Question 1

The figure above shows a firm's VMP curve.
-Suppose that new technology raises the workers' marginal product.As a result,

Accepted Answer

A)  there is a movement upward along the curve, such as a movement from point C to point B. 
B)  there is a movement downward along the curve, such as a movement from point C to point D. 
C)  the curve shifts rightward. 
D)  the curve shifts leftward. 
E)  More information is needed to answer the question. 
A)  there is a movement upward along the curve, such as a movement from point C to point B. 
B)  there is a movement downward along the curve, such as a movement from point C to point D. 
C)  the curve shifts rightward. 
D)  the curve shifts leftward. 
E)  More information is needed to answer the question.

Question 2

Which of the following is  NOT a method by which unions try to increase the demand for the labor of their members?

Accepted Answer

A)  increasing the marginal product of union members 
B)  increasing the supply of the goods produced by union labor 
C)  supporting minimum wage laws 
D)  supporting import restrictions 
E)  supporting immigration restrictions 
A)  increasing the marginal product of union members 
B)  increasing the supply of the goods produced by union labor 
C)  supporting minimum wage laws 
D)  supporting import restrictions 
E)  supporting immigration restrictions

Question 3

An increase in the price of the firm's output leads to a

Accepted Answer

A)  movement up along the demand for labor curve. 
B)  movement down along the demand for labor curve. 
C)  rightward shift of the demand for labor curve. 
D)  leftward shift of the demand for labor curve. 
E)  rightward shift of the supply of labor curve. 
A)  movement up along the demand for labor curve. 
B)  movement down along the demand for labor curve. 
C)  rightward shift of the demand for labor curve. 
D)  leftward shift of the demand for labor curve. 
E)  rightward shift of the supply of labor curve.

Question 4

Which of the following statements about the supply of labor is correct?

Accepted Answer

A)  It is perfectly inelastic at whatever quantity individuals are willing to work. 
B)  An individual's supply of labor curve is always upward sloping, like the supply curves of other items. 
C)  It is perfectly price elastic at the current wage rate. 
D)  An individual's supply of labor curve can bend backwards. 
E)  The supply of labor curve is shaped like an upside-down U. 
A)  It is perfectly inelastic at whatever quantity individuals are willing to work. 
B)  An individual's supply of labor curve is always upward sloping, like the supply curves of other items. 
C)  It is perfectly price elastic at the current wage rate. 
D)  An individual's supply of labor curve can bend backwards. 
E)  The supply of labor curve is shaped like an upside-down U.

Question 5

The rule for maximizing profit is to hire labor up to the point at which the value of marginal product

Accepted Answer

A)  equals the wage rate. 
B)  is greater than the wage rate. 
C)  is less than the wage rate. 
D)  is a mirror image of the wage rate. 
E)  equals the price of the product produced. 
A)  equals the wage rate. 
B)  is greater than the wage rate. 
C)  is less than the wage rate. 
D)  is a mirror image of the wage rate. 
E)  equals the price of the product produced.

Question 6

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Quantity of } \
\text { labor }
\end{array} & \begin{array} { c } 
\text { Total product } \
\text { (pizzas per hour) }
\end{array} \
\hline 0 & 0 \
1 & 10 \
2 & 17 \
3 & 22 \
4 & 24 \
5 & 25
\end{array}$$
-The table above shows a the total product schedule of Piece a' Pi,a producer of pizza in a nearby college town.Suppose workers are paid $12 per hour and the price per pizza is $10.The value of marginal product of the fourth worker is ________ per hour.

Accepted Answer

A)  $240 
B)  $220 
C)  $20 
D)  $12 
E)  $24 
A)  $240 
B)  $220 
C)  $20 
D)  $12 
E)  $24

Question 7

The supply of nonrenewable natural resources is

Accepted Answer

A)  perfectly inelastic. 
B)  perfectly elastic. 
C)  always elastic but not necessarily perfectly elastic. 
D)  inelastic at high prices and elastic at low prices. 
E)  elastic at high prices and inelastic at low prices. 
A)  perfectly inelastic. 
B)  perfectly elastic. 
C)  always elastic but not necessarily perfectly elastic. 
D)  inelastic at high prices and elastic at low prices. 
E)  elastic at high prices and inelastic at low prices.

Question 8

The demand curve for a factor of production is

Accepted Answer

A)  the same as the factor's supply curve. 
B)  upward sloping. 
C)  the same as the factor's value of marginal product curve. 
D)  vertical. 
E)  None of the above answers is correct. 
A)  the same as the factor's supply curve. 
B)  upward sloping. 
C)  the same as the factor's value of marginal product curve. 
D)  vertical. 
E)  None of the above answers is correct.

Question 9

Because leisure time has value to many workers,as wages increase,the labor supply curve

Accepted Answer

A)  has a positive slope. 
B)  bends backwards and has a negative slope. 
C)  becomes a horizontal line. 
D)  becomes a vertical line. 
E)  bends forward and has a positive slope. 
A)  has a positive slope. 
B)  bends backwards and has a negative slope. 
C)  becomes a horizontal line. 
D)  becomes a vertical line. 
E)  bends forward and has a positive slope.

Question 10

If Saudi Arabia expects the price of oil to rise by a larger percentage than the interest rate,Saudi Arabia will ________.If Saudi Arabia expects the price of oil to rise by a smaller percentage than the interest rate,Saudi Arabia will ________.

Accepted Answer

A)  hold oil off the market; want to sell oil today 
B)  want to sell oil today; hold oil off the market 
C)  decrease its demand for oil; increase its demand for oil 
D)  increase its demand for oil; decrease its demand for oil 
E)  None of the above answers is correct because the interest rate has nothing to do with Saudi Arabia's decisions in the oil market. 
A)  hold oil off the market; want to sell oil today 
B)  want to sell oil today; hold oil off the market 
C)  decrease its demand for oil; increase its demand for oil 
D)  increase its demand for oil; decrease its demand for oil 
E)  None of the above answers is correct because the interest rate has nothing to do with Saudi Arabia's decisions in the oil market.

Question 11

If a firm finds itself at the point where the value of marginal product of labor is greater than its wage rate,then the firm

Accepted Answer

A)  stops hiring more workers but does not fire any because the firm is maximizing its profit. 
B)  decreases the number of workers it has hired in order to increase its profit. 
C)  increases the number of workers it hires in order to increase its profit. 
D)  increases sales to keep its employees busy. 
E)  changes its employment of workers and maximizes its profit by hiring the number of workers that makes the difference between the value of the marginal product and the wage rate as large as possible. 
A)  stops hiring more workers but does not fire any because the firm is maximizing its profit. 
B)  decreases the number of workers it has hired in order to increase its profit. 
C)  increases the number of workers it hires in order to increase its profit. 
D)  increases sales to keep its employees busy. 
E)  changes its employment of workers and maximizes its profit by hiring the number of workers that makes the difference between the value of the marginal product and the wage rate as large as possible.

Question 12

Explain why an individual's labor supply curve is backward bending.

Accepted Answer

An individual's labor supply curve bends

Question 13

The rental rate of land is the payment for the resource land.The lower the rental rate,the greater the

Accepted Answer

A)  demand for land. 
B)  quantity demanded of land. 
C)  supply of land. 
D)  elasticity of supply for land. 
E)  quantity supplied of land. 
A)  demand for land. 
B)  quantity demanded of land. 
C)  supply of land. 
D)  elasticity of supply for land. 
E)  quantity supplied of land.

Question 14

The four factors of production that produce goods and services are

Accepted Answer

A)  labor, capital, profits, and entrepreneurship. 
B)  money, labor, rent, and profit. 
C)  labor, capital, land, and entrepreneurship. 
D)  wages, interest, rent, and profit. 
E)  wages, prices, quantities, and employment. 
A)  labor, capital, profits, and entrepreneurship. 
B)  money, labor, rent, and profit. 
C)  labor, capital, land, and entrepreneurship. 
D)  wages, interest, rent, and profit. 
E)  wages, prices, quantities, and employment.

Question 15

The figure above shows a labor market in which a union has form
-Labor unions' support for programs that increase their members' marginal products represents an attempt to shift the

Accepted Answer

A)  labor demand curve from LD₀ to LD₁. 
B)  labor demand curve from LD₁ to LD₀. 
C)  labor supply curve from LS₀ to LS₁. 
D)  labor supply curve from LS₁ to LS₀. 
E)  None of the above answers is correct. 
A)  labor demand curve from LD₀ to LD₁. 
B)  labor demand curve from LD₁ to LD₀. 
C)  labor supply curve from LS₀ to LS₁. 
D)  labor supply curve from LS₁ to LS₀. 
E)  None of the above answers is correct.

Question 16

In the market for land,the supply curve is

Accepted Answer

A)  upward sloping. 
B)  downward sloping. 
C)  horizontal. 
D)  vertical. 
E)  U-shaped. 
A)  upward sloping. 
B)  downward sloping. 
C)  horizontal. 
D)  vertical. 
E)  U-shaped.

Question 17

Which of the following is NOT a factor of production?

Accepted Answer

A)  labor 
B)  capital 
C)  entrepreneurship 
D)  bonds 
E)  land 
A)  labor 
B)  capital 
C)  entrepreneurship 
D)  bonds 
E)  land

Question 18

What is the relationship between a firm's value of marginal product curve of labor and its demand for labor curve? Explain why this relationship exists.

Accepted Answer

The value of marginal product curve for

Question 19

The supply of labor curve for nurses shifts if

Accepted Answer

A)  the wage rate paid nurses increases. 
B)  there is an increase in the time spent in nursing school. 
C)  the value of marginal product of nurses increases. 
D)  the value of marginal product of nurses decreases. 
E)  the marginal product of nurses decreases. 
A)  the wage rate paid nurses increases. 
B)  there is an increase in the time spent in nursing school. 
C)  the value of marginal product of nurses increases. 
D)  the value of marginal product of nurses decreases. 
E)  the marginal product of nurses decreases.

Question 20

If both the demand for labor and the supply of labor increase,then the equilibrium wage rate ________ and the equilibrium quantity of labor ________.

Accepted Answer

A)  rises; increases 
B)  might rise, fall, or not change; increases 
C)  rises; might increase, decrease, or not change 
D)  falls; increases 
E)  falls; decreases 
A)  rises; increases 
B)  might rise, fall, or not change; increases 
C)  rises; might increase, decrease, or not change 
D)  falls; increases 
E)  falls; decreases

The figure above shows a firm's VMP curve. -Suppose that new technology raises the workers' marginal product.As a result,

Which of the following is NOT a method by which unions try to increase the demand for the labor of their members?

An increase in the price of the firm's output leads to a

Which of the following statements about the supply of labor is correct?

The rule for maximizing profit is to hire labor up to the point at which the value of marginal product

The supply of nonrenewable natural resources is

The demand curve for a factor of production is

Because leisure time has value to many workers,as wages increase,the labor supply curve

If Saudi Arabia expects the price of oil to rise by a larger percentage than the interest rate,Saudi Arabia will .If Saudi Arabia expects the price of oil to rise by a smaller percentage than the interest rate,Saudi Arabia will .

If a firm finds itself at the point where the value of marginal product of labor is greater than its wage rate,then the firm

Explain why an individual's labor supply curve is backward bending.

The rental rate of land is the payment for the resource land.The lower the rental rate,the greater the

The four factors of production that produce goods and services are

The figure above shows a labor market in which a union has form -Labor unions' support for programs that increase their members' marginal products represents an attempt to shift the

In the market for land,the supply curve is

Which of the following is NOT a factor of production?

What is the relationship between a firm's value of marginal product curve of labor and its demand for labor curve? Explain why this relationship exists.

The supply of labor curve for nurses shifts if

If both the demand for labor and the supply of labor increase,then the equilibrium wage rate and the equilibrium quantity of labor .

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

The figure above shows a firm's VMP curve. -Suppose that new technology raises the workers' marginal product.As a result,

Which of the following is NOT a method by which unions try to increase the demand for the labor of their members?

An increase in the price of the firm's output leads to a

Which of the following statements about the supply of labor is correct?

The rule for maximizing profit is to hire labor up to the point at which the value of marginal product

The supply of nonrenewable natural resources is

The demand curve for a factor of production is

Because leisure time has value to many workers,as wages increase,the labor supply curve

If Saudi Arabia expects the price of oil to rise by a larger percentage than the interest rate,Saudi Arabia will ________.If Saudi Arabia expects the price of oil to rise by a smaller percentage than the interest rate,Saudi Arabia will ________.

If a firm finds itself at the point where the value of marginal product of labor is greater than its wage rate,then the firm

Explain why an individual's labor supply curve is backward bending.

The rental rate of land is the payment for the resource land.The lower the rental rate,the greater the

The four factors of production that produce goods and services are

The figure above shows a labor market in which a union has form -Labor unions' support for programs that increase their members' marginal products represents an attempt to shift the

In the market for land,the supply curve is

Which of the following is NOT a factor of production?

What is the relationship between a firm's value of marginal product curve of labor and its demand for labor curve? Explain why this relationship exists.

The supply of labor curve for nurses shifts if

If both the demand for labor and the supply of labor increase,then the equilibrium wage rate ________ and the equilibrium quantity of labor ________.

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 Saudi Arabia expects the price of oil to rise by a larger percentage than the interest rate,Saudi Arabia will .If Saudi Arabia expects the price of oil to rise by a smaller percentage than the interest rate,Saudi Arabia will .

If both the demand for labor and the supply of labor increase,then the equilibrium wage rate and the equilibrium quantity of labor .