Question 1

If the value of marginal product of a factor of production exceeds the price of the factor, the

Accepted Answer

A)  firm should hire more of that factor. 
B)  firm should hire less of that factor. 
C)  firm is maximizing profits. 
D)  firm should shut down. 
A)  firm should hire more of that factor. 
B)  firm should hire less of that factor. 
C)  firm is maximizing profits. 
D)  firm should shut down.

Question 2

-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. If as a result of a minimum wage law Pointy Stone State Park were required to pay its naturalists $450 per week then the employment of naturalists by Pointy Stone State Park will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  not change. 
D)  Any of the above are possible results. 
A)  increase. 
B)  decrease. 
C)  not change. 
D)  Any of the above are possible results.

Question 3

The supply of a renewable resource is perfectly elastic.

Accepted Answer

A) True 
 B)False

Question 4

-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 Winnie maximizes his profit when he employs 4 workers, the wage rate is

Accepted Answer

A)  $90 per day. 
B)  $30 per day. 
C)  $70 per day. 
D)  $50 per day. 
A)  $90 per day. 
B)  $30 per day. 
C)  $70 per day. 
D)  $50 per day.

Question 5

-Based on the production and revenue data in the above table, if the wage rate is $35 per worker, how many workers will be hired?

Accepted Answer

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

Question 6

-The table above gives information about the labor market in Lantis, a community in which the labor market is perfectly competitive. If the demand for labor decreases by 200 hours per day, the equilibrium wage rate falls to ________ an hour and the quantity of labor employed ________ hours per day.

Accepted Answer

A)  $10; remains at 400 
B)  $10; decreases to 300 
C)  $20; increases to 400 
D)  $5; remains at 200 
A)  $10; remains at 400 
B)  $10; decreases to 300 
C)  $20; increases to 400 
D)  $5; remains at 200

Question 7

If the interest rate is 5 percent, what is the present value of $100 that will be received 3 years from now?

Accepted Answer

A)  $90.70 
B)  $86.38 
C)  $115.00 
D)  $13.62 
A)  $90.70 
B)  $86.38 
C)  $115.00 
D)  $13.62

Question 8

Suppose the interest rate is 5 percent per year. The present value of $210 to be received one year from today is

Accepted Answer

A)  $200.00. 
B)  $210.00. 
C)  $215.00. 
D)  $220.50. 
A)  $200.00. 
B)  $210.00. 
C)  $215.00. 
D)  $220.50.

Question 9

Lynn owns Dust Bunnies, a cleaning company. In one week, she is able to clean 9 houses. If she hires an employee, together they are able to clean 15 houses per week. If Lynn charges $100 to clean a house, and she pays her employee $400 a week, should she hire this employee?

Accepted Answer

A)  Yes, because the value of marginal product of the worker is less than the wage. 
B)  Yes, because the value of marginal product of the worker is greater than the wage. 
C)  No, because the value of marginal product of the worker is greater than the wage. 
D)  No, because the value of marginal product of the worker is less than the wage. 
A)  Yes, because the value of marginal product of the worker is less than the wage. 
B)  Yes, because the value of marginal product of the worker is greater than the wage. 
C)  No, because the value of marginal product of the worker is greater than the wage. 
D)  No, because the value of marginal product of the worker is less than the wage.

Question 10

For a monopsony, the marginal cost of labor exceeds the wage rate because the firm must increase the wage it pays to all of its workers if it wishes to increase its employment.

Accepted Answer

A) True 
 B)False

Question 11

-Consider the monopsony in the above figure. The 200th hour of labor creates how much added revenue per hour for the monopsony?

Accepted Answer

A)  $10 
B)  $15 
C)  $20 
D)  None of the above answers is correct. 
A)  $10 
B)  $15 
C)  $20 
D)  None of the above answers is correct.

Question 12

-Consider the monopsony in the above figure. The monopsony will hire ________ hours per week.

Accepted Answer

A)  200 
B)  400 
C)  600 
D)  between 200 and 400 
A)  200 
B)  400 
C)  600 
D)  between 200 and 400

Question 13

-If there is a monopsony operating in the labor market illustrated in the figure above, the equilibrium wage and quantity of labor hired is

Accepted Answer

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

Question 14

St. Mary's Church has a balloon payment of $100,000 due on its mortgage in two years. If the interest rate is 8 percent, the present value of St. Mary's balloon mortgage payment is

Accepted Answer

A)  $100,000.00. 
B)  $116,640.00. 
C)  $85, 733.88. 
D)  None of the above answers is correct. 
A)  $100,000.00. 
B)  $116,640.00. 
C)  $85, 733.88. 
D)  None of the above answers is correct.

Question 15

For the past year, Teddy has had a part-time job at which he is willing to work 30 hours each week. During Teddy's annual review, his boss grants him an 8 percent increase in his wage. As a result of the wage increase, Teddy is now willing to work 25 hours each week. Teddy's opportunity cost of ________ has risen and because for Teddy the substitution effect of the wage hike is ________ than the income effect.

Accepted Answer

A)  work; greater 
B)  work; less 
C)  leisure; greater 
D)  leisure; less 
A)  work; greater 
B)  work; less 
C)  leisure; greater 
D)  leisure; less

Question 16

What tools can unions use to increase the demand for union labor?

Accepted Answer

The main tools that unions use to increa

Question 17

The process of converting a future amount of money into its value today is called

Accepted Answer

A)  trending. 
B)  depreciation. 
C)  discounting. 
D)  compounding. 
A)  trending. 
B)  depreciation. 
C)  discounting. 
D)  compounding.

Question 18

The demand curve for labor is negatively sloped only because the firm must lower its price if it wishes to sell more output.

Accepted Answer

A) True 
 B)False

Question 19

-Sun's Gas Station is a firm operating in a perfectly competitive industry. Sun's Gas Station sells each gallon of gas for $3. What is the marginal product from hiring the fourth worker?

Accepted Answer

A)  70 gallons of gasoline 
B)  280 gallons of gasoline 
C)  40 gallons of gasoline 
D)  80 gallons of gasoline 
A)  70 gallons of gasoline 
B)  280 gallons of gasoline 
C)  40 gallons of gasoline 
D)  80 gallons of gasoline

Question 20

-Based on the production and revenue data in the above table, what is the price of the product?

Accepted Answer

A)  $100 
B)  $10 
C)  $1 
D)  More information is needed to determine the price of the product. 
A)  $100 
B)  $10 
C)  $1 
D)  More information is needed to determine the price of the product.

If the value of marginal product of a factor of production exceeds the price of the factor, the

The supply of a renewable resource is perfectly elastic.

-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 Winnie maximizes his profit when he employs 4 workers, the wage rate is

-Based on the production and revenue data in the above table, if the wage rate is $35 per worker, how many workers will be hired?

-The table above gives information about the labor market in Lantis, a community in which the labor market is perfectly competitive. If the demand for labor decreases by 200 hours per day, the equilibrium wage rate falls to an hour and the quantity of labor employed hours per day.

If the interest rate is 5 percent, what is the present value of $100 that will be received 3 years from now?

Suppose the interest rate is 5 percent per year. The present value of $210 to be received one year from today is

Lynn owns Dust Bunnies, a cleaning company. In one week, she is able to clean 9 houses. If she hires an employee, together they are able to clean 15 houses per week. If Lynn charges $100 to clean a house, and she pays her employee $400 a week, should she hire this employee?

For a monopsony, the marginal cost of labor exceeds the wage rate because the firm must increase the wage it pays to all of its workers if it wishes to increase its employment.

-Consider the monopsony in the above figure. The 200th hour of labor creates how much added revenue per hour for the monopsony?

-Consider the monopsony in the above figure. The monopsony will hire ________ hours per week.

-If there is a monopsony operating in the labor market illustrated in the figure above, the equilibrium wage and quantity of labor hired is

St. Mary's Church has a balloon payment of $100,000 due on its mortgage in two years. If the interest rate is 8 percent, the present value of St. Mary's balloon mortgage payment is

What tools can unions use to increase the demand for union labor?

The process of converting a future amount of money into its value today is called

The demand curve for labor is negatively sloped only because the firm must lower its price if it wishes to sell more output.

-Sun's Gas Station is a firm operating in a perfectly competitive industry. Sun's Gas Station sells each gallon of gas for $3. What is the marginal product from hiring the fourth worker?

-Based on the production and revenue data in the above table, what is the price of the product?

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

If the value of marginal product of a factor of production exceeds the price of the factor, the

The supply of a renewable resource is perfectly elastic.

-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 Winnie maximizes his profit when he employs 4 workers, the wage rate is

-Based on the production and revenue data in the above table, if the wage rate is $35 per worker, how many workers will be hired?

-The table above gives information about the labor market in Lantis, a community in which the labor market is perfectly competitive. If the demand for labor decreases by 200 hours per day, the equilibrium wage rate falls to ________ an hour and the quantity of labor employed ________ hours per day.

If the interest rate is 5 percent, what is the present value of $100 that will be received 3 years from now?

Suppose the interest rate is 5 percent per year. The present value of $210 to be received one year from today is

Lynn owns Dust Bunnies, a cleaning company. In one week, she is able to clean 9 houses. If she hires an employee, together they are able to clean 15 houses per week. If Lynn charges $100 to clean a house, and she pays her employee $400 a week, should she hire this employee?

For a monopsony, the marginal cost of labor exceeds the wage rate because the firm must increase the wage it pays to all of its workers if it wishes to increase its employment.

-Consider the monopsony in the above figure. The 200th hour of labor creates how much added revenue per hour for the monopsony?

-Consider the monopsony in the above figure. The monopsony will hire ________ hours per week.

-If there is a monopsony operating in the labor market illustrated in the figure above, the equilibrium wage and quantity of labor hired is

St. Mary's Church has a balloon payment of $100,000 due on its mortgage in two years. If the interest rate is 8 percent, the present value of St. Mary's balloon mortgage payment is

What tools can unions use to increase the demand for union labor?

The process of converting a future amount of money into its value today is called

The demand curve for labor is negatively sloped only because the firm must lower its price if it wishes to sell more output.

-Sun's Gas Station is a firm operating in a perfectly competitive industry. Sun's Gas Station sells each gallon of gas for $3. What is the marginal product from hiring the fourth worker?

-Based on the production and revenue data in the above table, what is the price of the product?

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 table above gives information about the labor market in Lantis, a community in which the labor market is perfectly competitive. If the demand for labor decreases by 200 hours per day, the equilibrium wage rate falls to an hour and the quantity of labor employed hours per day.