Question 1

The marginal revenue product of a resource is:

Accepted Answer

A)  the marginal product of the resource multiplied by the price of the product it helps to produce. 
B)  the price of the product times the price of the resource. 
C)  larger when the product price is smaller. 
D)  larger when the marginal product is smaller. 
A)  the marginal product of the resource multiplied by the price of the product it helps to produce. 
B)  the price of the product times the price of the resource. 
C)  larger when the product price is smaller. 
D)  larger when the marginal product is smaller.

Question 2

Which of the following will decrease the demand for fast-food burger workers' labor?

Accepted Answer

A)  More people start working two jobs and eat more fast food. 
B)  The price of pizza, a substitute for burgers, decreases. 
C)  A new technology allows burgers to be produced faster. 
D)  Workers get additional training that increases productivity. 
E)  Workers form a union and get higher wages. 
A)  More people start working two jobs and eat more fast food. 
B)  The price of pizza, a substitute for burgers, decreases. 
C)  A new technology allows burgers to be produced faster. 
D)  Workers get additional training that increases productivity. 
E)  Workers form a union and get higher wages.

Question 3

The marginal cost of labor for a perfectly competitive firm is given by:

Accepted Answer

A)  the change in total revenue that results from employing an additional worker. 
B)  the market wage rate. 
C)  its marginal revenue product curve. 
D)  the demand curve for labor. 
E)  the marginal product of labor. 
A)  the change in total revenue that results from employing an additional worker. 
B)  the market wage rate. 
C)  its marginal revenue product curve. 
D)  the demand curve for labor. 
E)  the marginal product of labor.

Question 4

Exhibit 11-4 Supply and demand curves for food servers  
-In Exhibit 11-4, the equilibrium wage and the number of food servers employed per day, respectively, are:

Accepted Answer

A)  $2.00 and 5,000. 
B)  $4.00 and 10,000. 
C)  $6.00 and 15,000 
D)  $8.00 and 20,000. 
A)  $2.00 and 5,000. 
B)  $4.00 and 10,000. 
C)  $6.00 and 15,000 
D)  $8.00 and 20,000.

Question 5

The marginal revenue product curve is:

Accepted Answer

A)  c and d are correct. 
B)  c and e are correct. 
C)  given by the marginal product curve multiplied by the price of the good. 
D)  the marginal contribution of an additional worker to firm's revenues. 
E)  the change in total cost that results from employing an additional worker. 
A)  c and d are correct. 
B)  c and e are correct. 
C)  given by the marginal product curve multiplied by the price of the good. 
D)  the marginal contribution of an additional worker to firm's revenues. 
E)  the change in total cost that results from employing an additional worker.

Question 6

Exhibit 11-13 A monopsonist's supply and marginal revenue product data $$\begin{array} { | c | c | c | } 
\hline \text { Workers } & \text { Wage Rate } & \text { MRP } \
\hline 1 & \$ 8 & \$ 50 \
2 & 9 & 25 \
3 & 10 & 20 \
4 & 11 & 17 \
5 & 12 & 16 \
6 & 13 & 13 \
\hline
\end{array}$$
-Use Exhibit 11-13. What wage rate will the monopsonist pay the workers?

Accepted Answer

A)  $11. 
B)  $13. 
C)  $12. 
D)  $16. 
E)  0. 
A)  $11. 
B)  $13. 
C)  $12. 
D)  $16. 
E)  0.

Question 7

If the MRP of labor decreases, labor:

Accepted Answer

A)  demand will decrease. 
B)  demand will increase. 
C)  supply will increase. 
D)  supply will decrease. 
E)  demand and supply will be unaffected. 
A)  demand will decrease. 
B)  demand will increase. 
C)  supply will increase. 
D)  supply will decrease. 
E)  demand and supply will be unaffected.

Question 8

An improvement in technology that increases the marginal product will shift the demand for labor curve to the right.

Accepted Answer

A) True 
 B)False

Question 9

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 wage required to hire 12 employees is equal to:

Accepted Answer

A)  $5.80. 
B)  $6.00. 
C)  $6.50. 
D)  $6.80. 
E)  $7.00. 
A)  $5.80. 
B)  $6.00. 
C)  $6.50. 
D)  $6.80. 
E)  $7.00.

Question 10

A decrease in the marginal product of labor would be represented by a(n):

Accepted Answer

A)  increase in labor demand. 
B)  decrease in labor demand. 
C)  increase in the quantity demanded of labor. 
D)  decrease in the quantity demanded of labor. 
E)  increase in wages. 
A)  increase in labor demand. 
B)  decrease in labor demand. 
C)  increase in the quantity demanded of labor. 
D)  decrease in the quantity demanded of labor. 
E)  increase in wages.

Question 11

Suppose a monopsonist currently employs 100 workers at a wage of $400 per week. If the firm wants to expand employment to 110 workers, and the 110th worker will only work for $450 per week, what is the approximate marginal factor cost of the 110th worker?

Accepted Answer

A)  $450 per week. 
B)  $5,500 per week. 
C)  $950 per week. 
D)  $9,500 per week. 
E)  $49,500 per week. 
A)  $450 per week. 
B)  $5,500 per week. 
C)  $950 per week. 
D)  $9,500 per week. 
E)  $49,500 per week.

Question 12

According to the economic theory of labor markets, if unions are successful in raising wages, with no accompanying increase in labor productivity, then which of the following is true?

Accepted Answer

A)  The quantity of labor demanded by profit-maximizing firms will decline. 
B)  The quantity of labor demanded by profit-maximizing firms will increase. 
C)  The quantity of labor supplied by workers will decline. 
D)  There will be a shortage of labor in the unionized labor market. 
A)  The quantity of labor demanded by profit-maximizing firms will decline. 
B)  The quantity of labor demanded by profit-maximizing firms will increase. 
C)  The quantity of labor supplied by workers will decline. 
D)  There will be a shortage of labor in the unionized labor market.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

If cats become a more popular pet in the United States than dogs, what can we expect to happen to the market for cat food workers?

Accepted Answer

A)  MP increases. 
B)  MRP increases. 
C)  MP decreases. 
D)  MRP decreases. 
E)  Wage decreases. 
A)  MP increases. 
B)  MRP increases. 
C)  MP decreases. 
D)  MRP decreases. 
E)  Wage decreases.

Question 15

A monopsonist will hire fewer workers than will be hired in a competitive labor market.

Accepted Answer

A) True 
 B)False

Question 16

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 $5, the MRP of the 4th worker is equal to:

Accepted Answer

A)  $35. 
B)  $125. 
C)  $25. 
D)  $175. 
E)  $100. 
A)  $35. 
B)  $125. 
C)  $25. 
D)  $175. 
E)  $100.

Question 17

Monopsony means a product market with single buyer.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following can shift the labor demand curve to the right?

Accepted Answer

A)  Decrease in product price. 
B)  Increase in wages. 
C)  Decrease in wages. 
D)  Decrease in the MP. 
E)  Increase in productivity. 
A)  Decrease in product price. 
B)  Increase in wages. 
C)  Decrease in wages. 
D)  Decrease in the MP. 
E)  Increase in productivity.

Question 19

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, the marginal product of the 4th unit of labor is equal to:

Accepted Answer

A)  80. 
B)  45. 
C)  35. 
D)  100. 
E)  20. 
A)  80. 
B)  45. 
C)  35. 
D)  100. 
E)  20.

Question 20

A union can influence the equilibrium wage rate by:

Accepted Answer

A)  collective bargaining. 
B)  featherbedding. 
C)  lobbying for legislation to reduce immigration. 
D)  all of these. 
A)  collective bargaining. 
B)  featherbedding. 
C)  lobbying for legislation to reduce immigration. 
D)  all of these.

The marginal revenue product of a resource is:

Which of the following will decrease the demand for fast-food burger workers' labor?

The marginal cost of labor for a perfectly competitive firm is given by:

Exhibit 11-4 Supply and demand curves for food servers -In Exhibit 11-4, the equilibrium wage and the number of food servers employed per day, respectively, are:

The marginal revenue product curve is:

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 -Use Exhibit 11-13. What wage rate will the monopsonist pay the workers?

If the MRP of labor decreases, labor:

An improvement in technology that increases the marginal product will shift the demand for labor curve to the right.

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 wage required to hire 12 employees is equal to:

A decrease in the marginal product of labor would be represented by a(n):

Suppose a monopsonist currently employs 100 workers at a wage of $400 per week. If the firm wants to expand employment to 110 workers, and the 110th worker will only work for $450 per week, what is the approximate marginal factor cost of the 110th worker?

According to the economic theory of labor markets, if unions are successful in raising wages, with no accompanying increase in labor productivity, then which of the following is true?

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

If cats become a more popular pet in the United States than dogs, what can we expect to happen to the market for cat food workers?

A monopsonist will hire fewer workers than will be hired in a competitive labor market.

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 $5, the MRP of the 4th worker is equal to:

Monopsony means a product market with single buyer.

Which of the following can shift the labor demand curve to the right?

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, the marginal product of the 4th unit of labor is equal to:

A union can influence the equilibrium wage rate by:

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

The marginal revenue product of a resource is:

Which of the following will decrease the demand for fast-food burger workers' labor?

The marginal cost of labor for a perfectly competitive firm is given by:

Exhibit 11-4 Supply and demand curves for food servers -In Exhibit 11-4, the equilibrium wage and the number of food servers employed per day, respectively, are:

The marginal revenue product curve is:

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 -Use Exhibit 11-13. What wage rate will the monopsonist pay the workers?

If the MRP of labor decreases, labor:

An improvement in technology that increases the marginal product will shift the demand for labor curve to the right.

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 wage required to hire 12 employees is equal to:

A decrease in the marginal product of labor would be represented by a(n):

Suppose a monopsonist currently employs 100 workers at a wage of $400 per week. If the firm wants to expand employment to 110 workers, and the 110th worker will only work for $450 per week, what is the approximate marginal factor cost of the 110th worker?

According to the economic theory of labor markets, if unions are successful in raising wages, with no accompanying increase in labor productivity, then which of the following is true?

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

If cats become a more popular pet in the United States than dogs, what can we expect to happen to the market for cat food workers?

A monopsonist will hire fewer workers than will be hired in a competitive labor market.

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 $5, the MRP of the 4th worker is equal to:

Monopsony means a product market with single buyer.

Which of the following can shift the labor demand curve to the right?

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, the marginal product of the 4th unit of labor is equal to:

A union can influence the equilibrium wage rate by:

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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