Question 1

Derived demand means that the demand for a factor of production is derived from the

Accepted Answer

A)  supply of that factor of production. 
B)  price of that factor of production. 
C)  demand for the goods and services the factor of production is used to produce. 
D)  costs of production. 
E)  government, which forces large firms to hire at least some minimum number of different resources. 
A)  supply of that factor of production. 
B)  price of that factor of production. 
C)  demand for the goods and services the factor of production is used to produce. 
D)  costs of production. 
E)  government, which forces large firms to hire at least some minimum number of different resources.

Question 2

The medical field requires doctors to pass exams in order to earn a license to practice medicine.This requirement ________ doctors' salaries because ________.

Accepted Answer

A)  increases; the supply of doctors decreases and fewer doctors are employed 
B)  increases; the supply of doctors increases and as a result they are better trained 
C)  increases; the demand for doctors decreases because they charge higher prices 
D)  decreases; the supply of doctors decreases due to the tougher requirements 
E)  decreases; fewer people go to doctors because of the high prices 
A)  increases; the supply of doctors decreases and fewer doctors are employed 
B)  increases; the supply of doctors increases and as a result they are better trained 
C)  increases; the demand for doctors decreases because they charge higher prices 
D)  decreases; the supply of doctors decreases due to the tougher requirements 
E)  decreases; fewer people go to doctors because of the high prices

Question 3

"As the quantity of labor hired increases,the value of marginal product stays constant as long as the wage rate is constant for all workers." Is the previous statement correct or incorrect? Explain your answer.

Accepted Answer

The statement is incorrect.The value of

Question 4

The demand for labor curve slopes downward because

Accepted Answer

A)  it takes more workers to produce more output. 
B)  the value of marginal product of labor diminishes as the quantity of labor employed increases. 
C)  at lower wages, people are not willing to work as many hours. 
D)  wages are fixed. 
E)  the supply of labor curve is upward sloping. 
A)  it takes more workers to produce more output. 
B)  the value of marginal product of labor diminishes as the quantity of labor employed increases. 
C)  at lower wages, people are not willing to work as many hours. 
D)  wages are fixed. 
E)  the supply of labor curve is upward sloping.

Question 5

The figure above shows a labor market in which a union has form
-Labor unions' support for import restrictions 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 6

The value of the marginal product of labor is calculated by multiplying the ________ by the ________.

Accepted Answer

A)  quantity of labor; wage rate 
B)  total product; wage rate 
C)  marginal product of labor; price of a unit of the output 
D)  wage rate; price of a unit of the output 
E)  marginal product of labor; wage rate 
A)  quantity of labor; wage rate 
B)  total product; wage rate 
C)  marginal product of labor; price of a unit of the output 
D)  wage rate; price of a unit of the output 
E)  marginal product of labor; wage rate

Question 7

-The figure above shows the market supply of labor curve.Which of the following might be the reason the labor supply curve shifted from S₀ to S₁?

Accepted Answer

A)  an increase in technology 
B)  a decrease in technology 
C)  a decrease in the number of women in the work force 
D)  an increase in the adult population 
E)  an increase in the wage rate 
A)  an increase in technology 
B)  a decrease in technology 
C)  a decrease in the number of women in the work force 
D)  an increase in the adult population 
E)  an increase in the wage rate

Question 8

-Refer to the figures above to answer this question.Figure ________ represents the market for ________ because its supply is ________.

Accepted Answer

A)  A; land; perfectly inelastic because the quantity of land is fixed 
B)  A; a nonrenewable resource; inelastic because reserves can always be discovered 
C)  B; land; inelastic given only a limited amount of land is available 
D)  B; a nonrenewable resource; demand changes as the economy changes 
E)  B; land; elastic as predicted by the Hotelling Principle 
A)  A; land; perfectly inelastic because the quantity of land is fixed 
B)  A; a nonrenewable resource; inelastic because reserves can always be discovered 
C)  B; land; inelastic given only a limited amount of land is available 
D)  B; a nonrenewable resource; demand changes as the economy changes 
E)  B; land; elastic as predicted by the Hotelling Principle

Question 9

-Peyton is a personal trainer and works at several gyms in her neighborhood.Peyton's labor supply curve is shown above.Which of the following statements is true regarding Peyton's labor supply?
i.Peyton is willing to supply more labor and give up leisure at wages between $50 and $75 per hour.
ii.Peyton will not work for less than $30 per hour.
iii.If the wage increases higher than $75 per hour,Peyton will choose to take more leisure.

Accepted Answer

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

Question 10

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

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
E)  More information is needed to determine how many workers will be hired. 
A)  1 
B)  2 
C)  3 
D)  4 
E)  More information is needed to determine how many workers will be hired.

Question 11

The table below has the marginal product schedule for Nick's Pizza.
a.If pizza sells for $8 each,complete the last column of the table.
 $$\begin{array} { c c c } 
\begin{array} { c } 
\text { Quantity of } \
\text { labor } \
\text { (workers) }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { product } \
\text { (pizzas per hour) }
\end{array} & \begin{array} { c } 
\text { Value of marginal } \
\text { product } \
\text { (dollars) }
\end{array} \
\hline 1 & 4 & - \
2 & 4 & - \
3 & 3 & - \
4 & 2 & - \
5 & 1 & - \
\hline
\end{array}$$ 
b.If Nick can hire workers at the going wage rate of $16 an hour,how many workers does Nick hire?

Accepted Answer

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

Question 12

The supply of each particular block of land is

Accepted Answer

A)  perfectly elastic. 
B)  unit elastic. 
C)  elastic but not perfectly elastic. 
D)  perfectly inelastic. 
E)  inelastic but not perfectly inelastic. 
A)  perfectly elastic. 
B)  unit elastic. 
C)  elastic but not perfectly elastic. 
D)  perfectly inelastic. 
E)  inelastic but not perfectly inelastic.

Question 13

The demand for labor is derived from the

Accepted Answer

A)  supply of labor. 
B)  wage rate. 
C)  supply of the good the labor is used to produce. 
D)  demand for the goods and services the labor helps produce. 
E)  supply of all the other factors of production that can be substituted for labor. 
A)  supply of labor. 
B)  wage rate. 
C)  supply of the good the labor is used to produce. 
D)  demand for the goods and services the labor helps produce. 
E)  supply of all the other factors of production that can be substituted for labor.

Question 14

Unions support immigration restrictions because the restrictions create

Accepted Answer

A)  an increase in the supply of union labor. 
B)  a decrease in the supply of union labor. 
C)  unemployment. 
D)  an increase in the demand for union labor. 
E)  a decrease in the demand for union labor. 
A)  an increase in the supply of union labor. 
B)  a decrease in the supply of union labor. 
C)  unemployment. 
D)  an increase in the demand for union labor. 
E)  a decrease in the demand for union labor.

Question 15

If the price of movie tickets increases,there is

Accepted Answer

A)  an increase in the demand for actors and actresses. 
B)  a decrease in the demand for actors and actresses. 
C)  no change in the demand for actors and actresses. 
D)  a decrease in the supply of actors and actresses. 
E)  an increase in the supply of actors and actresses. 
A)  an increase in the demand for actors and actresses. 
B)  a decrease in the demand for actors and actresses. 
C)  no change in the demand for actors and actresses. 
D)  a decrease in the supply of actors and actresses. 
E)  an increase in the supply of actors and actresses.

Question 16

How does an increase in the adult population affect the labor market?

Accepted Answer

A)  The demand for labor will become more inelastic. 
B)  The supply of labor will decrease. 
C)  The supply of labor will increase. 
D)  The demand for labor will decrease. 
E)  The demand for labor will increase. 
A)  The demand for labor will become more inelastic. 
B)  The supply of labor will decrease. 
C)  The supply of labor will increase. 
D)  The demand for labor will decrease. 
E)  The demand for labor will increase.

Question 17

The more people who remain in school for full-time education and training,the ________ is the ________ low-skilled labor.

Accepted Answer

A)  smaller; demand for 
B)  smaller; supply of 
C)  larger; supply of 
D)  larger; demand for 
E)  less elastic; demand for 
A)  smaller; demand for 
B)  smaller; supply of 
C)  larger; supply of 
D)  larger; demand for 
E)  less elastic; demand for

Question 18

The market for land

Accepted Answer

A)  has an elastic supply. 
B)  has a perfectly inelastic supply. 
C)  determines the equilibrium interest rate. 
D)  has an upward sloping supply curve. 
E)  has no equilibrium because both the demand curve and the supply curve are vertical. 
A)  has an elastic supply. 
B)  has a perfectly inelastic supply. 
C)  determines the equilibrium interest rate. 
D)  has an upward sloping supply curve. 
E)  has no equilibrium because both the demand curve and the supply curve are vertical.

Question 19

If the wage rate increases,a 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 only if the elasticity of demand for labor is elastic. 
D)  does not shift, but there is a movement along it. 
E)  shifts rightward only if the elasticity of demand for labor is inelastic. 
A)  does not shift, and there is no movement along it. 
B)  shifts leftward. 
C)  shifts rightward only if the elasticity of demand for labor is elastic. 
D)  does not shift, but there is a movement along it. 
E)  shifts rightward only if the elasticity of demand for labor is inelastic.

Question 20

A surplus of workers occurs

Accepted Answer

A)  when the wage rate exceeds the equilibrium wage rate. 
B)  when the wage rate is less than the equilibrium wage rate. 
C)  at the equilibrium wage rate. 
D)  whenever there is a shortage of goods. 
E)  whenever there is a surplus of goods. 
A)  when the wage rate exceeds the equilibrium wage rate. 
B)  when the wage rate is less than the equilibrium wage rate. 
C)  at the equilibrium wage rate. 
D)  whenever there is a shortage of goods. 
E)  whenever there is a surplus of goods.

Derived demand means that the demand for a factor of production is derived from the

The medical field requires doctors to pass exams in order to earn a license to practice medicine.This requirement doctors' salaries because .

"As the quantity of labor hired increases,the value of marginal product stays constant as long as the wage rate is constant for all workers." Is the previous statement correct or incorrect? Explain your answer.

The demand for labor curve slopes downward because

The figure above shows a labor market in which a union has form -Labor unions' support for import restrictions represents an attempt to shift the

The value of the marginal product of labor is calculated by multiplying the by the .

-The figure above shows the market supply of labor curve.Which of the following might be the reason the labor supply curve shifted from S₀ to S₁?

-Refer to the figures above to answer this question.Figure represents the market for because its supply is .

The supply of each particular block of land is

The demand for labor is derived from the

Unions support immigration restrictions because the restrictions create

If the price of movie tickets increases,there is

How does an increase in the adult population affect the labor market?

The more people who remain in school for full-time education and training,the is the low-skilled labor.

The market for land

If the wage rate increases,a firm's demand for labor curve

A surplus of workers occurs

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

Derived demand means that the demand for a factor of production is derived from the

The medical field requires doctors to pass exams in order to earn a license to practice medicine.This requirement ________ doctors' salaries because ________.

"As the quantity of labor hired increases,the value of marginal product stays constant as long as the wage rate is constant for all workers." Is the previous statement correct or incorrect? Explain your answer.

The demand for labor curve slopes downward because

The figure above shows a labor market in which a union has form -Labor unions' support for import restrictions represents an attempt to shift the

The value of the marginal product of labor is calculated by multiplying the ________ by the ________.

-The figure above shows the market supply of labor curve.Which of the following might be the reason the labor supply curve shifted from S₀ to S₁?

-Refer to the figures above to answer this question.Figure ________ represents the market for ________ because its supply is ________.

The supply of each particular block of land is

The demand for labor is derived from the

Unions support immigration restrictions because the restrictions create

If the price of movie tickets increases,there is

How does an increase in the adult population affect the labor market?

The more people who remain in school for full-time education and training,the ________ is the ________ low-skilled labor.

The market for land

If the wage rate increases,a firm's demand for labor curve

A surplus of workers occurs

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

The medical field requires doctors to pass exams in order to earn a license to practice medicine.This requirement doctors' salaries because .

The value of the marginal product of labor is calculated by multiplying the by the .

-Refer to the figures above to answer this question.Figure represents the market for because its supply is .

The more people who remain in school for full-time education and training,the is the low-skilled labor.