Question 1

The value of marginal product of labor curve

Accepted Answer

A)  is upward sloping because firms want to hire more workers to increase production. 
B)  shows the price of a factor of production multiplied by the amount of the factor employed. 
C)  is the same as a firm's supply of labor curve. 
D)  is downward sloping if each additional worker's marginal product is decreasing. 
E)  is U-shaped. 
A)  is upward sloping because firms want to hire more workers to increase production. 
B)  shows the price of a factor of production multiplied by the amount of the factor employed. 
C)  is the same as a firm's supply of labor curve. 
D)  is downward sloping if each additional worker's marginal product is decreasing. 
E)  is U-shaped.

Question 2

The rule for employing a profit-maximizing amount of labor is to continue to hire additional workers until the additional worker's value of marginal product is

Accepted Answer

A)  less than the wage rate. 
B)  equal to the wage rate. 
C)  greater than 1. 
D)  less than the price of the product. 
E)  equal to the price of the product. 
A)  less than the wage rate. 
B)  equal to the wage rate. 
C)  greater than 1. 
D)  less than the price of the product. 
E)  equal to the price of the product.

Question 3

In order to spend more time with her children,a young mother decides to work fewer hours as her pay increases.What does her labor supply curve look like?

Accepted Answer

The young mother's labor supply curve is

Question 4

Over time,the actual (not expected)price of a nonrenewable natural resource

Accepted Answer

A)  falls. 
B)  rises. 
C)  stays the same. 
D)  could rise, fall, or stay the same. 
E)  first rises and then falls. 
A)  falls. 
B)  rises. 
C)  stays the same. 
D)  could rise, fall, or stay the same. 
E)  first rises and then falls.

Question 5

Robotic technology is a substitute for labor in many manufacturing processes.If the price of robotic technology decreases and the scale of the firm's production does not change,there is

Accepted Answer

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

Question 6

A change in the wage rate

Accepted Answer

A)  shifts the supply of labor curve so that the supply becomes more elastic. 
B)  shifts the supply of labor curve leftward. 
C)  shifts the supply of labor curve rightward. 
D)  does not shift the supply of labor curve but instead leads to a movement along it. 
E)  either shifts the supply of labor curve leftward or rightward depending whether the demand for labor curve shifts rightward or leftward. 
A)  shifts the supply of labor curve so that the supply becomes more elastic. 
B)  shifts the supply of labor curve leftward. 
C)  shifts the supply of labor curve rightward. 
D)  does not shift the supply of labor curve but instead leads to a movement along it. 
E)  either shifts the supply of labor curve leftward or rightward depending whether the demand for labor curve shifts rightward or leftward.

Question 7

The demand for a resource is derived from the

Accepted Answer

A)  price of the resource. 
B)  supply of the resource. 
C)  supply of substitute resources. 
D)  demand for the good or service that the resource is used to produce. 
E)  supply of complement resources. 
A)  price of the resource. 
B)  supply of the resource. 
C)  supply of substitute resources. 
D)  demand for the good or service that the resource is used to produce. 
E)  supply of complement resources.

Question 8

Of the following,a union is LEAST likely to support

Accepted Answer

A)  an increase in the minimum wage rate. 
B)  laws that restrict immigration into the country. 
C)  on-the-job training that makes their members more productive. 
D)  laws that increase the quantity of the nation's imports. 
E)  programs that boost the demand for the goods and services their members produce. 
A)  an increase in the minimum wage rate. 
B)  laws that restrict immigration into the country. 
C)  on-the-job training that makes their members more productive. 
D)  laws that increase the quantity of the nation's imports. 
E)  programs that boost the demand for the goods and services their members produce.

Question 9

When hiring labor,to maximize profit a firm hires labor

Accepted Answer

A)  until the value of marginal product equals the wage rate. 
B)  if the workers are not unionized. 
C)  until the value of marginal product is less than the wage rate. 
D)  until the value of marginal product is greater than the wage rate. 
E)  until the value of marginal product equals the marginal revenue from hiring the worker. 
A)  until the value of marginal product equals the wage rate. 
B)  if the workers are not unionized. 
C)  until the value of marginal product is less than the wage rate. 
D)  until the value of marginal product is greater than the wage rate. 
E)  until the value of marginal product equals the marginal revenue from hiring the worker.

Question 10

If a nonrenewable natural resource's price is expected to increase at a rate faster than the interest rate,then the

Accepted Answer

A)  owners will sell all that they can today. 
B)  owners will sell nothing today. 
C)  consumers will demand nothing today. 
D)  owners will sell their entire supply. 
E)  current price will probably fall. 
A)  owners will sell all that they can today. 
B)  owners will sell nothing today. 
C)  consumers will demand nothing today. 
D)  owners will sell their entire supply. 
E)  current price will probably fall.

Question 11

-Refer to the figures above to answer this question.Figure B represents the market for ________ because ________,all else held the same.

Accepted Answer

A)  land; landowners respond to higher rental rates by making more land available 
B)  a nonrenewable resource; as the interest rate increases, less of the resource is supplied 
C)  capital; the Hotelling Principle predicts that prices will vary inversely with the interest rate 
D)  land; the Hotelling Principle states rental rates will increase predictably over time 
E)  capital; as the rental rate increases, the quantity of capital supplied increases and the quantity of capital supplied decreases 
A)  land; landowners respond to higher rental rates by making more land available 
B)  a nonrenewable resource; as the interest rate increases, less of the resource is supplied 
C)  capital; the Hotelling Principle predicts that prices will vary inversely with the interest rate 
D)  land; the Hotelling Principle states rental rates will increase predictably over time 
E)  capital; as the rental rate increases, the quantity of capital supplied increases and the quantity of capital supplied decreases

Question 12

The supply of labor curve shifts leftward if

Accepted Answer

A)  the population increases. 
B)  the demand for labor curve shifts leftward. 
C)  the supply of labor increases. 
D)  the wage rate falls. 
E)  the supply of labor decreases. 
A)  the population increases. 
B)  the demand for labor curve shifts leftward. 
C)  the supply of labor increases. 
D)  the wage rate falls. 
E)  the supply of labor decreases.

Question 13

For a firm selling its product in a perfectly competitive market,the demand curve for a factor of production is downward sloping because

Accepted Answer

A)  of the diminishing marginal product of the factor. 
B)  to sell more output, the firm must lower the price of its product. 
C)  firms must hire more factors of production if they want to increase their output. 
D)  a factor's marginal product increases when the price of the factor increases. 
E)  None of the above answers is correct. 
A)  of the diminishing marginal product of the factor. 
B)  to sell more output, the firm must lower the price of its product. 
C)  firms must hire more factors of production if they want to increase their output. 
D)  a factor's marginal product increases when the price of the factor increases. 
E)  None of the above answers is correct.

Question 14

What is the effect on the supply of low-skilled labor of an increase in the number of people pursuing higher education?

Accepted Answer

A)  It becomes more inelastic. 
B)  The supply of low-skilled labor decreases. 
C)  The supply of low-skilled labor increases. 
D)  It becomes more elastic. 
E)  None of the above answers is correct. 
A)  It becomes more inelastic. 
B)  The supply of low-skilled labor decreases. 
C)  The supply of low-skilled labor increases. 
D)  It becomes more elastic. 
E)  None of the above answers is correct.

Question 15

A technological change that raises the value of marginal product of capital ________ the rental rate for capital because the ________.

Accepted Answer

A)  raises; supply curve of capital shifts leftward 
B)  lowers; supply curve of capital shifts rightward 
C)  raises; demand curve for capital shifts leftward 
D)  raises; demand curve for capital shifts rightward 
E)  lowers; demand curve for capital shifts leftward 
A)  raises; supply curve of capital shifts leftward 
B)  lowers; supply curve of capital shifts rightward 
C)  raises; demand curve for capital shifts leftward 
D)  raises; demand curve for capital shifts rightward 
E)  lowers; demand curve for capital shifts leftward

Question 16

A rise in the minimum wage increases the demand for union labor because this policy change

Accepted Answer

A)  lowers the wage rate paid to union labor. 
B)  raises the productivity of union labor. 
C)  lowers the cost of a substitute for union labor. 
D)  lowers the productivity of union labor. 
E)  raises the cost of a substitute for union labor. 
A)  lowers the wage rate paid to union labor. 
B)  raises the productivity of union labor. 
C)  lowers the cost of a substitute for union labor. 
D)  lowers the productivity of union labor. 
E)  raises the cost of a substitute for union labor.

Question 17

Which of the following curves is most inelastic?

Accepted Answer

A)  the supply of land 
B)  the supply of labor for an individual worker 
C)  the supply of labor for all workers 
D)  the demand for capital 
E)  the demand for labor 
A)  the supply of land 
B)  the supply of labor for an individual worker 
C)  the supply of labor for all workers 
D)  the demand for capital 
E)  the demand for labor

Question 18

Sky High Camping offers overnight camping in tree houses built on its 10-acre property.Workers are hired to build and maintain the tree houses.Which of the following are true statements?
i.The land and the trees grown are considered natural resources.
ii.The demand for trees and land is not a derived demand because supply is limited.
iii.The demand for workers is considered a derived demand because they help produce the service of tree house camping.

Accepted Answer

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

Question 19

If the demand for labor decreases,then the equilibrium wage rate ________ and the equilibrium quantity of labor ________.

Accepted Answer

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

Question 20

Which of the following represents a derived demand? Demand for

Accepted Answer

A)  a taco by Sam when she is hungry. 
B)  golf balls by Jose, who is planning on going golfing with his boss. 
C)  a grocery clerk by the local Safeway. 
D)  an automobile by Jack, who wants a car to get to school. 
E)  new clothing by Shaniq, who is starting a new job. 
A)  a taco by Sam when she is hungry. 
B)  golf balls by Jose, who is planning on going golfing with his boss. 
C)  a grocery clerk by the local Safeway. 
D)  an automobile by Jack, who wants a car to get to school. 
E)  new clothing by Shaniq, who is starting a new job.

The value of marginal product of labor curve

The rule for employing a profit-maximizing amount of labor is to continue to hire additional workers until the additional worker's value of marginal product is

In order to spend more time with her children,a young mother decides to work fewer hours as her pay increases.What does her labor supply curve look like?

Over time,the actual (not expected)price of a nonrenewable natural resource

Robotic technology is a substitute for labor in many manufacturing processes.If the price of robotic technology decreases and the scale of the firm's production does not change,there is

A change in the wage rate

The demand for a resource is derived from the

Of the following,a union is LEAST likely to support

When hiring labor,to maximize profit a firm hires labor

If a nonrenewable natural resource's price is expected to increase at a rate faster than the interest rate,then the

-Refer to the figures above to answer this question.Figure B represents the market for because ,all else held the same.

The supply of labor curve shifts leftward if

For a firm selling its product in a perfectly competitive market,the demand curve for a factor of production is downward sloping because

What is the effect on the supply of low-skilled labor of an increase in the number of people pursuing higher education?

A technological change that raises the value of marginal product of capital the rental rate for capital because the .

A rise in the minimum wage increases the demand for union labor because this policy change

Which of the following curves is most inelastic?

If the demand for labor decreases,then the equilibrium wage rate and the equilibrium quantity of labor .

Which of the following represents a derived demand? Demand for

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 value of marginal product of labor curve

The rule for employing a profit-maximizing amount of labor is to continue to hire additional workers until the additional worker's value of marginal product is

In order to spend more time with her children,a young mother decides to work fewer hours as her pay increases.What does her labor supply curve look like?

Over time,the actual (not expected)price of a nonrenewable natural resource

Robotic technology is a substitute for labor in many manufacturing processes.If the price of robotic technology decreases and the scale of the firm's production does not change,there is

A change in the wage rate

The demand for a resource is derived from the

Of the following,a union is LEAST likely to support

When hiring labor,to maximize profit a firm hires labor

If a nonrenewable natural resource's price is expected to increase at a rate faster than the interest rate,then the

-Refer to the figures above to answer this question.Figure B represents the market for ________ because ________,all else held the same.

The supply of labor curve shifts leftward if

For a firm selling its product in a perfectly competitive market,the demand curve for a factor of production is downward sloping because

What is the effect on the supply of low-skilled labor of an increase in the number of people pursuing higher education?

A technological change that raises the value of marginal product of capital ________ the rental rate for capital because the ________.

A rise in the minimum wage increases the demand for union labor because this policy change

Which of the following curves is most inelastic?

If the demand for labor decreases,then the equilibrium wage rate ________ and the equilibrium quantity of labor ________.

Which of the following represents a derived demand? Demand for

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

-Refer to the figures above to answer this question.Figure B represents the market for because ,all else held the same.

A technological change that raises the value of marginal product of capital the rental rate for capital because the .

If the demand for labor decreases,then the equilibrium wage rate and the equilibrium quantity of labor .