Question 1

If an industry introduces labor-saving technology in production,the demand curve for labor in that industry is likely to ________.

Accepted Answer

A)  shift to the left 
B)  shift to the right 
C)  become vertical 
D)  become horizontal 
A)  shift to the left 
B)  shift to the right 
C)  become vertical 
D)  become horizontal

Question 2

Which of the following is true of the market for labor?

Accepted Answer

A)  Workers are the suppliers of labor. 
B)  Workers are the demanders of labor. 
C)  The labor supply curve is perfectly elastic. 
D)  The labor demand curve is perfectly elastic. 
A)  Workers are the suppliers of labor. 
B)  Workers are the demanders of labor. 
C)  The labor supply curve is perfectly elastic. 
D)  The labor demand curve is perfectly elastic.

Question 3

Scenario: Consider a firm that produces and sells a good for the price of $2 in a perfectly competitive market. The following table shows the relationship between the number of workers and the output of this firm. Suppose the labor market from which this firm hires its employees is competitive.
  
-Refer to the scenario above.If the wage rate in this market is equal to $9,this firm will hire ________ workers.

Accepted Answer

A)  2 
B)  3 
C)  4 
D)  5 
A)  2 
B)  3 
C)  4 
D)  5

Question 4

Scenario: A small apple orchard operates in a perfectly competitive output market (the market for apples) and input or factor market (the market for apple pickers). The market price of apples is $1 per pound, and the market wage for apple pickers is $50 per day. See the following table.
  
-Refer to the scenario above.What is the value of the marginal product of labor for hiring the tenth worker?

Accepted Answer

A)  $910 
B)  $91 
C)  $50 
D)  $0 
A)  $910 
B)  $91 
C)  $50 
D)  $0

Question 5

Consider a printing press that operates in a perfectly competitive market.Also,assume that the market for printing press workers is competitive.The following table shows the employment levels and the daily output of notebooks manufactured by the printing press.
   
a)Calculate the marginal product of the employees.If the price at which a notebook is sold is $2,calculate the value of the marginal product of the employees.
b)If the market wage rate is $80,how many employees should the firm hire?
c)If the market wage rate is $46,how many employees should the firm hire?

Accepted Answer

a)The marginal product and the value of

Question 6

Which of the following is NOT a factor that can cause wage inequality among workers producing the same good?

Accepted Answer

A)  Differences in compensating wages 
B)  Differences in productivity and human capital 
C)  The nature and extent of discrimination in the job market 
D)  The market price of the final good being produced by the workers 
A)  Differences in compensating wages 
B)  Differences in productivity and human capital 
C)  The nature and extent of discrimination in the job market 
D)  The market price of the final good being produced by the workers

Question 7

Other things remaining the same,which of the following is likely to happen if all homemakers in an economy start working as paid labor?

Accepted Answer

A)  There will be a fall in both the wage rate and the employment level. 
B)  There will be an increase in both the wage rate and the employment level. 
C)  There will be an increase in the wage rate in the country and a fall in the employment level. 
D)  There will be a fall in the wage rate in the country and an increase in the employment level. 
A)  There will be a fall in both the wage rate and the employment level. 
B)  There will be an increase in both the wage rate and the employment level. 
C)  There will be an increase in the wage rate in the country and a fall in the employment level. 
D)  There will be a fall in the wage rate in the country and an increase in the employment level.

Question 8

Scenario: Consider a firm that produces and sells a good for the price of $2 in a perfectly competitive market. The following table shows the relationship between the number of workers and the output of this firm. Suppose the labor market from which this firm hires its employees is competitive.
  
-Refer to the scenario above.What is the marginal product of labor when the third worker is hired?

Accepted Answer

A)  36 
B)  72 
C)  18 
D)  9 
A)  36 
B)  72 
C)  18 
D)  9

Question 9

If the rental price of physical capital falls,the firm's ________.

Accepted Answer

A)  demand for physical capital will fall 
B)  quantity demanded of physical capital will fall 
C)  quantity demanded of physical capital will increase 
D)  demand for physical capital will increase 
A)  demand for physical capital will fall 
B)  quantity demanded of physical capital will fall 
C)  quantity demanded of physical capital will increase 
D)  demand for physical capital will increase

Question 10

If the value of the marginal product of a worker is $40 and the marginal product of the worker is 8 units,the market price of the good he produces is ________.

Accepted Answer

A)  $2 
B)  $5 
C)  $8 
D)  $10 
A)  $2 
B)  $5 
C)  $8 
D)  $10

Question 11

Suppose that employers engage in statistical discrimination based on the information that,on average,women cost more to employ than men for various reasons.As a result,employers pay women less,on average,than they pay men.Assuming that the information is correct,what would be an effect of the law that requires employers to pay the same wage as men for the same job?

Accepted Answer

A)  More women will be employed. 
B)  Fewer women will be employed. 
C)  No change in women's employment, but more men will be employed. 
D)  No change in men's employment, but more women will be employed. 
A)  More women will be employed. 
B)  Fewer women will be employed. 
C)  No change in women's employment, but more men will be employed. 
D)  No change in men's employment, but more women will be employed.

Question 12

Which of the following is likely to cause a fall in the wage rate and an increase in the number of workers hired in a local cotton mill?

Accepted Answer

A)  A reduction in wages paid in a nearby jute mill 
B)  The introduction of labor-saving technology in the mill 
C)  The introduction of labor-complementary technology in the mill 
D)  A decrease in the population of the region in which the cotton mill is located 
A)  A reduction in wages paid in a nearby jute mill 
B)  The introduction of labor-saving technology in the mill 
C)  The introduction of labor-complementary technology in the mill 
D)  A decrease in the population of the region in which the cotton mill is located

Question 13

Which of the following is likely to lead to a leftward shift in the demand curve for labor in the printing ink manufacturing industry?

Accepted Answer

A)  A decrease in the price of printers 
B)  An increase in the demand for printers 
C)  An increase in the price of printing ink 
D)  A decrease in the demand for printing paper 
A)  A decrease in the price of printers 
B)  An increase in the demand for printers 
C)  An increase in the price of printing ink 
D)  A decrease in the demand for printing paper

Question 14

Scenario: Mark grows herbs in his backyard. The following table shows his output as a function of the square feet of land used.
  
-Refer to the scenario above.Suppose Mark can sell his herbs at the price of $2.50 per pound,and that the rental price of land is $80 per square foot.How big of an herb garden should Mark maintain?

Accepted Answer

A)  A 2 square foot garden 
B)  A 3 square foot garden 
C)  A 4 square foot garden 
D)  A 5 square foot garden 
A)  A 2 square foot garden 
B)  A 3 square foot garden 
C)  A 4 square foot garden 
D)  A 5 square foot garden

Question 15

Scenario: Consider a firm that produces and sells a good for the price of $2 in a perfectly competitive market. The following table shows the relationship between the number of workers and the output of this firm. Suppose the labor market from which this firm hires its employees is competitive.
  
-Refer to the scenario above.What is the value of the marginal product of labor when the first worker is hired?

Accepted Answer

A)  $15 
B)  $30 
C)  $18 
D)  $9 
A)  $15 
B)  $30 
C)  $18 
D)  $9

Question 16

Scenario: Victoria Corp. makes running shoes by employing a robotics technology that requires at most a few, but highly skilled, workers for monitoring and maintenance of the robots. Each robot costs $240,000. The table below shows the marginal product of capital (MPK) per month when the firm employs one worker versus when it employs two workers. Each pair of Victoria shoes sells for $150.
  
-Refer to the scenario above.If the firm decides to employ one worker,how many robots should it use?

Accepted Answer

A)  None 
B)  1 
C)  2 
D)  3 
A)  None 
B)  1 
C)  2 
D)  3

Question 17

Refer to the scenario above.Lydia contends that the increase in female labor force participation was caused by a change in tastes for working among women in the United States after World War II.According to Lydia,________.Explain your answer.

Accepted Answer

A)  quantity supplied of labor increased 
B)  labor supply increased 
C)  quantity demanded of labor increased 
D)  labor demand increased 
A)  quantity supplied of labor increased 
B)  labor supply increased 
C)  quantity demanded of labor increased 
D)  labor demand increased

Question 18

The price of non-work activities is ________.

Accepted Answer

A)  zero 
B)  equal to the opportunity cost of those activities 
C)  less than the opportunity cost of those activities 
D)  greater than the opportunity cost of those activities 
A)  zero 
B)  equal to the opportunity cost of those activities 
C)  less than the opportunity cost of those activities 
D)  greater than the opportunity cost of those activities

Question 19

All the following are causes of wage inequality except ________.

Accepted Answer

A)  discrimination in the job market 
B)  differences in the competitiveness of industries 
C)  differences in compensating wages 
D)  differences in human capital 
A)  discrimination in the job market 
B)  differences in the competitiveness of industries 
C)  differences in compensating wages 
D)  differences in human capital

Question 20

Which of the following statements is true?

Accepted Answer

A)  The relationship between labor demand and wage rate and the relationship between labor supply and wage rate are both positive. 
B)  The relationship between labor demand and wage rate and the relationship between labor supply and wage rate are both negative. 
C)  The relationship between labor demand and wage rate is positive, whereas the relationship between labor supply and wage rate is negative. 
D)  The relationship between labor demand and wage rate is negative, whereas the relationship between labor supply and wage rate is positive. 
A)  The relationship between labor demand and wage rate and the relationship between labor supply and wage rate are both positive. 
B)  The relationship between labor demand and wage rate and the relationship between labor supply and wage rate are both negative. 
C)  The relationship between labor demand and wage rate is positive, whereas the relationship between labor supply and wage rate is negative. 
D)  The relationship between labor demand and wage rate is negative, whereas the relationship between labor supply and wage rate is positive.

If an industry introduces labor-saving technology in production,the demand curve for labor in that industry is likely to ________.

Which of the following is true of the market for labor?

Which of the following is NOT a factor that can cause wage inequality among workers producing the same good?

Other things remaining the same,which of the following is likely to happen if all homemakers in an economy start working as paid labor?

If the rental price of physical capital falls,the firm's ________.

If the value of the marginal product of a worker is $40 and the marginal product of the worker is 8 units,the market price of the good he produces is ________.

Which of the following is likely to cause a fall in the wage rate and an increase in the number of workers hired in a local cotton mill?

Which of the following is likely to lead to a leftward shift in the demand curve for labor in the printing ink manufacturing industry?

Refer to the scenario above.Lydia contends that the increase in female labor force participation was caused by a change in tastes for working among women in the United States after World War II.According to Lydia,________.Explain your answer.

The price of non-work activities is ________.

All the following are causes of wage inequality except ________.

Which of the following statements is true?

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, supply, and Equilibrium

Consumers and Incentives

Sellers and Incentives

Perfect Competition and the Invisible Hand

Trade

Externalities and Public Goods

The Government in the Economy: Taxation and Regulation

Monopoly

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk

The Economics of Information

Auctions and Bargaining

Social Economics

Filters

Exam 11: Markets for Factors of Production

If an industry introduces labor-saving technology in production,the demand curve for labor in that industry is likely to ________.

Which of the following is true of the market for labor?

Which of the following is NOT a factor that can cause wage inequality among workers producing the same good?

Other things remaining the same,which of the following is likely to happen if all homemakers in an economy start working as paid labor?

If the rental price of physical capital falls,the firm's ________.

If the value of the marginal product of a worker is $40 and the marginal product of the worker is 8 units,the market price of the good he produces is ________.

Which of the following is likely to cause a fall in the wage rate and an increase in the number of workers hired in a local cotton mill?

Which of the following is likely to lead to a leftward shift in the demand curve for labor in the printing ink manufacturing industry?

Refer to the scenario above.Lydia contends that the increase in female labor force participation was caused by a change in tastes for working among women in the United States after World War II.According to Lydia,________.Explain your answer.

The price of non-work activities is ________.

All the following are causes of wage inequality except ________.

Which of the following statements is true?

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, supply, and Equilibrium

Consumers and Incentives

Sellers and Incentives

Perfect Competition and the Invisible Hand

Trade

Externalities and Public Goods

The Government in the Economy: Taxation and Regulation

Monopoly

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk

The Economics of Information

Auctions and Bargaining

Social Economics

Filters