Question 1

According to the information provided, what is Amy's opportunity cost of taking an hour off work to go cycling during the winter months?

Accepted Answer

A) less than $20 
B) $20 
C) $25 
D) between $20 and $25 
A) less than $20 
B) $20 
C) $25 
D) between $20 and $25

Question 2

If the forestry sector decreases its demand for land, then the equilibrium land rental price will rise but the land made available for forestry will not change.

Accepted Answer

A) True 
 B)False

Question 3

The rental price of capital is:

Accepted Answer

A) the price paid to use capital for a limited time period 
B) the price paid for ownership of the capital 
C) always more than the purchase price 
D) determined outside the realm of factor markets 
A) the price paid to use capital for a limited time period 
B) the price paid for ownership of the capital 
C) always more than the purchase price 
D) determined outside the realm of factor markets

Question 4

The market wage is:

Accepted Answer

A) unaffected by the stock of labour 
B) the purchase price of a labourer 
C) the rental price of labour services 
D) a payment to labour stock 
A) unaffected by the stock of labour 
B) the purchase price of a labourer 
C) the rental price of labour services 
D) a payment to labour stock

Question 5

A firm's demand for labour is derived out of:

Accepted Answer

A) profit maximisation 
B) cost minimisation 
C) revenue maximisation 
D) the price of a good 
A) profit maximisation 
B) cost minimisation 
C) revenue maximisation 
D) the price of a good

Question 6

Changes in the capital stock will often lead to changes in wages.

Accepted Answer

A) True 
 B)False

Question 7

The wage rate both balances the supply and demand for labour and equals the value of the marginal product of labour.

Accepted Answer

A) True 
 B)False

Question 8

If land used for forestry loses its fertility, then over time the value of the marginal product of land will fall and the rental price on that land will fall.

Accepted Answer

A) True 
 B)False

Question 9

Assume that the South African labour market was in equilibrium before the Zimbabwean situation.At the equilibrium wage that prevailed in South Africa prior to the Zimbabwean situation, what would the post-war status of the labour market be?

Accepted Answer

A) equilibrium 
B) a surplus of labour 
C) a surplus of jobs 
D) possibly any of the above 
A) equilibrium 
B) a surplus of labour 
C) a surplus of jobs 
D) possibly any of the above

Question 10

What happens to the labour supply in the pear-picking market when the apple pickers get a wage rise?

Accepted Answer

A) the labour supply will fall 
B) the labour supply will stay constant until the wages paid to pear pickers change 
C) the invisible hand of the market will cause an increase in supply 
D) it may fall or rise, depending on the price of pears 
A) the labour supply will fall 
B) the labour supply will stay constant until the wages paid to pear pickers change 
C) the invisible hand of the market will cause an increase in supply 
D) it may fall or rise, depending on the price of pears

Question 11

Graph 18-2  
-Refer to Graph 18-2.If the marginal product of labour falls, which of the following will occur?
(i) the value of the marginal product of labour will fall
(ii) the quantity of labour demanded will fall below L1
(iii) the supply curve will remain unchanged

Accepted Answer

A) (i) and (ii) 
B) (ii) and (iii) 
C) (i) and (iii) 
D) (i), (ii) and (iii) 
A) (i) and (ii) 
B) (ii) and (iii) 
C) (i) and (iii) 
D) (i), (ii) and (iii)

Question 12

Which of the following factors of production are most likely to be used by a typical firm?
(i) labour
(ii) land
(iii) equity

Accepted Answer

A) (i) and (iii) 
B) (ii) and (iii) 
C) (i) and (ii) 
D) (i), (ii) and (iii) 
A) (i) and (iii) 
B) (ii) and (iii) 
C) (i) and (ii) 
D) (i), (ii) and (iii)

Question 13

Refer to the information provided.If Gertrude is a competitor in both the fresh tuna market and the market for crew workers, she is called a price:

Accepted Answer

A) taker in the tuna market and a wage setter in the crew market 
B) taker in both markets 
C) taker in the crew market and a price setter in the tuna market 
D) setter in both markets 
A) taker in the tuna market and a wage setter in the crew market 
B) taker in both markets 
C) taker in the crew market and a price setter in the tuna market 
D) setter in both markets

Question 14

To restore equilibrium, an increase in labour demand must be met with a rightwards shift in the labour supply curve.

Accepted Answer

A) True 
 B)False

Question 15

Diminishing marginal product serves to have what effect on the shape of the production function?

Accepted Answer

A) the slope of the production function increases as the units of input increases 
B) the production function decreases at a decreasing rate 
C) it becomes flatter as input usage increases 
D) all of the above 
A) the slope of the production function increases as the units of input increases 
B) the production function decreases at a decreasing rate 
C) it becomes flatter as input usage increases 
D) all of the above

Question 16

The purchase price of land is:

Accepted Answer

A) the price received from the flow of some land services 
B) the value of the land to the firm over a time period 
C) always less than the rental price 
D) the price a person pays to own the factor of production 
A) the price received from the flow of some land services 
B) the value of the land to the firm over a time period 
C) always less than the rental price 
D) the price a person pays to own the factor of production

Question 17

A competitive, profit-maximising firm hires workers until:

Accepted Answer

A) unemployment rates are zero 
B) the value of the marginal product equals the wage 
C) marginal product equals zero 
D) marginal revenue equals zero 
A) unemployment rates are zero 
B) the value of the marginal product equals the wage 
C) marginal product equals zero 
D) marginal revenue equals zero

Question 18

A competitive firm will hire workers up to the point at which the value of the marginal product equals the:

Accepted Answer

A) wage 
B) price 
C) total revenue 
D) total cost 
A) wage 
B) price 
C) total revenue 
D) total cost

Question 19

The labour supply curve is fundamentally a representation of the trade-off people face between which of the following?

Accepted Answer

A) work and wage 
B) wage and productivity 
C) work and leisure 
D) technology and wage 
A) work and wage 
B) wage and productivity 
C) work and leisure 
D) technology and wage

Question 20

Jack the physical therapist invents a new wrist-brace that allows assembly line labourers to work without suffering the effects of carpal-tunnel syndrome, thus making the workers more productive.The demand for assembly line workers will:

Accepted Answer

A) fall 
B) rise 
C) remain unchanged 
D) fall as long as price exceeds marginal cost 
A) fall 
B) rise 
C) remain unchanged 
D) fall as long as price exceeds marginal cost

Exam 19: The Markets for the Factors of Production

According to the information provided, what is Amy's opportunity cost of taking an hour off work to go cycling during the winter months?

If the forestry sector decreases its demand for land, then the equilibrium land rental price will rise but the land made available for forestry will not change.

The rental price of capital is:

The market wage is:

A firm's demand for labour is derived out of:

Changes in the capital stock will often lead to changes in wages.

The wage rate both balances the supply and demand for labour and equals the value of the marginal product of labour.

If land used for forestry loses its fertility, then over time the value of the marginal product of land will fall and the rental price on that land will fall.

Assume that the South African labour market was in equilibrium before the Zimbabwean situation.At the equilibrium wage that prevailed in South Africa prior to the Zimbabwean situation, what would the post-war status of the labour market be?

What happens to the labour supply in the pear-picking market when the apple pickers get a wage rise?

Graph 18-2 -Refer to Graph 18-2.If the marginal product of labour falls, which of the following will occur? (i) the value of the marginal product of labour will fall (ii) the quantity of labour demanded will fall below L1 (iii) the supply curve will remain unchanged

Which of the following factors of production are most likely to be used by a typical firm? (i) labour (ii) land (iii) equity

Refer to the information provided.If Gertrude is a competitor in both the fresh tuna market and the market for crew workers, she is called a price:

To restore equilibrium, an increase in labour demand must be met with a rightwards shift in the labour supply curve.

Diminishing marginal product serves to have what effect on the shape of the production function?

The purchase price of land is:

A competitive, profit-maximising firm hires workers until:

A competitive firm will hire workers up to the point at which the value of the marginal product equals the:

The labour supply curve is fundamentally a representation of the trade-off people face between which of the following?

Jack the physical therapist invents a new wrist-brace that allows assembly line labourers to work without suffering the effects of carpal-tunnel syndrome, thus making the workers more productive.The demand for assembly line workers will:

Ten Lessons From Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand and Government Policies

Consumers, Producers and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Business Strategy and Oligopoly

Competition Policy

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Global Financial Crisis of 2008 and Beyond

Five Debates Over Macroeconomic Policy

Filters

Graph 18-2 -Refer to Graph 18-2.If the marginal product of labour falls, which of the following will occur? (i) the value of the marginal product of labour will fall (ii) the quantity of labour demanded will fall below L₁ (iii) the supply curve will remain unchanged