Question 1

Which of the following would prevent a labor market from being classified as perfectly competitive?

Accepted Answer

A) It is difficult for new workers to enter the market. 
B) All workers have the same abilities. 
C) Exiting the market is easy for workers who are currently in the market. 
D) Both buyers and sellers of labor are well-informed about market conditions. 
E) Each firm hires only a tiny fraction of the total labor in the market. 
A) It is difficult for new workers to enter the market. 
B) All workers have the same abilities. 
C) Exiting the market is easy for workers who are currently in the market. 
D) Both buyers and sellers of labor are well-informed about market conditions. 
E) Each firm hires only a tiny fraction of the total labor in the market.

Question 2

Both marginal revenue and marginal revenue product refer to the gains to the firm from employing one additional worker.

Accepted Answer

A) True 
 B)False

Question 3

The marginal revenue product of labor

Accepted Answer

A) increases as more labor is hired 
B) is independent of the quantities of other inputs used by the firm 
C) is measured while varying the amounts of all inputs used by the firm 
D) is independent of the price of the firm's output 
E) depends on the quantities of other inputs used by the firm 
A) increases as more labor is hired 
B) is independent of the quantities of other inputs used by the firm 
C) is measured while varying the amounts of all inputs used by the firm 
D) is independent of the price of the firm's output 
E) depends on the quantities of other inputs used by the firm

Question 4

Which of the following could explain an increase in labor supply to a particular labor market?

Accepted Answer

A) a reduced preference for this type of work 
B) a decrease in the size of the population 
C) an increase in the number of firms in the market 
D) a rightward shift of the marginal revenue product curve for labor at a typical firm 
E) a reduction in wage rates for similar types of work 
A) a reduced preference for this type of work 
B) a decrease in the size of the population 
C) an increase in the number of firms in the market 
D) a rightward shift of the marginal revenue product curve for labor at a typical firm 
E) a reduction in wage rates for similar types of work

Question 5

Gerhardt is a bicycle mechanic,and he can repair 6 bikes a day at a market price of $25.00.If he can't find any bike shop to hire him,

Accepted Answer

A) the wage rate must be more than $150 per day. 
B) the wage rate must be less than $25 per day. 
C) then Gerhardt's marginal revenue product must be negative. 
D) the wage rate must be less than $150 per day. 
E) then Gerhardt's marginal product must be negative. 
A) the wage rate must be more than $150 per day. 
B) the wage rate must be less than $25 per day. 
C) then Gerhardt's marginal revenue product must be negative. 
D) the wage rate must be less than $150 per day. 
E) then Gerhardt's marginal product must be negative.

Question 6

A perfectly competitive firm should hire additional units of labor in a competitive labor market if

Accepted Answer

A) marginal revenue is less than marginal cost 
B) the marginal revenue product exceeds the wage rate 
C) total revenue exceeds total cost 
D) the marginal product of labor exceeds the wage rate 
E) the marginal product of labor is less than the wage rate 
A) marginal revenue is less than marginal cost 
B) the marginal revenue product exceeds the wage rate 
C) total revenue exceeds total cost 
D) the marginal product of labor exceeds the wage rate 
E) the marginal product of labor is less than the wage rate

Question 7

If eight workers can manufacture 70 tables per day and nine workers can manufacture 90 tables per day,

Accepted Answer

A) the marginal product of hiring the ninth worker is 20 tables 
B) the marginal product of hiring the ninth worker is 10 tables 
C) the marginal revenue associated with the ninth worker is $90 if nine tables sell for $10 each 
D) there are diminishing marginal returns to labor,starting with the ninth worker 
E) average revenue is rising 
A) the marginal product of hiring the ninth worker is 20 tables 
B) the marginal product of hiring the ninth worker is 10 tables 
C) the marginal revenue associated with the ninth worker is $90 if nine tables sell for $10 each 
D) there are diminishing marginal returns to labor,starting with the ninth worker 
E) average revenue is rising

Question 8

As applied to labor demand,the marginal approach to profit

Accepted Answer

A) is irrelevant 
B) requires setting marginal cost equal to the wage rate 
C) requires setting marginal revenue equal to the wage rate 
D) says that a firm should increase employment if doing so adds more to revenue than it adds to cost 
E) says that a firm should decrease employment if doing so adds more to cost than it adds to revenue 
A) is irrelevant 
B) requires setting marginal cost equal to the wage rate 
C) requires setting marginal revenue equal to the wage rate 
D) says that a firm should increase employment if doing so adds more to revenue than it adds to cost 
E) says that a firm should decrease employment if doing so adds more to cost than it adds to revenue

Question 9

If the federal government initiated a program through which individuals could receive a tax break for acquiring additional training in selected fields,the

Accepted Answer

A) supply curve for labor in those fields would shift to the left 
B) demand curve for labor in those fields would shift to the left 
C) demand for the product produced in those fields would shift to the left 
D) quantity of labor supplied would rise in response to wages 
E) supply curve for labor in those fields would shift to the right 
A) supply curve for labor in those fields would shift to the left 
B) demand curve for labor in those fields would shift to the left 
C) demand for the product produced in those fields would shift to the left 
D) quantity of labor supplied would rise in response to wages 
E) supply curve for labor in those fields would shift to the right

Question 10

A market in which resources are traded is known as a(n)

Accepted Answer

A) factor market 
B) perfectly competitive market 
C) open market 
D) closed market 
E) equilibrium market 
A) factor market 
B) perfectly competitive market 
C) open market 
D) closed market 
E) equilibrium market

Question 11

-Figure 12-3 illustrates the marginal revenue product of labor and three possible labor supply curves facing a firm that hires industrial design engineers.The firm initially is in equilibrium at point e.Then,the government initiates a subsidy for the cost of training for new industrial design engineers,lowering the cost of training.Assume that the full impact of the change in training costs is indicated by one of the curves in the figure.After all long-run adjustments are made,this firm pays a wage

Accepted Answer

A) of $18 per hour and employs 29 industrial design engineers 
B) of $26 per hour and employs 20 industrial design engineers 
C) between $22 and $26 per hour,while employing less than 20 industrial design engineers 
D) between $18 and $22 per hour,while employing more than 29 industrial design engineers 
E) between $18 and $22 per hour,while employing between 25 and 29 industrial design engineers 
A) of $18 per hour and employs 29 industrial design engineers 
B) of $26 per hour and employs 20 industrial design engineers 
C) between $22 and $26 per hour,while employing less than 20 industrial design engineers 
D) between $18 and $22 per hour,while employing more than 29 industrial design engineers 
E) between $18 and $22 per hour,while employing between 25 and 29 industrial design engineers

Question 12

The additional output produced when one additional worker is hired is referred to as the __________ of labor.

Accepted Answer

A) marginal revenue product 
B) marginal revenue 
C) supply 
D) marginal product 
E) total revenue product 
A) marginal revenue product 
B) marginal revenue 
C) supply 
D) marginal product 
E) total revenue product

Question 13

The labor market for ultrasound technicians in Cleveland is initially in equilibrium.Which of the following would lead to a lower wage rate and higher employment in that market?

Accepted Answer

A) a drop in demand for diagnostic services at Cleveland hospitals 
B) a drop in the price of ultrasound equipment 
C) an increase in the length of training required for ultrasound technicians 
D) a shift in potential workers' tastes away from hospital and clinical work 
E) a wage decrease for ultrasound technicians in nearby cities 
A) a drop in demand for diagnostic services at Cleveland hospitals 
B) a drop in the price of ultrasound equipment 
C) an increase in the length of training required for ultrasound technicians 
D) a shift in potential workers' tastes away from hospital and clinical work 
E) a wage decrease for ultrasound technicians in nearby cities

Question 14

Sally's Salon sells haircuts in a perfectly competitive market.As the salon hires additional workers,the marginal revenue product of labor

Accepted Answer

A) rises whenever the marginal product of labor falls 
B) is equal to the market price of haircuts 
C) falls whenever the marginal product of labor falls 
D) varies only if the market price of haircuts varies 
E) remains constant 
A) rises whenever the marginal product of labor falls 
B) is equal to the market price of haircuts 
C) falls whenever the marginal product of labor falls 
D) varies only if the market price of haircuts varies 
E) remains constant

Question 15

Tova is trying to get a bakery to hire her.She said that if she helped out,the shop could sell an additional 5 cakes per day.If each cake sells for $10 and the owner hires her,then

Accepted Answer

A) the wage rate must be at least $51 per day. 
B) Tova's marginal revenue product must be less than the wage rate. 
C) Tova's marginal revenue product must be positive. 
D) the wage rate must be at most $50 per day. 
E) the wage rate must be equal to $40 per day. 
A) the wage rate must be at least $51 per day. 
B) Tova's marginal revenue product must be less than the wage rate. 
C) Tova's marginal revenue product must be positive. 
D) the wage rate must be at most $50 per day. 
E) the wage rate must be equal to $40 per day.

Question 16

A firm can maximize profit by hiring labor up to the point where

Accepted Answer

A) the marginal revenue product equals the wage rate 
B) the marginal product equals marginal cost 
C) total revenue equals total cost 
D) the marginal revenue product equals marginal product 
E) the marginal revenue product is zero 
A) the marginal revenue product equals the wage rate 
B) the marginal product equals marginal cost 
C) total revenue equals total cost 
D) the marginal revenue product equals marginal product 
E) the marginal revenue product is zero

Question 17

The labor supply curve is typically upward sloping because as the wage rate rises,

Accepted Answer

A) it will exceed the reservation wages of more individuals 
B) the opportunity cost of leisure falls 
C) the demand for the good produced by labor increases 
D) the marginal revenue product of labor falls 
E) the marginal revenue product of labor rises 
A) it will exceed the reservation wages of more individuals 
B) the opportunity cost of leisure falls 
C) the demand for the good produced by labor increases 
D) the marginal revenue product of labor falls 
E) the marginal revenue product of labor rises

Question 18

-Which of the following could explain a movement from point F to point H in Figure 12-2?

Accepted Answer

A) decreased labor force participation rates 
B) an increase in the market wage in an alternative labor market 
C) a decrease in the price of a input substitutable for labor 
D) a decrease in the number of years of training needed to work in this market 
E) a decrease in the population in the geographic area of this market 
A) decreased labor force participation rates 
B) an increase in the market wage in an alternative labor market 
C) a decrease in the price of a input substitutable for labor 
D) a decrease in the number of years of training needed to work in this market 
E) a decrease in the population in the geographic area of this market

Question 19

Three accountants can prepare 5 tax returns a day and four accountants can prepare 7 tax returns a day.If the marginal revenue product of hiring the fourth accountant is $300,then in a perfectly competitive product market the price of each tax return is

Accepted Answer

A) $250 
B) $100 
C) $300 
D) $200 
E) $150 
A) $250 
B) $100 
C) $300 
D) $200 
E) $150

Question 20

The term marginal revenue product (MRP)refers to the change in output if an additional worker is employed.

Accepted Answer

A) True 
 B)False

Which of the following would prevent a labor market from being classified as perfectly competitive?

Both marginal revenue and marginal revenue product refer to the gains to the firm from employing one additional worker.

The marginal revenue product of labor

Which of the following could explain an increase in labor supply to a particular labor market?

Gerhardt is a bicycle mechanic,and he can repair 6 bikes a day at a market price of $25.00.If he can't find any bike shop to hire him,

A perfectly competitive firm should hire additional units of labor in a competitive labor market if

If eight workers can manufacture 70 tables per day and nine workers can manufacture 90 tables per day,

As applied to labor demand,the marginal approach to profit

If the federal government initiated a program through which individuals could receive a tax break for acquiring additional training in selected fields,the

A market in which resources are traded is known as a(n)

The additional output produced when one additional worker is hired is referred to as the __________ of labor.

The labor market for ultrasound technicians in Cleveland is initially in equilibrium.Which of the following would lead to a lower wage rate and higher employment in that market?

Sally's Salon sells haircuts in a perfectly competitive market.As the salon hires additional workers,the marginal revenue product of labor

Tova is trying to get a bakery to hire her.She said that if she helped out,the shop could sell an additional 5 cakes per day.If each cake sells for $10 and the owner hires her,then

A firm can maximize profit by hiring labor up to the point where

The labor supply curve is typically upward sloping because as the wage rate rises,

-Which of the following could explain a movement from point F to point H in Figure 12-2?

Three accountants can prepare 5 tax returns a day and four accountants can prepare 7 tax returns a day.If the marginal revenue product of hiring the fourth accountant is $300,then in a perfectly competitive product market the price of each tax return is

The term marginal revenue product (MRP)refers to the change in output if an additional worker is employed.

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 12: Labor Markets

Which of the following would prevent a labor market from being classified as perfectly competitive?

Both marginal revenue and marginal revenue product refer to the gains to the firm from employing one additional worker.

The marginal revenue product of labor

Which of the following could explain an increase in labor supply to a particular labor market?

Gerhardt is a bicycle mechanic,and he can repair 6 bikes a day at a market price of $25.00.If he can't find any bike shop to hire him,

A perfectly competitive firm should hire additional units of labor in a competitive labor market if

If eight workers can manufacture 70 tables per day and nine workers can manufacture 90 tables per day,

As applied to labor demand,the marginal approach to profit

If the federal government initiated a program through which individuals could receive a tax break for acquiring additional training in selected fields,the

A market in which resources are traded is known as a(n)

The additional output produced when one additional worker is hired is referred to as the __________ of labor.

The labor market for ultrasound technicians in Cleveland is initially in equilibrium.Which of the following would lead to a lower wage rate and higher employment in that market?

Sally's Salon sells haircuts in a perfectly competitive market.As the salon hires additional workers,the marginal revenue product of labor

Tova is trying to get a bakery to hire her.She said that if she helped out,the shop could sell an additional 5 cakes per day.If each cake sells for $10 and the owner hires her,then

A firm can maximize profit by hiring labor up to the point where

The labor supply curve is typically upward sloping because as the wage rate rises,

-Which of the following could explain a movement from point F to point H in Figure 12-2?

Three accountants can prepare 5 tax returns a day and four accountants can prepare 7 tax returns a day.If the marginal revenue product of hiring the fourth accountant is $300,then in a perfectly competitive product market the price of each tax return is

The term marginal revenue product (MRP)refers to the change in output if an additional worker is employed.

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters