Question 1

Which of the following statements about a firm's demand for labor curve and its value of marginal product of labor curve is true?

Accepted Answer

A)  The value of marginal product curve slopes upward and the demand for labor curve slopes downward. 
B)  The demand for labor curve shows the amount of labor firms will hire based on the wage rate while the value of marginal product curve shows the amount of output supplied based on the wage rate. 
C)  The value of marginal product curve is steeper than the demand for labor curve. 
D)  The demand for labor curve is the same as the value of marginal product curve. 
E)  The value of marginal product curve lies above the demand for labor curve. 
A)  The value of marginal product curve slopes upward and the demand for labor curve slopes downward. 
B)  The demand for labor curve shows the amount of labor firms will hire based on the wage rate while the value of marginal product curve shows the amount of output supplied based on the wage rate. 
C)  The value of marginal product curve is steeper than the demand for labor curve. 
D)  The demand for labor curve is the same as the value of marginal product curve. 
E)  The value of marginal product curve lies above the demand for labor curve.

Question 2

What is the Hotelling Principle? Have resource prices behaved as the principle predicts?

Accepted Answer

The Hotelling Principle states that the

Question 3

When more people remain in school for full-time education and training,the supply of low-skilled labor ________ and the supply of high-skilled labor ________.

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 4

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

Accepted Answer

A)  13; 2 coaches can train 13 gymnasts 
B)  6; the second coach can train an extra 6 gymnasts 
C)  $120; the second coach's marginal product is 6 gymnasts and lessons cost $20 
D)  $260; the first two coaches can earn $20 for each of the 13 gymnasts 
E)  $40; each coach can charge $20 per student 
A)  13; 2 coaches can train 13 gymnasts 
B)  6; the second coach can train an extra 6 gymnasts 
C)  $120; the second coach's marginal product is 6 gymnasts and lessons cost $20 
D)  $260; the first two coaches can earn $20 for each of the 13 gymnasts 
E)  $40; each coach can charge $20 per student

Question 5

If the marginal product of labor increases,the firm's demand for labor curve

Accepted Answer

A)  does not shift, and there is no movement along it. 
B)  shifts leftward. 
C)  shifts rightward. 
D)  does not shift but there is a movement along it. 
E)  might shift leftward or rightward depending on whether the demand for the firm's product is elastic or inelastic. 
A)  does not shift, and there is no movement along it. 
B)  shifts leftward. 
C)  shifts rightward. 
D)  does not shift but there is a movement along it. 
E)  might shift leftward or rightward depending on whether the demand for the firm's product is elastic or inelastic.

Question 6

In part,the demand for labor depends on the

Accepted Answer

A)  supply of labor. 
B)  number of workers available. 
C)  price of the firm's output. 
D)  workers' income. 
E)  wage rate at which the labor supply curve starts to bend backwards. 
A)  supply of labor. 
B)  number of workers available. 
C)  price of the firm's output. 
D)  workers' income. 
E)  wage rate at which the labor supply curve starts to bend backwards.

Question 7

The value of marginal product of labor

Accepted Answer

A)  always increases as more labor is hired. 
B)  is constant as long as each worker is paid the same wage rate. 
C)  declines only if each worker is paid more than the previous worker. 
D)  at some point declines as more workers are hired. 
E)  at first decreases and then increases as more workers are hired. 
A)  always increases as more labor is hired. 
B)  is constant as long as each worker is paid the same wage rate. 
C)  declines only if each worker is paid more than the previous worker. 
D)  at some point declines as more workers are hired. 
E)  at first decreases and then increases as more workers are hired.

Question 8

A producer's supply of a nonrenewable natural resource is

Accepted Answer

A)  always decreasing because the resource is always being used. 
B)  perfectly inelastic. 
C)  perfectly elastic. 
D)  not relevant because nonrenewable resources are used only once. 
E)  determined by the value of the resource's marginal product. 
A)  always decreasing because the resource is always being used. 
B)  perfectly inelastic. 
C)  perfectly elastic. 
D)  not relevant because nonrenewable resources are used only once. 
E)  determined by the value of the resource's marginal product.

Question 9

The value of marginal product is equal to the

Accepted Answer

A)  additional revenue from selling one more unit of the product. 
B)  change in total revenue from selling one more unit of product. 
C)  additional cost of hiring one more unit of a factor of production. 
D)  change in revenue from hiring one more unit of a factor of production. 
E)  change in total cost when one more unit of the product is produced. 
A)  additional revenue from selling one more unit of the product. 
B)  change in total revenue from selling one more unit of product. 
C)  additional cost of hiring one more unit of a factor of production. 
D)  change in revenue from hiring one more unit of a factor of production. 
E)  change in total cost when one more unit of the product is produced.

Question 10

Entrepreneurship differs from the other factors of production because it

Accepted Answer

A)  is not real. 
B)  is the most important. 
C)  has only existed since the new economy of the 1990s. 
D)  is not traded in a factor market. 
E)  is not paid. 
A)  is not real. 
B)  is the most important. 
C)  has only existed since the new economy of the 1990s. 
D)  is not traded in a factor market. 
E)  is not paid.

Question 11

If the value of marginal product of the 10th worker is $60,then the

Accepted Answer

A)  quantity of labor demanded when the wage rate is $60 will be 10 workers. 
B)  wage rate of the 10th worker will be $6. 
C)  firm will not hire the worker if the wage rate is less than $60. 
D)  marginal cost of the 10th worker will be $6. 
E)  quantity of labor demanded when the wage rate is $6 will be 10 workers. 
A)  quantity of labor demanded when the wage rate is $60 will be 10 workers. 
B)  wage rate of the 10th worker will be $6. 
C)  firm will not hire the worker if the wage rate is less than $60. 
D)  marginal cost of the 10th worker will be $6. 
E)  quantity of labor demanded when the wage rate is $6 will be 10 workers.

Question 12

If a firm uses new technology that increases its demand for labor,the firm's demand for labor curve

Accepted Answer

A)  shifts leftward. 
B)  shifts rightward only if the demand for labor is elastic. 
C)  shifts rightward no matter if the demand for labor is elastic or inelastic. 
D)  does not shift, but there is a movement along it. 
E)  shifts rightward only if the demand for labor is inelastic. 
A)  shifts leftward. 
B)  shifts rightward only if the demand for labor is elastic. 
C)  shifts rightward no matter if the demand for labor is elastic or inelastic. 
D)  does not shift, but there is a movement along it. 
E)  shifts rightward only if the demand for labor is inelastic.

Question 13

The aggregate quantity of land supplied

Accepted Answer

A)  varies depending on its price. 
B)  depends on the buying and selling decisions of individuals. 
C)  is constantly increasing. 
D)  is fixed. 
E)  is perfectly elastic. 
A)  varies depending on its price. 
B)  depends on the buying and selling decisions of individuals. 
C)  is constantly increasing. 
D)  is fixed. 
E)  is perfectly elastic.

Question 14

The table below has the marginal product schedule for a firm.If the price of the product is $2 a unit,complete the table.If the wage rate is $8 an hour,how many workers does the firm hire?
 $$\begin{array} { c c c } 
\begin{array} { c } 
\text { Quantity of } \
\text { labor } \
\text { (workers) }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { product } \
\text { (units per hour) }
\end{array} & \begin{array} { c } 
\text { Value of marginal } \
\text { product } \
\text { (dollars) }
\end{array} \
\hline 1 & 10 & - \
2 & 8 & - \
3 & 6 & - \
4 & 4 & - \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { c c c } 
\begin{array}

Question 15

The demand for a factor of production is called a derived demand because it is derived from

Accepted Answer

A)  the demand for goods and services produced by the factor of production. 
B)  a table of specific prices and quantities. 
C)  the ideas of an entrepreneur. 
D)  a financial market. 
E)  the supply of the factor of production. 
A)  the demand for goods and services produced by the factor of production. 
B)  a table of specific prices and quantities. 
C)  the ideas of an entrepreneur. 
D)  a financial market. 
E)  the supply of the factor of production.

Question 16

As the wage rate rises,the quantity of labor an individual supplies

Accepted Answer

A)  decreases at all wage rates. 
B)  initially decreases at low wage rates and then increases at high wage rates. 
C)  increases at all wage rates. 
D)  initially increases at low wage rates and then decreases at high wage rates. 
E)  does not change. 
A)  decreases at all wage rates. 
B)  initially decreases at low wage rates and then increases at high wage rates. 
C)  increases at all wage rates. 
D)  initially increases at low wage rates and then decreases at high wage rates. 
E)  does not change.

Question 17

The demand for carpenters needed to build houses represents a

Accepted Answer

A)  direct demand. 
B)  derived demand. 
C)  marginal demand/cost for input. 
D)  supplied demand. 
E)  directed supply. 
A)  direct demand. 
B)  derived demand. 
C)  marginal demand/cost for input. 
D)  supplied demand. 
E)  directed supply.

Question 18

The value of marginal product of labor is equal to the marginal product of labor ________ the price of a unit of output.

Accepted Answer

A)  divided by 
B)  multiplied by 
C)  minus 
D)  plus 
E)  squared and then multiplied by 
A)  divided by 
B)  multiplied by 
C)  minus 
D)  plus 
E)  squared and then multiplied by

Question 19

As the population of Las Vegas increased,what happened to the supply of labor and the supply curve of labor in Las Vegas?

Accepted Answer

As the population of Las Vegas

Question 20

If the supply of labor decreases,then the equilibrium wage rate ________ and equilibrium employment ________.

Accepted Answer

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

Which of the following statements about a firm's demand for labor curve and its value of marginal product of labor curve is true?

What is the Hotelling Principle? Have resource prices behaved as the principle predicts?

When more people remain in school for full-time education and training,the supply of low-skilled labor and the supply of high-skilled labor .

Quantity of Labor Total Product (gymnasts trained per hour) A 0 B 1 7 C 2 13 D 3 17 E 4 19 F 5 20 -The table shows information for Jen's Gymnastics.Jen hires coaches and can charge $20 per hour for gymnastics lessons.The value of marginal product for the second coach is because .

If the marginal product of labor increases,the firm's demand for labor curve

In part,the demand for labor depends on the

The value of marginal product of labor

A producer's supply of a nonrenewable natural resource is

The value of marginal product is equal to the

Entrepreneurship differs from the other factors of production because it

If the value of marginal product of the 10th worker is $60,then the

If a firm uses new technology that increases its demand for labor,the firm's demand for labor curve

The aggregate quantity of land supplied

The demand for a factor of production is called a derived demand because it is derived from

As the wage rate rises,the quantity of labor an individual supplies

The demand for carpenters needed to build houses represents a

The value of marginal product of labor is equal to the marginal product of labor ________ the price of a unit of output.

As the population of Las Vegas increased,what happened to the supply of labor and the supply curve of labor in Las Vegas?

If the supply of labor decreases,then the equilibrium wage rate and equilibrium employment .

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

Which of the following statements about a firm's demand for labor curve and its value of marginal product of labor curve is true?

What is the Hotelling Principle? Have resource prices behaved as the principle predicts?

When more people remain in school for full-time education and training,the supply of low-skilled labor ________ and the supply of high-skilled labor ________.

Quantity of Labor Total Product (gymnasts trained per hour) A 0 B 1 7 C 2 13 D 3 17 E 4 19 F 5 20 -The table shows information for Jen's Gymnastics.Jen hires coaches and can charge $20 per hour for gymnastics lessons.The value of marginal product for the second coach is ________ because ________.

If the marginal product of labor increases,the firm's demand for labor curve

In part,the demand for labor depends on the

The value of marginal product of labor

A producer's supply of a nonrenewable natural resource is

The value of marginal product is equal to the

Entrepreneurship differs from the other factors of production because it

If the value of marginal product of the 10th worker is $60,then the

If a firm uses new technology that increases its demand for labor,the firm's demand for labor curve

The aggregate quantity of land supplied

The demand for a factor of production is called a derived demand because it is derived from

As the wage rate rises,the quantity of labor an individual supplies

The demand for carpenters needed to build houses represents a

The value of marginal product of labor is equal to the marginal product of labor ________ the price of a unit of output.

As the population of Las Vegas increased,what happened to the supply of labor and the supply curve of labor in Las Vegas?

If the supply of labor decreases,then the equilibrium wage rate ________ and equilibrium employment ________.

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

When more people remain in school for full-time education and training,the supply of low-skilled labor and the supply of high-skilled labor .

Quantity of Labor Total Product (gymnasts trained per hour) A 0 B 1 7 C 2 13 D 3 17 E 4 19 F 5 20 -The table shows information for Jen's Gymnastics.Jen hires coaches and can charge $20 per hour for gymnastics lessons.The value of marginal product for the second coach is because .

If the supply of labor decreases,then the equilibrium wage rate and equilibrium employment .