Question 1

A bilateral monopoly is a

Accepted Answer

A)  firm that is a monopsony in a resource market and a monopoly in a product market. 
B)  firm that is a monopoly in two product markets. 
C)  market in which a monopoly discriminates, setting a higher price for affluent customers. 
D)  market in which a monopsony bargains with a monopoly. 
A)  firm that is a monopsony in a resource market and a monopoly in a product market. 
B)  firm that is a monopoly in two product markets. 
C)  market in which a monopoly discriminates, setting a higher price for affluent customers. 
D)  market in which a monopsony bargains with a monopoly.

Question 2

-The above table has the marginal product schedule for a firm. If the firm is a perfect competitor and the price of the product is constant at $2 a unit, complete the table. If the wage rate is $8 an hour, how many workers does the firm hire?

Accepted Answer

@#IMG-DLM& If the wage rate is $8 an hou

Question 3

-Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $4, what is the value of marginal product of the 4th worker?

Accepted Answer

A)  $240 
B)  $70 
C)  $10 
D)  $40 
A)  $240 
B)  $70 
C)  $10 
D)  $40

Question 4

The value of marginal product of labor

Accepted Answer

A)  is the change in total product that results from selling one more unit of a good. 
B)  is equal to the price of the good produced multiplied by the marginal product of labor. 
C)  is equal to marginal revenue multiplied by the quantity. 
D)  increases as the amount of labor employed increases. 
A)  is the change in total product that results from selling one more unit of a good. 
B)  is equal to the price of the good produced multiplied by the marginal product of labor. 
C)  is equal to marginal revenue multiplied by the quantity. 
D)  increases as the amount of labor employed increases.

Question 5

The existence of a union

Accepted Answer

A)  has no effect on labor supply and demand. 
B)  affects labor supply only. 
C)  affects labor demand only. 
D)  can affect both labor supply and labor demand. 
A)  has no effect on labor supply and demand. 
B)  affects labor supply only. 
C)  affects labor demand only. 
D)  can affect both labor supply and labor demand.

Question 6

When a firm faces a labor supply curve that is upward sloping, the firm must

Accepted Answer

A)  offer a higher wage if it wishes to hire more workers. 
B)  pay a wage that exceeds the value of marginal product. 
C)  pay a wage that does not exceed the minimum wage. 
D)  maximize the amount of labor that it hires. 
A)  offer a higher wage if it wishes to hire more workers. 
B)  pay a wage that exceeds the value of marginal product. 
C)  pay a wage that does not exceed the minimum wage. 
D)  maximize the amount of labor that it hires.

Question 7

Because a monopsony must raise the wage on all labor hired in order to hire more labor,

Accepted Answer

A)  the MCL curve is horizontal at the market wage. 
B)  the MCL curve is negatively sloped. 
C)  MCL = W. 
D)  MCL > W. 
A)  the MCL curve is horizontal at the market wage. 
B)  the MCL curve is negatively sloped. 
C)  MCL = W. 
D)  MCL > W.

Question 8

-The above figure represents the market for teenage workers at fast-food restaurants in Kansas City.
a) What is the equilibrium wage rate and employment?
b) Describe the market at a wage rate of $6 per hour.
c) Describe the market at a wage rate of $12 an hour.
d) How would an increase in the number of young, married college graduates, who tend to eat at fast-food restaurants, affect the figure, the equilibrium wage rate, and employment?

Accepted Answer

a) The equilibrium wage rate is $8 an ho

Question 9

Because of the income effect, the labor supply curve is

Accepted Answer

A)  eventually backward bending as wage rate increases. 
B)  positively sloped. 
C)  horizontal. 
D)  vertical. 
A)  eventually backward bending as wage rate increases. 
B)  positively sloped. 
C)  horizontal. 
D)  vertical.

Question 10

If people suddenly start to expect the price of oil to rise less rapidly than the interest rate, the demand for oil ________ and the supply of oil ________.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; decreases 
D)  decreases; increases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; decreases 
D)  decreases; increases

Question 11

You observe that more labor is employed and the wage rate increases. This set of events could have been the result of a

Accepted Answer

A)  rightward shift of the labor demand curve. 
B)  leftward shift of the labor supply curve. 
C)  rightward shift of the labor supply curve. 
D)  leftward shift of the labor demand curve. 
A)  rightward shift of the labor demand curve. 
B)  leftward shift of the labor supply curve. 
C)  rightward shift of the labor supply curve. 
D)  leftward shift of the labor demand curve.

Question 12

If a union restricts the supply of labor but cannot change the demand for labor, the union ________ the wage rate and ________ the level of employment.

Accepted Answer

A)  raises; decreases 
B)  raises; increases 
C)  lowers; decreases 
D)  lowers; increases 
A)  raises; decreases 
B)  raises; increases 
C)  lowers; decreases 
D)  lowers; increases

Question 13

If Joe receives an increase in his wage rate and decides to decrease his hours worked, the

Accepted Answer

A)  substitution effect and the income effect must be equal. 
B)  substitution effect must exceed the income effect. 
C)  income effect must exceed the substitution effect. 
D)  substitution effect must be zero. 
A)  substitution effect and the income effect must be equal. 
B)  substitution effect must exceed the income effect. 
C)  income effect must exceed the substitution effect. 
D)  substitution effect must be zero.

Question 14

-In the table above, if the wage rate is $12.00 per hour, the profit-maximizing number of workers is

Accepted Answer

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

Question 15

If Delores wanted to make sure that she had $3,000 a year from now, how much would she need to save now if the interest rate is 7 percent?

Accepted Answer

A)  $3000 
B)  $2804 
C)  $2790 
D)  $2666 
A)  $3000 
B)  $2804 
C)  $2790 
D)  $2666

Question 16

When a union faces a monopsony buyer, a ________ exists.

Accepted Answer

A)  dual-monopoly 
B)  monopoly 
C)  bilateral monopoly 
D)  monopolistic monopsony 
A)  dual-monopoly 
B)  monopoly 
C)  bilateral monopoly 
D)  monopolistic monopsony

Question 17

As wages rise, the substitution effect induces households to

Accepted Answer

A)  choose leisure rather than supplying labor in the labor market. 
B)  choose supplying labor in the labor market rather than engage in leisure. 
C)  reduce the opportunity cost of leisure. 
D)  reduce the economic rent from leisure. 
A)  choose leisure rather than supplying labor in the labor market. 
B)  choose supplying labor in the labor market rather than engage in leisure. 
C)  reduce the opportunity cost of leisure. 
D)  reduce the economic rent from leisure.

Question 18

-City-Mart is the only employer of sales clerks in Panburg. In the figure above S is the labor supply curve faced by City-Mart, VMP is City-Mart's value of marginal product curve, and MCL is its marginal cost of labor curve. The lowest wage rate at which City-Mart can hire 40 hours of labor per day is

Accepted Answer

A)  $8 per hour. 
B)  $12 per hour. 
C)  $4 per hour. 
D)  $9 per hour. 
A)  $8 per hour. 
B)  $12 per hour. 
C)  $4 per hour. 
D)  $9 per hour.

Question 19

A firm in a competitive labor market will hire labor until the value of marginal product of labor equals the

Accepted Answer

A)  firm's marginal revenue. 
B)  firm's marginal cost. 
C)  firm's average cost. 
D)  wage rate. 
A)  firm's marginal revenue. 
B)  firm's marginal cost. 
C)  firm's average cost. 
D)  wage rate.

Question 20

Assuming r is the interest rate, to compute the present value of a dollar to be received a year from today, you

Accepted Answer

A)  multiply the dollar by r. 
B)  divide the dollar by (1 - r). 
C)  multiply the dollar by (1 + r). 
D)  divide the dollar by (1 + r). 
A)  multiply the dollar by r. 
B)  divide the dollar by (1 - r). 
C)  multiply the dollar by (1 + r). 
D)  divide the dollar by (1 + r).

A bilateral monopoly is a

-The above table has the marginal product schedule for a firm. If the firm is a perfect competitor and the price of the product is constant at $2 a unit, complete the table. If the wage rate is $8 an hour, how many workers does the firm hire?

-Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $4, what is the value of marginal product of the 4th worker?

The value of marginal product of labor

The existence of a union

When a firm faces a labor supply curve that is upward sloping, the firm must

Because a monopsony must raise the wage on all labor hired in order to hire more labor,

Because of the income effect, the labor supply curve is

If people suddenly start to expect the price of oil to rise less rapidly than the interest rate, the demand for oil and the supply of oil .

You observe that more labor is employed and the wage rate increases. This set of events could have been the result of a

If a union restricts the supply of labor but cannot change the demand for labor, the union the wage rate and the level of employment.

If Joe receives an increase in his wage rate and decides to decrease his hours worked, the

-In the table above, if the wage rate is $12.00 per hour, the profit-maximizing number of workers is

If Delores wanted to make sure that she had $3,000 a year from now, how much would she need to save now if the interest rate is 7 percent?

When a union faces a monopsony buyer, a ________ exists.

As wages rise, the substitution effect induces households to

A firm in a competitive labor market will hire labor until the value of marginal product of labor equals the

Assuming r is the interest rate, to compute the present value of a dollar to be received a year from today, you

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Economic Inequality

Uncertainty and Information

Filters

Exam 18: Markets for Factors of Production

A bilateral monopoly is a

-The above table has the marginal product schedule for a firm. If the firm is a perfect competitor and the price of the product is constant at $2 a unit, complete the table. If the wage rate is $8 an hour, how many workers does the firm hire?

-Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $4, what is the value of marginal product of the 4th worker?

The value of marginal product of labor

The existence of a union

When a firm faces a labor supply curve that is upward sloping, the firm must

Because a monopsony must raise the wage on all labor hired in order to hire more labor,

Because of the income effect, the labor supply curve is

If people suddenly start to expect the price of oil to rise less rapidly than the interest rate, the demand for oil ________ and the supply of oil ________.

You observe that more labor is employed and the wage rate increases. This set of events could have been the result of a

If a union restricts the supply of labor but cannot change the demand for labor, the union ________ the wage rate and ________ the level of employment.

If Joe receives an increase in his wage rate and decides to decrease his hours worked, the

-In the table above, if the wage rate is $12.00 per hour, the profit-maximizing number of workers is

If Delores wanted to make sure that she had $3,000 a year from now, how much would she need to save now if the interest rate is 7 percent?

When a union faces a monopsony buyer, a ________ exists.

As wages rise, the substitution effect induces households to

A firm in a competitive labor market will hire labor until the value of marginal product of labor equals the

Assuming r is the interest rate, to compute the present value of a dollar to be received a year from today, you

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Economic Inequality

Uncertainty and Information

Filters

If people suddenly start to expect the price of oil to rise less rapidly than the interest rate, the demand for oil and the supply of oil .

If a union restricts the supply of labor but cannot change the demand for labor, the union the wage rate and the level of employment.