Question 1

In a labor market, employment

Accepted Answer

A)  and the wage rate are higher when the market is a monopsony than when the market is competitive. 
B)  is higher and the wage rate is lower when the market is a monopsony than when the market is competitive. 
C)  is lower and the wage rate is higher when the market is a monopsony than when the market is competitive. 
D)  and the wage rate are lower when the market is a monopsony than when the market is competitive. 
A)  and the wage rate are higher when the market is a monopsony than when the market is competitive. 
B)  is higher and the wage rate is lower when the market is a monopsony than when the market is competitive. 
C)  is lower and the wage rate is higher when the market is a monopsony than when the market is competitive. 
D)  and the wage rate are lower when the market is a monopsony than when the market is competitive.

Question 2

-The figure above shows a labor market. If there is a monopsony in this labor market, employment is

Accepted Answer

A)  0 hours per week. 
B)  50 hours per week. 
C)  100 hours per week. 
D)  150 hours per week. 
A)  0 hours per week. 
B)  50 hours per week. 
C)  100 hours per week. 
D)  150 hours per week.

Question 3

Homer has been saving to buy a new car in five years and expects that the car of his dreams will cost $35,000. If the interest rate is 8 percent per year, how much money should Homer have in his bank account today in order to have enough money to buy the car in 5 years?

Accepted Answer

A)  $1,852.28 
B)  $22,055.94 
C)  $23,820.41 
D)  $25,726.04 
A)  $1,852.28 
B)  $22,055.94 
C)  $23,820.41 
D)  $25,726.04

Question 4

The reservation wage is the

Accepted Answer

A)  highest wage for which a person is willing to supply labor. 
B)  lowest wage for which a person is willing to supply labor. 
C)  wage for which a person is willing to work full time. 
D)  wage for which a person is willing to work overtime. 
A)  highest wage for which a person is willing to supply labor. 
B)  lowest wage for which a person is willing to supply labor. 
C)  wage for which a person is willing to work full time. 
D)  wage for which a person is willing to work overtime.

Question 5

-Based on the production and revenue data in the above table, what is the marginal product of the 4th worker?

Accepted Answer

A)  28 
B)  6 
C)  4 
D)  2 
A)  28 
B)  6 
C)  4 
D)  2

Question 6

The proposition that the price of a resource is expected to rise at a rate equal to the interest rate is called the

Accepted Answer

A)  discounted present value. 
B)  derived demand for productive resources. 
C)  diminishing marginal revenue product. 
D)  Hotelling Principle. 
A)  discounted present value. 
B)  derived demand for productive resources. 
C)  diminishing marginal revenue product. 
D)  Hotelling Principle.

Question 7

-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 and the wage rate is $50 per day, how many workers should Winnie employ to maximize his profit?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 8

Why does a profit-maximizing firm hire labor up to the point where the value of marginal product equals the wage rate?

Accepted Answer

If a company stopped adding workers at t

Question 9

-The figure above shows a labor market. If there is a monopsony in this labor market, the monopsony pays a wage rate

Accepted Answer

A)  greater than the value of marginal product of labor. 
B)  equal to the value of marginal product of labor. 
C)  less than the value of marginal product of labor. 
D)  equal to the average revenue product of labor. 
A)  greater than the value of marginal product of labor. 
B)  equal to the value of marginal product of labor. 
C)  less than the value of marginal product of labor. 
D)  equal to the average revenue product of labor.

Question 10

The interest rate is 8 percent. The present value of $110 three years from now equals

Accepted Answer

A)  $101.85. 
B)  $94.31. 
C)  $118.80. 
D)  $128.30. 
A)  $101.85. 
B)  $94.31. 
C)  $118.80. 
D)  $128.30.

Question 11

At an interest rate of 5 percent, the present value of $1,000 to be received three years from today is

Accepted Answer

A)  less than $875. 
B)  between $875 and $925. 
C)  between $925 and $975. 
D)  more than $975. 
A)  less than $875. 
B)  between $875 and $925. 
C)  between $925 and $975. 
D)  more than $975.

Question 12

Americans are always connected today, talking on the phone at home, while driving down the road and while shopping for groceries. But that wasn't always the case. In fact, it wasn't that long ago people had to go through an operator in order to get connected with the person they were trying to reach. How do cell phones impact the labor market for telephone operators?

Accepted Answer

A)  Decreased telephone operators' value of marginal product 
B)  Increased the demand for telephone operators 
C)  Increased the supply for telephone operators 
D)  Decreased the marginal productivity of telephone operators 
A)  Decreased telephone operators' value of marginal product 
B)  Increased the demand for telephone operators 
C)  Increased the supply for telephone operators 
D)  Decreased the marginal productivity of telephone operators

Question 13

What is the present value of $200 one year from now when the interest rate is 6 percent?

Accepted Answer

A)  $125.00 
B)  $188.68 
C)  $212.00 
D)  $320.00 
A)  $125.00 
B)  $188.68 
C)  $212.00 
D)  $320.00

Question 14

In comparison to an employer in a competitive labor market, a monopsony employer pays a ________ wage rate and hires ________ workers.

Accepted Answer

A)  lower; fewer 
B)  lower; more 
C)  higher; more 
D)  higher; fewer 
A)  lower; fewer 
B)  lower; more 
C)  higher; more 
D)  higher; fewer

Question 15

Water from the Mississippi river is an example of

Accepted Answer

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

Question 16

In order for there to be a backward-bending supply of labor curve, it must be the case that

Accepted Answer

A)  at low wage rates, the income effect of a wage increase exceeds the substitution effect, but at high wage rates the substitution effect of a wage increase exceeds the income effect. 
B)  at low wage rates, the substitution effect of a wage increase exceeds the income effect, but at high wage rates the income effect of a wage increase exceeds the substitution effect. 
C)  the income effect of a wage increase exceeds the substitution effect at all wage rates. 
D)  the substitution effect of a wage increase exceeds the income effect at all wage rates. 
A)  at low wage rates, the income effect of a wage increase exceeds the substitution effect, but at high wage rates the substitution effect of a wage increase exceeds the income effect. 
B)  at low wage rates, the substitution effect of a wage increase exceeds the income effect, but at high wage rates the income effect of a wage increase exceeds the substitution effect. 
C)  the income effect of a wage increase exceeds the substitution effect at all wage rates. 
D)  the substitution effect of a wage increase exceeds the income effect at all wage rates.

Question 17

The value of marginal product equals ________ multiplied by ________.

Accepted Answer

A)  the good's market price; marginal cost 
B)  the good's market price; marginal product 
C)  marginal cost; marginal product 
D)  marginal revenue; total product 
A)  the good's market price; marginal cost 
B)  the good's market price; marginal product 
C)  marginal cost; marginal product 
D)  marginal revenue; total product

Question 18

A firm's demand for labor curve

Accepted Answer

A)  is the same as its value of marginal product curve. 
B)  is steeper than its value of marginal product curve. 
C)  is flatter than its value of marginal product curve. 
D)  intersects its value of marginal product curve at the profit-maximizing quantity of employment. 
A)  is the same as its value of marginal product curve. 
B)  is steeper than its value of marginal product curve. 
C)  is flatter than its value of marginal product curve. 
D)  intersects its value of marginal product curve at the profit-maximizing quantity of employment.

Question 19

An individual's labor supply curve will have a

Accepted Answer

A)  positive slope if the income effect exceeds the substitution effect. 
B)  negative slope if the substitution effect exceeds the income effect. 
C)  positive slope if the substitution effect exceeds the income effect. 
D)  negative slope regardless of whether the substitution effect or income effect is larger. 
A)  positive slope if the income effect exceeds the substitution effect. 
B)  negative slope if the substitution effect exceeds the income effect. 
C)  positive slope if the substitution effect exceeds the income effect. 
D)  negative slope regardless of whether the substitution effect or income effect is larger.

Question 20

-The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. How much labor will the firm hire if the market wage is $300 per day?

Accepted Answer

A)  0 workers 
B)  1 worker 
C)  2 workers 
D)  3 workers 
A)  0 workers 
B)  1 worker 
C)  2 workers 
D)  3 workers

In a labor market, employment

-The figure above shows a labor market. If there is a monopsony in this labor market, employment is

Homer has been saving to buy a new car in five years and expects that the car of his dreams will cost $35,000. If the interest rate is 8 percent per year, how much money should Homer have in his bank account today in order to have enough money to buy the car in 5 years?

The reservation wage is the

-Based on the production and revenue data in the above table, what is the marginal product of the 4th worker?

The proposition that the price of a resource is expected to rise at a rate equal to the interest rate is called the

-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 and the wage rate is $50 per day, how many workers should Winnie employ to maximize his profit?

Why does a profit-maximizing firm hire labor up to the point where the value of marginal product equals the wage rate?

-The figure above shows a labor market. If there is a monopsony in this labor market, the monopsony pays a wage rate

The interest rate is 8 percent. The present value of $110 three years from now equals

At an interest rate of 5 percent, the present value of $1,000 to be received three years from today is

What is the present value of $200 one year from now when the interest rate is 6 percent?

In comparison to an employer in a competitive labor market, a monopsony employer pays a wage rate and hires workers.

Water from the Mississippi river is an example of

In order for there to be a backward-bending supply of labor curve, it must be the case that

The value of marginal product equals multiplied by .

A firm's demand for labor curve

An individual's labor supply curve will have a

-The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. How much labor will the firm hire if the market wage is $300 per day?

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

In a labor market, employment

-The figure above shows a labor market. If there is a monopsony in this labor market, employment is

Homer has been saving to buy a new car in five years and expects that the car of his dreams will cost $35,000. If the interest rate is 8 percent per year, how much money should Homer have in his bank account today in order to have enough money to buy the car in 5 years?

The reservation wage is the

-Based on the production and revenue data in the above table, what is the marginal product of the 4th worker?

The proposition that the price of a resource is expected to rise at a rate equal to the interest rate is called the

-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 and the wage rate is $50 per day, how many workers should Winnie employ to maximize his profit?

Why does a profit-maximizing firm hire labor up to the point where the value of marginal product equals the wage rate?

-The figure above shows a labor market. If there is a monopsony in this labor market, the monopsony pays a wage rate

The interest rate is 8 percent. The present value of $110 three years from now equals

At an interest rate of 5 percent, the present value of $1,000 to be received three years from today is

What is the present value of $200 one year from now when the interest rate is 6 percent?

In comparison to an employer in a competitive labor market, a monopsony employer pays a ________ wage rate and hires ________ workers.

Water from the Mississippi river is an example of

In order for there to be a backward-bending supply of labor curve, it must be the case that

The value of marginal product equals ________ multiplied by ________.

A firm's demand for labor curve

An individual's labor supply curve will have a

-The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. How much labor will the firm hire if the market wage is $300 per day?

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

In comparison to an employer in a competitive labor market, a monopsony employer pays a wage rate and hires workers.

The value of marginal product equals multiplied by .