  the contribution to total revenue made by the marginal laborer.

Exhibit 11-2 Labor and output data Labor Output 0 0 1 20 2 45 3 80 4 100 5 110 -In Exhibit 11-2, if product price is fixed at $8, the MRP of the 5th worker is equal to:

The monopsonistic employer hires more workers until marginal:

A monopsony owner believes that hiring an additional worker would increase the company's revenue by $150 per day. We can conclude that the monopsony pays its workers:

Troll Corporation sells dolls for $10.00 each in a market that is perfectly competitive. Increasing the number of workers from 100 to 101 would cause output to rise from 500 to 550 dolls per day. The marginal revenue product for the 101st worker is:

Monopsony means a labor market with a single buyer.

If the marginal product of labor is always positive, the total revenue will grow with each additional worker. Firms do not continuously hire new workers because:

Exhibit 11-11 Labor wage and cost data Labor Wage TWC MFC 10 \ \ 50.00 \ 11 5.80 12 17.80 13 102.70 14 126.00 15 46.50 -In Exhibit 11-11, the total wage cost of hiring 15 employees is equal to:

The optimal number of workers to be hired by a firm operating in a competitive labor market is where:

For a monopsonist, the marginal factor cost is always:

Explain why wage rates might rise at Joe's Quik-Print Shop if Joe replaces his aging copy machines with state-of-the-art copy machines.

A monopsonist hires the amount of labor where the marginal revenue product of labor equals the:

Alan Jones owns a company that sells life insurance. When he employs 10 salespersons his firm sells $200,000 worth of contracts per week, and when he employs 11 salespersons, total revenue is $210,000. The marginal revenue product of the 11th salesperson is:

Compared to a competitive input market, a monopsonist will hire:

A monopoly is a sole , and a monopsonist is a sole .

Exhibit 11-13 A monopsonist's supply and marginal revenue product data Workers Wage Rate MRP 1 \ 8 \ 50 2 9 25 3 10 20 4 11 17 5 12 16 6 13 13 -In Exhibit 11-13, what is the marginal factor cost when the monopsonist hires 4 workers?

A monopsonist's marginal factor cost (MFC) curve lies above its supply curve because the firm must:

Describe the decision for a perfectly competitive employer in determining the profit maximizing quantity of labor to employ.

Exhibit 11-10 Labor and wage rate data Labor Wage 6 \ 12 7 13 8 14 9 15 10 16 -In Exhibit 11-10, the marginal factor cost of the 8th employee is:

The marginal revenue product of labor is:

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

Exhibit 11-2 Labor and output data Labor Output 0 0 1 20 2 45 3 80 4 100 5 110 -In Exhibit 11-2, if product price is fixed at $8, the MRP of the 5th worker is equal to:

The monopsonistic employer hires more workers until marginal:

A monopsony owner believes that hiring an additional worker would increase the company's revenue by $150 per day. We can conclude that the monopsony pays its workers:

Troll Corporation sells dolls for $10.00 each in a market that is perfectly competitive. Increasing the number of workers from 100 to 101 would cause output to rise from 500 to 550 dolls per day. The marginal revenue product for the 101st worker is:

Monopsony means a labor market with a single buyer.

If the marginal product of labor is always positive, the total revenue will grow with each additional worker. Firms do not continuously hire new workers because:

Exhibit 11-11 Labor wage and cost data Labor Wage TWC MFC 10 \ \ 50.00 \ 11 5.80 12 17.80 13 102.70 14 126.00 15 46.50 -In Exhibit 11-11, the total wage cost of hiring 15 employees is equal to:

The optimal number of workers to be hired by a firm operating in a competitive labor market is where:

For a monopsonist, the marginal factor cost is always:

Explain why wage rates might rise at Joe's Quik-Print Shop if Joe replaces his aging copy machines with state-of-the-art copy machines.

A monopsonist hires the amount of labor where the marginal revenue product of labor equals the:

Alan Jones owns a company that sells life insurance. When he employs 10 salespersons his firm sells $200,000 worth of contracts per week, and when he employs 11 salespersons, total revenue is $210,000. The marginal revenue product of the 11th salesperson is:

Compared to a competitive input market, a monopsonist will hire:

A monopoly is a sole ____, and a monopsonist is a sole ____.

Exhibit 11-13 A monopsonist's supply and marginal revenue product data Workers Wage Rate MRP 1 \ 8 \ 50 2 9 25 3 10 20 4 11 17 5 12 16 6 13 13 -In Exhibit 11-13, what is the marginal factor cost when the monopsonist hires 4 workers?

A monopsonist's marginal factor cost (MFC) curve lies above its supply curve because the firm must:

Describe the decision for a perfectly competitive employer in determining the profit maximizing quantity of labor to employ.

Exhibit 11-10 Labor and wage rate data Labor Wage 6 \ 12 7 13 8 14 9 15 10 16 -In Exhibit 11-10, the marginal factor cost of the 8th employee is:

The marginal revenue product of labor is:

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

A monopoly is a sole , and a monopsonist is a sole .