Question 1

A firm's demand for labor curve shifts when there is a change in
i.the supply of labor.
ii.population
iii.the equilibrium wage rate.

Accepted Answer

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

Question 2

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 3

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 4

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 5

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 6

What happens to the supply of labor when more people pursue education and training? Be sure to discuss what happens to both the supply of low-skilled and high-skilled labor.

Accepted Answer

The supply of low-skilled labor decrease

Question 7

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 8

Considered as a factor of production,coal is a

Accepted Answer

A)  form of physical capital. 
B)  type of embodied labor. 
C)  nonrenewable natural resource. 
D)  renewable natural resource. 
E)  form of financial capital. 
A)  form of physical capital. 
B)  type of embodied labor. 
C)  nonrenewable natural resource. 
D)  renewable natural resource. 
E)  form of financial capital.

Question 9

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 10

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 11

When the rental rate for capital falls,the ________ capital ________.

Accepted Answer

A)  demand for; increases 
B)  demand for; decreases 
C)  quantity demanded of; increases 
D)  quantity demanded of; decreases 
E)  supply of; increases 
A)  demand for; increases 
B)  demand for; decreases 
C)  quantity demanded of; increases 
D)  quantity demanded of; decreases 
E)  supply of; increases

Question 12

-The above figure shows the demand for labor curve for workers at a Pizza Hut in Canada.If the wage rate is $6 per hour,then the
i.quantity of workers Pizza Hut demands is 10 workers.
ii.Pizza Hut would have been willing to hire the 6th worker even if they had to pay $7 per hour rather than $6 per hour.
iii.value of the marginal product of the 10th worker is $6 per hour.

Accepted Answer

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

Question 13

Unions ________ free trade and ________ a higher minimum wage.

Accepted Answer

A)  favor; favor 
B)  are neutral toward; oppose 
C)  favor; oppose 
D)  oppose; favor 
E)  oppose; oppose 
A)  favor; favor 
B)  are neutral toward; oppose 
C)  favor; oppose 
D)  oppose; favor 
E)  oppose; oppose

Question 14

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 15

If UPS hires another worker,UPS will be able to deliver an additional 20 packages an hour.The price of each package is $5.The value of this worker's marginal product is equal to

Accepted Answer

A)  $5. 
B)  $100. 
C)  $4. 
D)  20 packages. 
E)  $20. 
A)  $5. 
B)  $100. 
C)  $4. 
D)  20 packages. 
E)  $20.

Question 16

A profit-maximizing firm hires labor up to the point where

Accepted Answer

A)  price of the product equals the value of marginal product. 
B)  price of the product equals the wage rate. 
C)  the wage rate multiplied by the quantity of labor equals the marginal product. 
D)  the wage rate equals the value of marginal product. 
E)  marginal revenue equals the wage rate. 
A)  price of the product equals the value of marginal product. 
B)  price of the product equals the wage rate. 
C)  the wage rate multiplied by the quantity of labor equals the marginal product. 
D)  the wage rate equals the value of marginal product. 
E)  marginal revenue equals the wage rate.

Question 17

"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 18

How does a firm's demand for labor change if the price of the firm's product increases? Relate your answer to the value of marginal product.

Accepted Answer

An increase in the price of the firm's p

Question 19

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 20

According to the Hotelling Principle,the price of an nonrenewable resource is expected to

Accepted Answer

A)  fall slowly over time. 
B)  fall at a rate equal to the interest rate. 
C)  fluctuate randomly. 
D)  rise at a rate equal to the interest rate. 
E)  remain constant over time. 
A)  fall slowly over time. 
B)  fall at a rate equal to the interest rate. 
C)  fluctuate randomly. 
D)  rise at a rate equal to the interest rate. 
E)  remain constant over time.

A firm's demand for labor curve shifts when there is a change in i.the supply of labor. ii.population iii.the equilibrium wage rate.

A change in the wage rate

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

When hiring labor,to maximize profit a firm hires labor

The demand for a resource is derived from the

What happens to the supply of labor when more people pursue education and training? Be sure to discuss what happens to both the supply of low-skilled and high-skilled labor.

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

Considered as a factor of production,coal is a

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

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

When the rental rate for capital falls,the capital .

Unions free trade and a higher minimum wage.

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

If UPS hires another worker,UPS will be able to deliver an additional 20 packages an hour.The price of each package is $5.The value of this worker's marginal product is equal to

A profit-maximizing firm hires labor up to the point where

"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.

How does a firm's demand for labor change if the price of the firm's product increases? Relate your answer to the value of marginal product.

The value of marginal product is equal to the

According to the Hotelling Principle,the price of an nonrenewable resource is expected to

Getting Started

The Usand 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

A firm's demand for labor curve shifts when there is a change in i.the supply of labor. ii.population iii.the equilibrium wage rate.

A change in the wage rate

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

When hiring labor,to maximize profit a firm hires labor

The demand for a resource is derived from the

What happens to the supply of labor when more people pursue education and training? Be sure to discuss what happens to both the supply of low-skilled and high-skilled labor.

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

Considered as a factor of production,coal is a

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

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

When the rental rate for capital falls,the ________ capital ________.

Unions ________ free trade and ________ a higher minimum wage.

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

If UPS hires another worker,UPS will be able to deliver an additional 20 packages an hour.The price of each package is $5.The value of this worker's marginal product is equal to

A profit-maximizing firm hires labor up to the point where

"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.

How does a firm's demand for labor change if the price of the firm's product increases? Relate your answer to the value of marginal product.

The value of marginal product is equal to the

According to the Hotelling Principle,the price of an nonrenewable resource is expected to

Getting Started

The Usand 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

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

When the rental rate for capital falls,the capital .

Unions free trade and a higher minimum wage.