Exam 18: The Markets for the Factors of Production

Suppose that a large lake in the middle of Minnesota evaporates,leaving fertile farm land for growing corn.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and rents earned by landowners?

Table 18-4 -Refer to Table 18-4.How many workers should the firm hire?

The distinction between purchase price and rental price applies to which factor(s)of production?

If Emma's individual labor supply curve is upward sloping,then Emma responds to an increase in

Scenario 18-4 Rocchetta Industries manufactures and supplies bottled water in Mexico. As a result of a contamination of water supplies at many of Mexico's resort communities, the demand for bottled water has increased. -Refer to Scenario 18-4.We would expect that,as a result of the contamination,the value of the marginal product for Rocchetta Industries' workers would

For the profit-maximizing competitive firm,the value of marginal product curve is

Consider the market for capital equipment.Suppose the value of the marginal product of capital equipment increases.Holding all else constant,what will happen to the equilibrium rental price of capital equipment?

Suppose that in January a profit-maximizing firm has 25 employees.By February,the firm has decreased employment.One can infer that,when 25 employees are hired,the

Labor supply curves are always upward sloping.

Figure 18-2 -Refer to Figure 18-2.What happens to the profit earned by apple producers and to the wage earned by apple pickers when the price of apples rises?

Suppose the government designates certain areas within a community to be "wetlands," making it illegal to build on the land.What happens to land not classified as "wetlands" within the community? (i) The price of non-wetland land will rise. (ii) The marginal product of non-wetland land will fall. (iii) The marginal product of non-wetland land will rise.

Scenario 18-2 Jerry has two jobs, one for the winter and one for the summer. In the winter, he workers as a lift attendant at a ski resort where he earns $10 per hour. During the summer, Jerry drives a tour bus around the ski resort, earning $12 per hour. -Refer to Scenario 18-2.During the winter months,what is Jerry's opportunity cost of taking an hour off work to go skiing?

Firms pay out a portion of their earnings in the form of interest and dividends,and those payments are a portion of the economy's capital income.

Table 18-1 -Refer to Table 18-1.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $5 in a competitive market.What is the total revenue per day that the firm will earn if it employs five workers?

Consider the labor market for computer programmers,which is in equilibrium.During the late 1990s,the value of the marginal product of all computer programmers increased dramatically.Holding all else equal,what effect did this process have on the equilibrium quantity in the labor market for computer programmers?

Table 18-2 Consider the following daily production data for Davis Golf Balls, Inc. Davis Golf Balls, Inc. sells golf balls for 50 cents each and pays the workers a wage of $30 a day. -Refer to Table 18-2.Suppose that there is a technological advance that allows Davis Golf Balls,Inc.employees to produce more golf balls than they could before.Because of this change,

What does an upward-sloping labor supply curve mean?

A profit-maximizing,competitive firm will always hire an additional worker when the additional worker makes a positive contribution to

The opportunity cost of an hour of leisure is

Suppose that a toxic waste spill renders half of the land in New Jersey uninhabitable.Assuming that land and labor are complements in the production function,what would happen to the wages earned by workers and rents earned by landowners?