Question 1

A household's reservation wage is the

Accepted Answer

A)  lowest wage rate at which the household will supply labor. 
B)  wage at which the household's labor supply curve bends backward. 
C)  wage rate at which the household's income is largest. 
D)  highest wage rate at which the household will supply labor. 
A)  lowest wage rate at which the household will supply labor. 
B)  wage at which the household's labor supply curve bends backward. 
C)  wage rate at which the household's income is largest. 
D)  highest wage rate at which the household will supply labor.

Question 2

A firm's demand for labor

Accepted Answer

A)  increases when the price of the firm's output falls. 
B)  decreases when the price of the firm's output falls. 
C)  decreases when the wage rate decreases. 
D)  always increases when the prices of other factors fall. 
A)  increases when the price of the firm's output falls. 
B)  decreases when the price of the firm's output falls. 
C)  decreases when the wage rate decreases. 
D)  always increases when the prices of other factors fall.

Question 3

-The above figure represents the market for professional minor-league baseball umpires.
a) If umpires are offered $90 a game, what is the quantity of umpires supplied?
b) If umpires are offered $90 a game, is there a surplus or shortage of games umpired? What does the shortage or surplus equal?
c) What is the equilibrium wage rate and quantity of umpires?

Accepted Answer

a) The quantity of umpires supplied is 2

Question 4

-The figure above shows a labor market. If there is a monopsony in this labor market, then increasing the minimum wage from $3 per hour to $5 per hour

Accepted Answer

A)  will increase the quantity of labor employed. 
B)  will leave unchanged the quantity of labor employed. 
C)  will decrease the quantity of labor employed. 
D)  could increase, decrease, or leave unchanged the quantity of labor employed. 
A)  will increase the quantity of labor employed. 
B)  will leave unchanged the quantity of labor employed. 
C)  will decrease the quantity of labor employed. 
D)  could increase, decrease, or leave unchanged the quantity of labor employed.

Question 5

An advertisement campaign that successfully convinces consumers to buy union-made products has the direct effect of shifting the

Accepted Answer

A)  demand curve for union labor rightward. 
B)  demand curve for union labor leftward. 
C)  supply curve of union labor rightward. 
D)  supply curve of union labor leftward. 
A)  demand curve for union labor rightward. 
B)  demand curve for union labor leftward. 
C)  supply curve of union labor rightward. 
D)  supply curve of union labor leftward.

Question 6

Suppose the price of car wash returns to $5 but the wage rate increases to $80 per day.
a) What happens to the marginal product of labor? What happens to the value of marginal product? What happens to Sandy's demand for labor curve?
b) What happens to the number of workers Sandy employs? How does this number compare with the number Sandy employs when the wage rate is $60 per day?

Accepted Answer

@#IMG-DLM& a) The marginal product of labor depend

Question 7

-The above figure illustrates the case of a monopsony in the labor market. If the current wage paid is W1 and new wage legislation is passed that increases the minimum wage in this market to W2, the firm will

Accepted Answer

A)  hire less labor at the higher wage and, according to the law of demand, moving from point D to B. 
B)  hire the same amount of labor as before the law was passed because it cannot adjust to wage changes. 
C)  hire more labor, moving from point C to B. 
D)  pay a higher wage, moving from point C to A. 
A)  hire less labor at the higher wage and, according to the law of demand, moving from point D to B. 
B)  hire the same amount of labor as before the law was passed because it cannot adjust to wage changes. 
C)  hire more labor, moving from point C to B. 
D)  pay a higher wage, moving from point C to A.

Question 8

A worker has a marginal product of 15 units a day, each of which can be sold for $10. Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer.

Accepted Answer

It is profitable to hire this worker bec

Question 9

Land is an example of an nonrenewable resource.

Accepted Answer

A) True 
 B)False

Question 10

Coal is an example of

Accepted Answer

A)  a nonrenewable natural resource. 
B)  a renewable natural resource. 
C)  capital. 
D)  a casual resource. 
A)  a nonrenewable natural resource. 
B)  a renewable natural resource. 
C)  capital. 
D)  a casual resource.

Question 11

As the quantity of labor employed decreases, the value of marginal product diminishes.

Accepted Answer

A) True 
 B)False

Question 12

-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 $5 and the wage rate is $62.50 per day, how many workers should Winnie employ to maximize his profit?

Accepted Answer

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

Question 13

When Sam's Scarves uses 2 knitting machines and employs 3 people, total revenue is $330 a day. When Sam's Scarves uses 2 knitting machines and employs 4 people, total revenue is $360 a day. The value of marginal product of the third worker is

Accepted Answer

A)  $110. 
B)  $30. 
C)  $360. 
D)  $90. 
A)  $110. 
B)  $30. 
C)  $360. 
D)  $90.

Question 14

The value of marginal product (VMP) of an input such as labor is the

Accepted Answer

A)  additional output produced by the last unit of an input. 
B)  total revenue divided by the units of the input employed. 
C)  extra revenue gained by selling one more unit of output. 
D)  extra revenue gained by employing one more unit of the input. 
A)  additional output produced by the last unit of an input. 
B)  total revenue divided by the units of the input employed. 
C)  extra revenue gained by selling one more unit of output. 
D)  extra revenue gained by employing one more unit of the input.

Question 15

If Sam decides to work, his

Accepted Answer

A)  reservation wage is greater than his wage rate. 
B)  reservation wage is less than his wage rate. 
C)  value of marginal product is greater than his wage rate. 
D)  value of marginal product equals his wage rate. 
A)  reservation wage is greater than his wage rate. 
B)  reservation wage is less than his wage rate. 
C)  value of marginal product is greater than his wage rate. 
D)  value of marginal product equals his wage rate.

Question 16

Land is an example of a renewable resource.

Accepted Answer

A) True 
 B)False

Question 17

A perfectly competitive firm in a competitive labor market will hire more labor whenever

Accepted Answer

A)  its average revenue product of labor exceeds the wage rate. 
B)  the wage rate exceeds its average revenue product of labor. 
C)  its value of marginal product of labor exceeds the wage rate. 
D)  the wage rate exceeds its value of marginal product of labor. 
A)  its average revenue product of labor exceeds the wage rate. 
B)  the wage rate exceeds its average revenue product of labor. 
C)  its value of marginal product of labor exceeds the wage rate. 
D)  the wage rate exceeds its value of marginal product of labor.

Question 18

-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 second worker?

Accepted Answer

A)  $80 
B)  $20 
C)  $30 
D)  $180 
A)  $80 
B)  $20 
C)  $30 
D)  $180

Question 19

As a competitive firm hires increasing amounts of labor, the value of marginal product of labor

Accepted Answer

A)  decreases. 
B)  increases. 
C)  remains constant. 
D)  decreases then increases. 
A)  decreases. 
B)  increases. 
C)  remains constant. 
D)  decreases then increases.

Question 20

Which of the following is a recent trend in the labor market?

Accepted Answer

A)  Low-skilled workers have lost jobs. 
B)  The demand for high-skilled labor has increased as technology has increased. 
C)  The wages of high-skilled labor have decreased. 
D)  The marginal productivity of low-skilled workers has increased. 
A)  Low-skilled workers have lost jobs. 
B)  The demand for high-skilled labor has increased as technology has increased. 
C)  The wages of high-skilled labor have decreased. 
D)  The marginal productivity of low-skilled workers has increased.

A household's reservation wage is the

A firm's demand for labor

-The figure above shows a labor market. If there is a monopsony in this labor market, then increasing the minimum wage from $3 per hour to $5 per hour

An advertisement campaign that successfully convinces consumers to buy union-made products has the direct effect of shifting the

-The above figure illustrates the case of a monopsony in the labor market. If the current wage paid is W₁ and new wage legislation is passed that increases the minimum wage in this market to W₂, the firm will

A worker has a marginal product of 15 units a day, each of which can be sold for $10. Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer.

Land is an example of an nonrenewable resource.

Coal is an example of

As the quantity of labor employed decreases, the value of marginal product diminishes.

-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 $5 and the wage rate is $62.50 per day, how many workers should Winnie employ to maximize his profit?

When Sam's Scarves uses 2 knitting machines and employs 3 people, total revenue is $330 a day. When Sam's Scarves uses 2 knitting machines and employs 4 people, total revenue is $360 a day. The value of marginal product of the third worker is

The value of marginal product (VMP) of an input such as labor is the

If Sam decides to work, his

Land is an example of a renewable resource.

A perfectly competitive firm in a competitive labor market will hire more labor whenever

-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 second worker?

As a competitive firm hires increasing amounts of labor, the value of marginal product of labor

Which of the following is a recent trend in the labor market?

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 household's reservation wage is the

A firm's demand for labor

-The figure above shows a labor market. If there is a monopsony in this labor market, then increasing the minimum wage from $3 per hour to $5 per hour

An advertisement campaign that successfully convinces consumers to buy union-made products has the direct effect of shifting the

-The above figure illustrates the case of a monopsony in the labor market. If the current wage paid is W1 and new wage legislation is passed that increases the minimum wage in this market to W2, the firm will

A worker has a marginal product of 15 units a day, each of which can be sold for $10. Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer.

Land is an example of an nonrenewable resource.

Coal is an example of

As the quantity of labor employed decreases, the value of marginal product diminishes.

-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 $5 and the wage rate is $62.50 per day, how many workers should Winnie employ to maximize his profit?

When Sam's Scarves uses 2 knitting machines and employs 3 people, total revenue is $330 a day. When Sam's Scarves uses 2 knitting machines and employs 4 people, total revenue is $360 a day. The value of marginal product of the third worker is

The value of marginal product (VMP) of an input such as labor is the

If Sam decides to work, his

Land is an example of a renewable resource.

A perfectly competitive firm in a competitive labor market will hire more labor whenever

-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 second worker?

As a competitive firm hires increasing amounts of labor, the value of marginal product of labor

Which of the following is a recent trend in the labor market?

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

-The above figure illustrates the case of a monopsony in the labor market. If the current wage paid is W₁ and new wage legislation is passed that increases the minimum wage in this market to W₂, the firm will