Question 1

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 2

$$\begin{array} { | c | c | c | } 
\hline & \begin{array} { c } 
\text { Quantity of } \
\text { Labor }
\end{array} & \begin{array} { c } 
\text { Total Product } \
\text { (gymnasts trained per hour) }
\end{array} \
\hline \text { A } & 0 & \
\hline \text { B } & 1 & 7 \
\hline \text { C } & 2 & 13 \
\hline \text { D } & 3 & 17 \
\hline \text { E } & 4 & 19 \
\hline \text { F } & 5 & 20 \
\hline
\end{array}$$
-The table shows information for Jen's Gymnastics.Jen hires coaches and can charge $20 per hour for gymnastics lessons.Jen's Gym pays coaches $30 per hour.The table shows that Jen's Gym will hire ________ coaches because ________.

Accepted Answer

A)  any number less than 5; the marginal product stops increasing with the fifth coach 
B)  4; the gym will earn a profit because the value of marginal profit exceeds the wage rate., but hiring a fifth coach will reduce profit 
C)  1; the value of marginal product is the highest 
D)  5; the marginal product is at its maximum 
E)  5; total product reaches its maximum 
A)  any number less than 5; the marginal product stops increasing with the fifth coach 
B)  4; the gym will earn a profit because the value of marginal profit exceeds the wage rate., but hiring a fifth coach will reduce profit 
C)  1; the value of marginal product is the highest 
D)  5; the marginal product is at its maximum 
E)  5; total product reaches its maximum

Question 3

$$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Number of } \
\text { workers }
\end{array} & \begin{array} { c } 
\text { Marginal product } \
\text { (bats per hour) }
\end{array} \
\hline 1 & 8 \
\hline 2 & 7 \
\hline 3 & 6 \
\hline 4 & 5 \
\hline 5 & 4 \
\hline
\end{array}$$ 
The table has the marginal products for workers at Bart's Bats, a baseball bat factory.
-Using the above table,suppose the price of a bat is $3.If the wage rate for a worker in a baseball bat manufacturing plant is $18 an hour,then the firm will hire ________ workers; if the wage rate falls to $12 an hour,then the firm will hire ________.

Accepted Answer

A)  1; 2 
B)  2; 4 
C)  3; 3 
D)  5; 4 
E)  3; 5 
A)  1; 2 
B)  2; 4 
C)  3; 3 
D)  5; 4 
E)  3; 5

Question 4

If a union restricts the supply of labor,it ________ the wage rate and ________ the level of employment.

Accepted Answer

A)  raises; decreases 
B)  raises; increases 
C)  raises; does not change 
D)  lowers; decreases 
E)  lowers; increases 
A)  raises; decreases 
B)  raises; increases 
C)  raises; does not change 
D)  lowers; decreases 
E)  lowers; increases

Question 5

An individual's labor supply curve eventually bends backward because at a high enough wage rate,

Accepted Answer

A)  people are willing to work more hours. 
B)  employers are willing to hire more workers. 
C)  people desire more leisure time. 
D)  very few workers are hired. 
E)  more people enter the labor market to search for jobs. 
A)  people are willing to work more hours. 
B)  employers are willing to hire more workers. 
C)  people desire more leisure time. 
D)  very few workers are hired. 
E)  more people enter the labor market to search for jobs.

Question 6

An increase in the rental rate of capital ________ the quantity of capital demanded and ________ the quantity of capital supplied.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
E)  does not change; does not change 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
E)  does not change; does not change

Question 7

What is the value of marginal product of labor? What is the formula that can be used to calculate? How does the value of the marginal product affect how much labor a firm hires?

Accepted Answer

The value of marginal product of labor i

Question 8

As the quantity of land used increases,its value of marginal product

Accepted Answer

A)  decreases and then eventually increases. 
B)  increases and then eventually decreases. 
C)  remains constant. 
D)  might increase, decrease, or remain constant depending if the rent for the land rises, falls, or does not change. 
E)  The premise of the question is wrong because land does not have a value of marginal product. 
A)  decreases and then eventually increases. 
B)  increases and then eventually decreases. 
C)  remains constant. 
D)  might increase, decrease, or remain constant depending if the rent for the land rises, falls, or does not change. 
E)  The premise of the question is wrong because land does not have a value of marginal product.

Question 9

If a union is able to organize workers in a competitive labor market but the union cannot affect the demand for its members' labor,then the wage rate ________ and the quantity of labor hired ________.

Accepted Answer

A)  rises; increases 
B)  rises; decreases 
C)  rises; does not change 
D)  does not change; increases 
E)  falls; decreases 
A)  rises; increases 
B)  rises; decreases 
C)  rises; does not change 
D)  does not change; increases 
E)  falls; decreases

Question 10

Why is the demand for labor a "derived demand"?

Accepted Answer

The demand for labor arises because we n

Question 11

$$\begin{array} { | c | c | c | } 
\hline & \begin{array} { c } 
\text { Quantity of } \
\text { Labor }
\end{array} & \begin{array} { c } 
\text { Total Product } \
\text { (gymnasts trained per hour) }
\end{array} \
\hline \text { A } & 0 & \
\hline \text { B } & 1 & 7 \
\hline \text { C } & 2 & 13 \
\hline \text { D } & 3 & 17 \
\hline \text { E } & 4 & 19 \
\hline \text { F } & 5 & 20 \
\hline
\end{array}$$
-The table shows information for Jen's Gymnastics.Jen's hires coaches and can charge $20 per hour for gymnastics.If the demand for Jen's Gymnastics coaching services increases and the price for coaching increases,Jen

Accepted Answer

A)  will hire more coaches because the value of marginal product has increased. 
B)  will hire fewer coaches because the higher price will decrease the number of gymnasts trained. 
C)  will hire fewer coaches in order to make a higher profit. 
D)  will hire more coaches because there will be movement up along the demand for labor curve. 
E)  may hire more or fewer coaches depending on how the higher price of lessons affects the business. 
A)  will hire more coaches because the value of marginal product has increased. 
B)  will hire fewer coaches because the higher price will decrease the number of gymnasts trained. 
C)  will hire fewer coaches in order to make a higher profit. 
D)  will hire more coaches because there will be movement up along the demand for labor curve. 
E)  may hire more or fewer coaches depending on how the higher price of lessons affects the business.

Question 12

"The decision to employ an additional unit of labor depends on whether the value of marginal product of labor is greater than or less than the wage rate." Is the previous statement correct or incorrect?

Accepted Answer

The statement is correct.If the value of

Question 13

If the wage rate exceeds the value of marginal product,a firm

Accepted Answer

A)  is maximizing its profit. 
B)  can increase its profit by hiring more workers. 
C)  can increase its profit by firing some workers. 
D)  can increase its profit by increasing the wage rate and not changing its employment. 
E)  can increase its profit by increasing the wage rate and increasing its employment. 
A)  is maximizing its profit. 
B)  can increase its profit by hiring more workers. 
C)  can increase its profit by firing some workers. 
D)  can increase its profit by increasing the wage rate and not changing its employment. 
E)  can increase its profit by increasing the wage rate and increasing its employment.

Question 14

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $75.Which of the following is correct?

Accepted Answer

A)  The firm is employing the profit-maximizing quantity of labor. 
B)  Too much labor is currently employed and the firm will lay off some workers. 
C)  Too few workers are currently employed and the firm will hire more workers. 
D)  The firm should shut down and produce nothing. 
E)  More information about the price of the product is needed to determine if the firm is hiring the profit-maximizing amount of labor. 
A)  The firm is employing the profit-maximizing quantity of labor. 
B)  Too much labor is currently employed and the firm will lay off some workers. 
C)  Too few workers are currently employed and the firm will hire more workers. 
D)  The firm should shut down and produce nothing. 
E)  More information about the price of the product is needed to determine if the firm is hiring the profit-maximizing amount of labor.

Question 15

Suppose in Chicago,at the going wage rate of $16.00 an hour,the quantity of lifeguards demanded exceeds the quantity supplied by 13,000 lifeguards.As a result,

Accepted Answer

A)  there is a surplus of lifeguards in Chicago. 
B)  there is a shortage of lifeguards in Chicago. 
C)  the lifeguard labor market is in equilibrium in Chicago. 
D)  wage rates will probably fall in this market. 
E)  the demand for labor of lifeguards in Chicago will decrease. 
A)  there is a surplus of lifeguards in Chicago. 
B)  there is a shortage of lifeguards in Chicago. 
C)  the lifeguard labor market is in equilibrium in Chicago. 
D)  wage rates will probably fall in this market. 
E)  the demand for labor of lifeguards in Chicago will decrease.

Question 16

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 17

-The above figure shows the demand for labor curve for workers at a Pizza Hut in Canada.If the wage rate is $6 per hour,then the
i.quantity of workers Pizza Hut demands is 10 workers.
ii.Pizza Hut would have been willing to hire the 6th worker even if they had to pay $7 per hour rather than $6 per hour.
iii.value of the marginal product of the 10th worker is $6 per hour.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii

Question 18

The price of an nonrenewable resource is expected to rise at a rate equal to the

Accepted Answer

A)  rate of supply. 
B)  rate of population growth. 
C)  rate of technological change. 
D)  rate of demand. 
E)  interest rate. 
A)  rate of supply. 
B)  rate of population growth. 
C)  rate of technological change. 
D)  rate of demand. 
E)  interest rate.

Question 19

-The above figure represents the market for teenage workers at fast-food restaurants in Kansas City.
a.What is the equilibrium wage rate and employment?
b.Describe the market at a wage rate of $6 per hour.
c.Describe the market at a wage rate of $12 an hour.
d.How would an increase in the number of young,married college graduates,who tend to eat at fast-food restaurants,affect the figure,the equilibrium wage rate,and employment?

Accepted Answer

a.The equilibrium wage rate is $8 an hou

Question 20

$$\begin{array} { c c } 
\hline \begin{array} { c } 
\text { Quantity of labor } \
\text { (trainers) }
\end{array} & \begin{array} { c } 
\text { Marginal product } \
\text { (clients per hour) }
\end{array} \
\hline 1 & 4 \
2 & 3 \
3 & 2 \
4 & 1 \
\hline
\end{array}$$
-Kevin owns a personal training gym in Laredo,Texas.He charges $41 per session.The above table shows the marginal product of trainers in Kevin's gym.If Kevin hires three trainers,the value of marginal product of the third trainer equals

Accepted Answer

A)  2 clients. 
B)  $82. 
C)  9 clients. 
D)  $369. 
E)  $123. 
A)  2 clients. 
B)  $82. 
C)  9 clients. 
D)  $369. 
E)  $123.

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

If a union restricts the supply of labor,it the wage rate and the level of employment.

An individual's labor supply curve eventually bends backward because at a high enough wage rate,

An increase in the rental rate of capital the quantity of capital demanded and the quantity of capital supplied.

What is the value of marginal product of labor? What is the formula that can be used to calculate? How does the value of the marginal product affect how much labor a firm hires?

As the quantity of land used increases,its value of marginal product

If a union is able to organize workers in a competitive labor market but the union cannot affect the demand for its members' labor,then the wage rate and the quantity of labor hired .

Why is the demand for labor a "derived demand"?

"The decision to employ an additional unit of labor depends on whether the value of marginal product of labor is greater than or less than the wage rate." Is the previous statement correct or incorrect?

If the wage rate exceeds the value of marginal product,a firm

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $75.Which of the following is correct?

Suppose in Chicago,at the going wage rate of $16.00 an hour,the quantity of lifeguards demanded exceeds the quantity supplied by 13,000 lifeguards.As a result,

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

The price of an nonrenewable resource is expected to rise at a rate equal to the

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Economic Inequality

Filters

Exam 19: Markets for Factors of Production

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

If a union restricts the supply of labor,it ________ the wage rate and ________ the level of employment.

An individual's labor supply curve eventually bends backward because at a high enough wage rate,

An increase in the rental rate of capital ________ the quantity of capital demanded and ________ the quantity of capital supplied.

What is the value of marginal product of labor? What is the formula that can be used to calculate? How does the value of the marginal product affect how much labor a firm hires?

As the quantity of land used increases,its value of marginal product

If a union is able to organize workers in a competitive labor market but the union cannot affect the demand for its members' labor,then the wage rate ________ and the quantity of labor hired ________.

Why is the demand for labor a "derived demand"?

"The decision to employ an additional unit of labor depends on whether the value of marginal product of labor is greater than or less than the wage rate." Is the previous statement correct or incorrect?

If the wage rate exceeds the value of marginal product,a firm

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $75.Which of the following is correct?

Suppose in Chicago,at the going wage rate of $16.00 an hour,the quantity of lifeguards demanded exceeds the quantity supplied by 13,000 lifeguards.As a result,

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

The price of an nonrenewable resource is expected to rise at a rate equal to the

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Economic Inequality

Filters

If a union restricts the supply of labor,it the wage rate and the level of employment.

An increase in the rental rate of capital the quantity of capital demanded and the quantity of capital supplied.

If a union is able to organize workers in a competitive labor market but the union cannot affect the demand for its members' labor,then the wage rate and the quantity of labor hired .