Question 1

-In the table above, if the wage rate is $8.00 per hour, the profit-maximizing number of workers is

Accepted Answer

A)  1. 
B)  2. 
C)  4. 
D)  5. 
A)  1. 
B)  2. 
C)  4. 
D)  5.

Question 2

-The above table has the marginal product schedule for Nick's Dry Cleaners, a perfectly competitive dry cleaning firm.
a) If the price to dry clean a blouse is $8 each, complete the last column of the table.
b) If Nick can hire workers at the going wage rate of $16 an hour, how many workers does Nick hire?

Accepted Answer

@#IMG-DLM& a) The completed table is abo

Question 3

Suppose the price of a car wash falls to $3. The wage rate remains $60 per day.
a) What happens to the marginal product of labor? To the value of marginal product? To Sandy's demand for labor curve?
b) When the price of a car wash falls to $3, how many workers does Sandy employ?

Accepted Answer

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

Question 4

For a nonrenewable natural resource, such as oil, the equilibrium price ________ the market fundamentals price.

Accepted Answer

A)  is always the same as 
B)  can be greater than but not less than 
C)  can be less than but not greater than 
D)  can be less than, greater than, or equal to 
A)  is always the same as 
B)  can be greater than but not less than 
C)  can be less than but not greater than 
D)  can be less than, greater than, or equal to

Question 5

________ natural resources are natural resources that can be used repeatedly, and ________ natural resources are natural resources that can be used only once.

Accepted Answer

A)  Nonrenewable; renewable 
B)  Renewable; hydrocarbon 
C)  Renewable; nonrenewable 
D)  Non-fossil; fossil 
A)  Nonrenewable; renewable 
B)  Renewable; hydrocarbon 
C)  Renewable; nonrenewable 
D)  Non-fossil; fossil

Question 6

In which of the following situations is there most likely to be a monopsony?

Accepted Answer

A)  the market for farm workers in a large rural area 
B)  the market for advertising executives in New York City 
C)  the market for accountants in New York City 
D)  the market for NBA players drafted out of college by one NBA team 
A)  the market for farm workers in a large rural area 
B)  the market for advertising executives in New York City 
C)  the market for accountants in New York City 
D)  the market for NBA players drafted out of college by one NBA team

Question 7

As the quantity of labor increases, value of marginal product for a perfectly competitive firm

Accepted Answer

A)  decreases because the firm must lower its price to sell a larger quantity. 
B)  decreases because the marginal product of labor decreases. 
C)  decreases because marginal revenue decreases. 
D)  is constant because marginal revenue is constant. 
A)  decreases because the firm must lower its price to sell a larger quantity. 
B)  decreases because the marginal product of labor decreases. 
C)  decreases because marginal revenue decreases. 
D)  is constant because marginal revenue is constant.

Question 8

-The table above gives information about the labor market in Lantis, a community in which the labor market is perfectly competitive. If the price of the good increases and increases the value of marginal product of labor by $10 an hour, the equilibrium wage rate ________ an hour and the quantity of labor employed ________.

Accepted Answer

A)  rises to $10; increases to 600 
B)  stays at $15; decreases to 300 hours 
C)  rises to $20; increases to 500 hours 
D)  None of the above answers is correct. 
A)  rises to $10; increases to 600 
B)  stays at $15; decreases to 300 hours 
C)  rises to $20; increases to 500 hours 
D)  None of the above answers is correct.

Question 9

The lowest wage for which a person is willing to supply labor is known as the

Accepted Answer

A)  substitution wage. 
B)  income effect. 
C)  derived wage. 
D)  reservation wage. 
A)  substitution wage. 
B)  income effect. 
C)  derived wage. 
D)  reservation wage.

Question 10

-In the table above, the marginal product of the third unit of labor is ________ units of output.

Accepted Answer

A)  3 
B)  4 
C)  12 
D)  16 
A)  3 
B)  4 
C)  12 
D)  16

Question 11

With respect to labor supply, the substitution effect takes account of the point that at higher wage rates

Accepted Answer

A)  a person can afford to take more leisure. 
B)  leisure has become less expensive and so a person consumes less leisure. 
C)  there are no factors inducing a person to work less. 
D)  leisure has become more expensive and so a person consumes less leisure. 
A)  a person can afford to take more leisure. 
B)  leisure has become less expensive and so a person consumes less leisure. 
C)  there are no factors inducing a person to work less. 
D)  leisure has become more expensive and so a person consumes less leisure.

Question 12

If the interest rate is 20 percent, the present value of $10,000 to be received 20 years from today is about

Accepted Answer

A)  $6,944. 
B)  $14,400. 
C)  $383,376. 
D)  $261. 
A)  $6,944. 
B)  $14,400. 
C)  $383,376. 
D)  $261.

Question 13

The present value of a stream of future revenues varies ________ with the future revenues and ________ with the interest rate.

Accepted Answer

A)  inversely; inversely 
B)  directly; directly 
C)  inversely; directly 
D)  directly; inversely 
A)  inversely; inversely 
B)  directly; directly 
C)  inversely; directly 
D)  directly; inversely

Question 14

An increase in the price of a firm's output

Accepted Answer

A)  raises the value of marginal product of each unit of labor. 
B)  shifts the firm's demand for labor curve rightward. 
C)  results in the firm increasing the amount of output it produces. 
D)  All of the above answers are correct. 
A)  raises the value of marginal product of each unit of labor. 
B)  shifts the firm's demand for labor curve rightward. 
C)  results in the firm increasing the amount of output it produces. 
D)  All of the above answers are correct.

Question 15

-Consider the labor market depicted in the above figure. The competitive equilibrium would be for ________ hours of employment.

Accepted Answer

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

Question 16

According to the Hotelling Principle, the price of an nonrenewable resource

Accepted Answer

A)  falls slowly over time. 
B)  falls at a rate equal to the interest rate. 
C)  rises at a rate equal to the interest rate. 
D)  remains constant over time. 
A)  falls slowly over time. 
B)  falls at a rate equal to the interest rate. 
C)  rises at a rate equal to the interest rate. 
D)  remains constant over time.

Question 17

Suppose the price of oranges rises. As a result, the

Accepted Answer

A)  supply of orange pickers increases. 
B)  supply of orange pickers decreases. 
C)  demand for orange pickers increases. 
D)  demand for orange pickers decreases. 
A)  supply of orange pickers increases. 
B)  supply of orange pickers decreases. 
C)  demand for orange pickers increases. 
D)  demand for orange pickers decreases.

Question 18

-The above figure shows the market for labor. The employer is a monopsony. If the workers are unionized, the wage will be

Accepted Answer

A)  $5 per hour. 
B)  between $5 per hour and $15 per hour. 
C)  above $15 per hour. 
D)  less than if the workers were not unionized. 
A)  $5 per hour. 
B)  between $5 per hour and $15 per hour. 
C)  above $15 per hour. 
D)  less than if the workers were not unionized.

Question 19

According to a 1963 edition of the Effingham Daily News, Illinois Consolidated Telephone Co. switched from the switchboard system to the dial system at 12:01 a.m. Sunday, Aug. 18, 1963. Thirty miles of cable supported the new high-tech system. It took four weeks to lay the telephone lines that allowed Effingham residents to directly connect to each other through the telephone. How does the switch from the switchboard system to the dial system impact the labor market for switchboard operators?

Accepted Answer

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

Question 20

-In the figure above, the substitution effect outweighs the income effect in all segments EXCEPT

Accepted Answer

A)  0a. 
B)  0c. 
C)  bc. 
D)  cd. 
A)  0a. 
B)  0c. 
C)  bc. 
D)  cd.

-In the table above, if the wage rate is $8.00 per hour, the profit-maximizing number of workers is

Suppose the price of a car wash falls to $3. The wage rate remains $60 per day. a) What happens to the marginal product of labor? To the value of marginal product? To Sandy's demand for labor curve? b) When the price of a car wash falls to $3, how many workers does Sandy employ?

For a nonrenewable natural resource, such as oil, the equilibrium price ________ the market fundamentals price.

natural resources are natural resources that can be used repeatedly, and natural resources are natural resources that can be used only once.

In which of the following situations is there most likely to be a monopsony?

As the quantity of labor increases, value of marginal product for a perfectly competitive firm

The lowest wage for which a person is willing to supply labor is known as the

-In the table above, the marginal product of the third unit of labor is ________ units of output.

With respect to labor supply, the substitution effect takes account of the point that at higher wage rates

If the interest rate is 20 percent, the present value of $10,000 to be received 20 years from today is about

The present value of a stream of future revenues varies with the future revenues and with the interest rate.

An increase in the price of a firm's output

-Consider the labor market depicted in the above figure. The competitive equilibrium would be for ________ hours of employment.

According to the Hotelling Principle, the price of an nonrenewable resource

Suppose the price of oranges rises. As a result, the

-The above figure shows the market for labor. The employer is a monopsony. If the workers are unionized, the wage will be

-In the figure above, the substitution effect outweighs the income effect in all segments EXCEPT

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 the table above, if the wage rate is $8.00 per hour, the profit-maximizing number of workers is

Suppose the price of a car wash falls to $3. The wage rate remains $60 per day. a) What happens to the marginal product of labor? To the value of marginal product? To Sandy's demand for labor curve? b) When the price of a car wash falls to $3, how many workers does Sandy employ?

For a nonrenewable natural resource, such as oil, the equilibrium price ________ the market fundamentals price.

________ natural resources are natural resources that can be used repeatedly, and ________ natural resources are natural resources that can be used only once.

In which of the following situations is there most likely to be a monopsony?

As the quantity of labor increases, value of marginal product for a perfectly competitive firm

The lowest wage for which a person is willing to supply labor is known as the

-In the table above, the marginal product of the third unit of labor is ________ units of output.

With respect to labor supply, the substitution effect takes account of the point that at higher wage rates

If the interest rate is 20 percent, the present value of $10,000 to be received 20 years from today is about

The present value of a stream of future revenues varies ________ with the future revenues and ________ with the interest rate.

An increase in the price of a firm's output

-Consider the labor market depicted in the above figure. The competitive equilibrium would be for ________ hours of employment.

According to the Hotelling Principle, the price of an nonrenewable resource

Suppose the price of oranges rises. As a result, the

-The above figure shows the market for labor. The employer is a monopsony. If the workers are unionized, the wage will be

-In the figure above, the substitution effect outweighs the income effect in all segments EXCEPT

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

natural resources are natural resources that can be used repeatedly, and natural resources are natural resources that can be used only once.

The present value of a stream of future revenues varies with the future revenues and with the interest rate.