Question 1

-The above figure shows the market for labor. The employer is a monopsony. At the equilibrium level of employment, which of the following is CORRECT?

Accepted Answer

A) MCL = VMP B) VMP > W C) W < MCL D) All of the above are correct. A) MCL = VMP B) VMP > W C) W < MCL D) All of the above are correct.

Question 2

-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. If the market for sales clerks' labor in Panburg were competitive, the wage rate would be ________ per hour, and ________ hours of labor would be hired.

Accepted Answer

A)  $9; 90 
B)  $12; 60 
C)  $6; 90 
D)  $6; 60 
A)  $9; 90 
B)  $12; 60 
C)  $6; 90 
D)  $6; 60

Question 3

If a union is unable to increase the demand for its workers, then success at raising the wage rate paid its members means that

Accepted Answer

A)  all union members receive a higher wage. 
B)  some union members will lose their jobs. 
C)  more union members will be hired. 
D)  the union will push for a decrease in the minimum wage. 
A)  all union members receive a higher wage. 
B)  some union members will lose their jobs. 
C)  more union members will be hired. 
D)  the union will push for a decrease in the minimum wage.

Question 4

-Doug's Dog Grooming is a perfectly competitive firm charging $5 per dog grooming. Doug's Dog Grooming has the total and marginal product of labor schedules in the above table and can hire workers from a perfectly competitive labor market for $15 per hour. The profit-maximizing level of employment for Doug's Dog Grooming is

Accepted Answer

A)  1 worker. 
B)  2 workers. 
C)  4 workers. 
D)  6 workers. 
A)  1 worker. 
B)  2 workers. 
C)  4 workers. 
D)  6 workers.

Question 5

-Consider the labor market depicted in the above figure. The competitive equilibrium would be for workers to be paid an hourly wage equal to

Accepted Answer

A)  $10. 
B)  $15. 
C)  $20. 
D)  a wage between $10 and $20. 
A)  $10. 
B)  $15. 
C)  $20. 
D)  a wage between $10 and $20.

Question 6

Profit is the factor price for

Accepted Answer

A)  capital. 
B)  land. 
C)  entrepreneurship. 
D)  labor. 
A)  capital. 
B)  land. 
C)  entrepreneurship. 
D)  labor.

Question 7

To maximize its profit, a firm will hire more workers as long as

Accepted Answer

A)  marginal revenue exceeds the wage rate. 
B)  marginal revenue is less than the wage rate. 
C)  value of marginal product exceeds the wage rate. 
D)  marginal product exceeds the wage rate. 
A)  marginal revenue exceeds the wage rate. 
B)  marginal revenue is less than the wage rate. 
C)  value of marginal product exceeds the wage rate. 
D)  marginal product exceeds the wage rate.

Question 8

If a monopsony paid its workers a wage equal to their value of marginal product, it would be maximizing its profit.

Accepted Answer

A) True 
 B)False

Question 9

What is the present value of $1,000 to be received 2 years in the future with an interest rate of 8 percent?

Accepted Answer

A)  $857.34 
B)  $925.93 
C)  $1080.00 
D)  $1166.40 
A)  $857.34 
B)  $925.93 
C)  $1080.00 
D)  $1166.40

Question 10

-If the labor market in the above figure is competitive, what is the equilibrium wage and quantity of labor hired?

Accepted Answer

A)  $10 and 100 hours 
B)  $10 and 50 hours 
C)  $5 and 100 hours 
D)  $15 and 50 hours 
A)  $10 and 100 hours 
B)  $10 and 50 hours 
C)  $5 and 100 hours 
D)  $15 and 50 hours

Question 11

Pennsylvania's largest grower of fresh-to-market tomatoes announced in March 2009 he will no longer produce the crop. The acreage he previously devoted to tomatoes and pumpkins will be converted to field corn that is harvested by machines. Of the following, which could have led to the shift from labor intensive tomato production to field corn?

Accepted Answer

A)  The market price of tomatoes increased. 
B)  Farm workers' reservation wage fell. 
C)  The wage rate for farm workers increased. 
D)  All of the answers are true. 
A)  The market price of tomatoes increased. 
B)  Farm workers' reservation wage fell. 
C)  The wage rate for farm workers increased. 
D)  All of the answers are true.

Question 12

Discounting is converting a future amount of money to a present value.

Accepted Answer

A) True 
 B)False

Question 13

If the interest rate is 10 percent, the present value of a payment of $1,000 one year from today is

Accepted Answer

A)  $900. 
B)  $909. 
C)  $1,000. 
D)  $1,100. 
A)  $900. 
B)  $909. 
C)  $1,000. 
D)  $1,100.

Question 14

What factors other than the wage rate influence the demand for labor? How is demand affected by changes in these factors?

Accepted Answer

The demand for labor is influenced by ch

Question 15

In the short run, ________ increases the quantity of labor demanded by the firm.

Accepted Answer

A)  a decrease in the price of the firm's output 
B)  an increase in the prices of other factors of production used by the firm 
C)  a technological advance that decreases the marginal product of labor 
D)  a decrease in the wage rate 
A)  a decrease in the price of the firm's output 
B)  an increase in the prices of other factors of production used by the firm 
C)  a technological advance that decreases the marginal product of labor 
D)  a decrease in the wage rate

Question 16

Pennsylvania's largest grower of fresh-to-market tomatoes announced in March 2009 he will no longer produce the crop because he can't find enough workers to harvest it. Though his tomato pickers made an average of $16.59 per hour last year, he said the relatively high wage is not enough to attract local labor to work the fields. In the market for tomato workers, what is TRUE?

Accepted Answer

A)  $16.59 is above the equilibrium wage rate 
B)  $16.59 is the equilibrium wage rate 
C)  $16.59 is below the equilibrium wage rate 
D)  Cannot determine where the equilibrium wage rate is in comparison to $16.59 without more information. 
A)  $16.59 is above the equilibrium wage rate 
B)  $16.59 is the equilibrium wage rate 
C)  $16.59 is below the equilibrium wage rate 
D)  Cannot determine where the equilibrium wage rate is in comparison to $16.59 without more information.

Question 17

The present value of a $5,000 cash gift to be received four years in the future, given an annual interest rate of 6 percent, is (to the nearest dollar)

Accepted Answer

A)  $4700. 
B)  $4717. 
C)  $6312. 
D)  $3960. 
A)  $4700. 
B)  $4717. 
C)  $6312. 
D)  $3960.

Question 18

Why does a firm maximize its profits by hiring so that VMP = W?

Accepted Answer

The VMP represents the additional revenu

Question 19

-Pointy Stone State Park is the sole employer of naturalists in the area. The table above provides information about the supply of naturalists and the value of marginal product of labor for naturalists. On the last naturalist hired, Pointy Stone State Park will earn a profit of

Accepted Answer

A)  zero. 
B)  $100 per week. 
C)  $150 per week. 
D)  $200 per week. 
A)  zero. 
B)  $100 per week. 
C)  $150 per week. 
D)  $200 per week.

Question 20

Which of the following groups lists the four factors of production?

Accepted Answer

A)  labor, capital, land, entrepreneurship 
B)  labor, capital, land, money 
C)  labor, money, land, entrepreneurship 
D)  labor, capital, money, entrepreneurship 
A)  labor, capital, land, entrepreneurship 
B)  labor, capital, land, money 
C)  labor, money, land, entrepreneurship 
D)  labor, capital, money, entrepreneurship

-The above figure shows the market for labor. The employer is a monopsony. At the equilibrium level of employment, which of the following is CORRECT?

If a union is unable to increase the demand for its workers, then success at raising the wage rate paid its members means that

-Consider the labor market depicted in the above figure. The competitive equilibrium would be for workers to be paid an hourly wage equal to

Profit is the factor price for

To maximize its profit, a firm will hire more workers as long as

If a monopsony paid its workers a wage equal to their value of marginal product, it would be maximizing its profit.

What is the present value of $1,000 to be received 2 years in the future with an interest rate of 8 percent?

-If the labor market in the above figure is competitive, what is the equilibrium wage and quantity of labor hired?

Discounting is converting a future amount of money to a present value.

If the interest rate is 10 percent, the present value of a payment of $1,000 one year from today is

What factors other than the wage rate influence the demand for labor? How is demand affected by changes in these factors?

In the short run, ________ increases the quantity of labor demanded by the firm.

The present value of a $5,000 cash gift to be received four years in the future, given an annual interest rate of 6 percent, is (to the nearest dollar)

Why does a firm maximize its profits by hiring so that VMP = W?

-Pointy Stone State Park is the sole employer of naturalists in the area. The table above provides information about the supply of naturalists and the value of marginal product of labor for naturalists. On the last naturalist hired, Pointy Stone State Park will earn a profit of

Which of the following groups lists the four factors of production?

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

-The above figure shows the market for labor. The employer is a monopsony. At the equilibrium level of employment, which of the following is CORRECT?

If a union is unable to increase the demand for its workers, then success at raising the wage rate paid its members means that

-Consider the labor market depicted in the above figure. The competitive equilibrium would be for workers to be paid an hourly wage equal to

Profit is the factor price for

To maximize its profit, a firm will hire more workers as long as

If a monopsony paid its workers a wage equal to their value of marginal product, it would be maximizing its profit.

What is the present value of $1,000 to be received 2 years in the future with an interest rate of 8 percent?

-If the labor market in the above figure is competitive, what is the equilibrium wage and quantity of labor hired?

Discounting is converting a future amount of money to a present value.

If the interest rate is 10 percent, the present value of a payment of $1,000 one year from today is

What factors other than the wage rate influence the demand for labor? How is demand affected by changes in these factors?

In the short run, ________ increases the quantity of labor demanded by the firm.

The present value of a $5,000 cash gift to be received four years in the future, given an annual interest rate of 6 percent, is (to the nearest dollar)

Why does a firm maximize its profits by hiring so that VMP = W?

-Pointy Stone State Park is the sole employer of naturalists in the area. The table above provides information about the supply of naturalists and the value of marginal product of labor for naturalists. On the last naturalist hired, Pointy Stone State Park will earn a profit of

Which of the following groups lists the four factors of production?

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