Question 1

Exhibit 11-4 Supply and demand curves for food servers  
-If the equilibrium wage rate in Exhibit 11-4 increased, the cause could be that:

Accepted Answer

A)  the supply of labor increased. 
B)  the demand for labor decreased. 
C)  either the demand for labor increased or the supply of labor decreased. 
D)  none of these. 
A)  the supply of labor increased. 
B)  the demand for labor decreased. 
C)  either the demand for labor increased or the supply of labor decreased. 
D)  none of these.

Question 2

A firm's demand curve for labor coincides with the:

Accepted Answer

A)  marginal cost curve. 
B)  average cost curve. 
C)  marginal revenue curve. 
D)  marginal revenue product curve. 
A)  marginal cost curve. 
B)  average cost curve. 
C)  marginal revenue curve. 
D)  marginal revenue product curve.

Question 3

A union may attempt to obtain stricter certification requirements or longer apprenticeships. These changes would raise workers' wages because they:

Accepted Answer

A)  create unnecessary unemployment. 
B)  shift in labor supply curve leftward. 
C)  decrease the marginal product of labor. 
D)  reduce management's use of featherbedding. 
A)  create unnecessary unemployment. 
B)  shift in labor supply curve leftward. 
C)  decrease the marginal product of labor. 
D)  reduce management's use of featherbedding.

Question 4

If the wage rate in a monopsonistic industry is $15, the marginal factor cost will be:

Accepted Answer

A)  $0. 
B)  $1. 
C)  $15. 
D)  greater than $15. 
E)  less than $15. 
A)  $0. 
B)  $1. 
C)  $15. 
D)  greater than $15. 
E)  less than $15.

Question 5

To maximize profit, a monopsonist hires workers up to the point at which marginal factor cost (MFC) equals marginal revenue product (MRP).

Accepted Answer

A) True 
 B)False

Question 6

In a competitive labor market, the demand for labor X that produces product Y will increase if the demand for product Y increases.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following best illustrates the concept of derived demand?

Accepted Answer

A)  A decrease in the price of glass causes the demand for plastic to decrease. 
B)  An increase in the demand for bread leads to an increase in the demand for flour. 
C)  A decrease in the price of air travel leads to an increase in the quantity demanded of air travel. 
D)  An increase in the demand for peanut butter leads to an increase in the demand for jelly. 
A)  A decrease in the price of glass causes the demand for plastic to decrease. 
B)  An increase in the demand for bread leads to an increase in the demand for flour. 
C)  A decrease in the price of air travel leads to an increase in the quantity demanded of air travel. 
D)  An increase in the demand for peanut butter leads to an increase in the demand for jelly.

Question 8

Exhibit 11-4 Supply and demand curves for food servers  
-In Exhibit 11-4, assume that both input and output markets are perfectly competitive. If one additional server increases the number of meals sold by four per day and each meal sells for $10, each additional food server will be paid:

Accepted Answer

A)  $16 per day. 
B)  $32 per day. 
C)  $36 per day. 
D)  $40 per day. 
E)  none of these. 
A)  $16 per day. 
B)  $32 per day. 
C)  $36 per day. 
D)  $40 per day. 
E)  none of these.

Question 9

Which of the following is characteristic of the marginal revenue product schedule for a resource?

Accepted Answer

A)  It approximates the firm's demand curve for the resource. 
B)  It measures the change in total revenue resulting from employing an additional unit of the resource. 
C)  It is determined by multiplying the marginal product of the resource by the marginal revenue of the good produced. 
D)  All of these are true. 
A)  It approximates the firm's demand curve for the resource. 
B)  It measures the change in total revenue resulting from employing an additional unit of the resource. 
C)  It is determined by multiplying the marginal product of the resource by the marginal revenue of the good produced. 
D)  All of these are true.

Question 10

Dividing the change in total revenue by the change in labor gives:

Accepted Answer

A)  marginal product of labor. 
B)  marginal revenue product of labor. 
C)  the price of the output. 
D)  demand for the output. 
E)  economic efficiency. 
A)  marginal product of labor. 
B)  marginal revenue product of labor. 
C)  the price of the output. 
D)  demand for the output. 
E)  economic efficiency.

Question 11

Currently, union membership in the United States is about:

Accepted Answer

A)  10 percent. 
B)  15 percent. 
C)  20 percent. 
D)  25 percent. 
A)  10 percent. 
B)  15 percent. 
C)  20 percent. 
D)  25 percent.

Question 12

Exhibit 11-8 A labor market  
-If the labor market shown in Exhibit 11-8 is competitive, the wage rate and number of workers employed will be determined at point: ​

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
E)  F. 
A)  A. 
B)  B. 
C)  C. 
D)  D. 
E)  F.

Question 13

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. What is the marginal revenue product of the fifth unit of labor?

Accepted Answer

A)  $6. 
B)  $36. 
C)  $54. 
D)  $324. 
A)  $6. 
B)  $36. 
C)  $54. 
D)  $324.

Question 14

A monopsony will:

Accepted Answer

A)  hire more workers than a competitive employer. 
B)  pay a higher wage than a competitive employer. 
C)  employ a quantity of labor where the marginal revenue product equals the marginal factor cost. 
D)  all of these. 
A)  hire more workers than a competitive employer. 
B)  pay a higher wage than a competitive employer. 
C)  employ a quantity of labor where the marginal revenue product equals the marginal factor cost. 
D)  all of these.

Question 15

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 marginal factor cost of the 13th employee is equal to:

Accepted Answer

A)  $102.70. 
B)  $17.80. 
C)  $7.90. 
D)  $21.10. 
E)  $17.80 
A)  $102.70. 
B)  $17.80. 
C)  $7.90. 
D)  $21.10. 
E)  $17.80

Question 16

The marginal revenue product can be written as:

Accepted Answer

A)  TR / P. 
B)  w / Q. 
C)  MP × P. 
D)  MRP × P. 
E)  w × L. 
A)  TR / P. 
B)  w / Q. 
C)  MP × P. 
D)  MRP × P. 
E)  w × L.

Question 17

In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product is below the wage rate.

Accepted Answer

A) True 
 B)False

Question 18

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, how many workers will the monopsonist hire?

Accepted Answer

A)  4. 
B)  5. 
C)  3. 
D)  6. 
E)  None. 
A)  4. 
B)  5. 
C)  3. 
D)  6. 
E)  None.

Question 19

Since World War II, the percentage of U.S. workers who are unionized has declined from about 86 percent to its current level of 60 percent.
​

Accepted Answer

A) True 
 B)False

Question 20

In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product exceeds the wage rate.

Accepted Answer

A) True 
 B)False

Exhibit 11-4 Supply and demand curves for food servers -If the equilibrium wage rate in Exhibit 11-4 increased, the cause could be that:

A firm's demand curve for labor coincides with the:

A union may attempt to obtain stricter certification requirements or longer apprenticeships. These changes would raise workers' wages because they:

If the wage rate in a monopsonistic industry is $15, the marginal factor cost will be:

To maximize profit, a monopsonist hires workers up to the point at which marginal factor cost (MFC) equals marginal revenue product (MRP).

In a competitive labor market, the demand for labor X that produces product Y will increase if the demand for product Y increases.

Which of the following best illustrates the concept of derived demand?

Exhibit 11-4 Supply and demand curves for food servers -In Exhibit 11-4, assume that both input and output markets are perfectly competitive. If one additional server increases the number of meals sold by four per day and each meal sells for $10, each additional food server will be paid:

Which of the following is characteristic of the marginal revenue product schedule for a resource?

Dividing the change in total revenue by the change in labor gives:

Currently, union membership in the United States is about:

Exhibit 11-8 A labor market -If the labor market shown in Exhibit 11-8 is competitive, the wage rate and number of workers employed will be determined at point:

A monopsony will:

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 marginal factor cost of the 13th employee is equal to:

The marginal revenue product can be written as:

In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product is below the wage rate.

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, how many workers will the monopsonist hire?

Since World War II, the percentage of U.S. workers who are unionized has declined from about 86 percent to its current level of 60 percent.

In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product exceeds the wage rate.

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 11-4 Supply and demand curves for food servers -If the equilibrium wage rate in Exhibit 11-4 increased, the cause could be that:

A firm's demand curve for labor coincides with the:

A union may attempt to obtain stricter certification requirements or longer apprenticeships. These changes would raise workers' wages because they:

If the wage rate in a monopsonistic industry is $15, the marginal factor cost will be:

To maximize profit, a monopsonist hires workers up to the point at which marginal factor cost (MFC) equals marginal revenue product (MRP).

In a competitive labor market, the demand for labor X that produces product Y will increase if the demand for product Y increases.

Which of the following best illustrates the concept of derived demand?

Exhibit 11-4 Supply and demand curves for food servers -In Exhibit 11-4, assume that both input and output markets are perfectly competitive. If one additional server increases the number of meals sold by four per day and each meal sells for $10, each additional food server will be paid:

Which of the following is characteristic of the marginal revenue product schedule for a resource?

Dividing the change in total revenue by the change in labor gives:

Currently, union membership in the United States is about:

Exhibit 11-8 A labor market -If the labor market shown in Exhibit 11-8 is competitive, the wage rate and number of workers employed will be determined at point: ​

A monopsony will:

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 marginal factor cost of the 13th employee is equal to:

The marginal revenue product can be written as:

In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product is below the wage rate.

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, how many workers will the monopsonist hire?

Since World War II, the percentage of U.S. workers who are unionized has declined from about 86 percent to its current level of 60 percent. ​

In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product exceeds the wage rate.

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 11-8 A labor market -If the labor market shown in Exhibit 11-8 is competitive, the wage rate and number of workers employed will be determined at point:

Since World War II, the percentage of U.S. workers who are unionized has declined from about 86 percent to its current level of 60 percent.