Question 1

The term Luddite refers to "tekkies" or people who are the first to adopt new technological advances.

Accepted Answer

A) True 
 B)False

Question 2

For a lawn mowing and yard maintenance business,the capital stock would include lawn mowers,rakes,shovels,and hoses.

Accepted Answer

A) True 
 B)False

Question 3

What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

Accepted Answer

A) Labor supply decreases in Mexico and decreases in the United States. 
B) Labor supply increases in the United States and increases in Mexico. 
C) Labor supply increases in the United States and decreases in Mexico. 
D) Labor supply increases in Mexico and decreases in United States. 
A) Labor supply decreases in Mexico and decreases in the United States. 
B) Labor supply increases in the United States and increases in Mexico. 
C) Labor supply increases in the United States and decreases in Mexico. 
D) Labor supply increases in Mexico and decreases in United States.

Question 4

Scenario 18-1
Gertrude Kelp owns three boats that participate in commercial fishing for fresh Pacific salmon off the coast of Alaska. As part of her business she hires a captain and several crew members for each boat. In the market for fresh Pacific salmon, there are thousands of firms like Gertrude's. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market.
-Refer to Scenario 18-1.If the price of fresh Pacific salmon were to decrease significantly,it is most likely that Gertrude would

Accepted Answer

A) reduce her demand for crew members. 
B) hire more boats. 
C) become a seller in at least one factor market. 
D) hire more crew members. 
A) reduce her demand for crew members. 
B) hire more boats. 
C) become a seller in at least one factor market. 
D) hire more crew members.

Question 5

The Black Death in fourteenth-century Europe resulted in

Accepted Answer

A) a lower marginal product of labor of surviving workers. 
B) a higher marginal product of land. 
C) economic hardship for surviving peasants. 
D) economic hardship for surviving landowners. 
A) a lower marginal product of labor of surviving workers. 
B) a higher marginal product of land. 
C) economic hardship for surviving peasants. 
D) economic hardship for surviving landowners.

Question 6

Figure 18-4
  
-Refer to Figure 18-4.When the relevant labor demand curve is D₁ and the labor market is in equilibrium,

Accepted Answer

A) the value of the marginal product of labor to firms is less than W₁. 
B) the opportunity cost of leisure to workers is greater than W₁. 
C) the wage is W₁. 
D) All of the above are correct. 
A) the value of the marginal product of labor to firms is less than W₁. 
B) the opportunity cost of leisure to workers is greater than W₁. 
C) the wage is W₁. 
D) All of the above are correct.

Question 7

Which of the following best describes the economy's stock of equipment and structures?

Accepted Answer

A) capital 
B) aggregate demand 
C) long-term inventory 
D) aggregate stock 
A) capital 
B) aggregate demand 
C) long-term inventory 
D) aggregate stock

Question 8

Table 18-3
  
-Refer to Table 18-3.What is the fourth worker's contribution to total revenue?

Accepted Answer

A) $-100 
B) $40 
C) $400 
D) $500 
A) $-100 
B) $40 
C) $400 
D) $500

Question 9

For maximum profit,a firm hires labor up to the point at which the wage equals (i)	the value of the marginal product of labor.
(ii)	the marginal cost of an additional unit of output.
(iii)	output price multiplied by the marginal product of labor.

Accepted Answer

A) (i) and (ii) 
B) (i) and (iii) 
C) (ii) and (iii) 
D) All of the above are correct. 
A) (i) and (ii) 
B) (i) and (iii) 
C) (ii) and (iii) 
D) All of the above are correct.

Question 10

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

Accepted Answer

A) work and wage 
B) work and leisure 
C) wage and productivity 
D) technology and wage 
A) work and wage 
B) work and leisure 
C) wage and productivity 
D) technology and wage

Question 11

Scenario 18-1
Gertrude Kelp owns three boats that participate in commercial fishing for fresh Pacific salmon off the coast of Alaska. As part of her business she hires a captain and several crew members for each boat. In the market for fresh Pacific salmon, there are thousands of firms like Gertrude's. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market.
-Refer to Scenario 18-1.When Gertrude participates in the labor market to hire crew members for her boats,she is most likely considered a

Accepted Answer

A) demander of labor services. 
B) supplier of labor services. 
C) demander of capital. 
D) supplier of capital. 
A) demander of labor services. 
B) supplier of labor services. 
C) demander of capital. 
D) supplier of capital.

Question 12

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.What is the value of the marginal product of the second worker?

Accepted Answer

A) $50 
B) $62.50 
C) $75 
D) $150 
A) $50 
B) $62.50 
C) $75 
D) $150

Question 13

If hiring more workers results in each additional worker contributing successively smaller amounts of output,then

Accepted Answer

A) diminishing profitability is present. 
B) diminishing marginal cost is present. 
C) diminishing marginal product is present. 
D) diminishing total product is present. 
A) diminishing profitability is present. 
B) diminishing marginal cost is present. 
C) diminishing marginal product is present. 
D) diminishing total product is present.

Question 14

Diminishing marginal product is closely related to

Accepted Answer

A) diminishing total cost. 
B) diminishing marginal cost. 
C) increasing price. 
D) increasing marginal cost. 
A) diminishing total cost. 
B) diminishing marginal cost. 
C) increasing price. 
D) increasing marginal cost.

Question 15

The marginal product of labor is

Accepted Answer

A) the increase in the amount of output from an additional unit of labor. 
B) the total amount of output divided by the total units of labor. 
C) total revenue minus total cost. 
D) also called the marginal profit. 
A) the increase in the amount of output from an additional unit of labor. 
B) the total amount of output divided by the total units of labor. 
C) total revenue minus total cost. 
D) also called the marginal profit.

Question 16

Which of the following events could increase the demand for labor?

Accepted Answer

A) a decrease in output price 
B) a decrease in the amount of capital available for workers to use 
C) an increase in the marginal productivity of workers 
D) All of the above are correct. 
A) a decrease in output price 
B) a decrease in the amount of capital available for workers to use 
C) an increase in the marginal productivity of workers 
D) All of the above are correct.

Question 17

Table 18-3
  
-Refer to Table 18-3.What is the marginal product of the fourth worker?

Accepted Answer

A) 30 
B) 40 
C) 100 
D) 400 
A) 30 
B) 40 
C) 100 
D) 400

Question 18

Who receives income from capital in the United States?

Accepted Answer

A) bank depositors 
B) bondholders 
C) stockholders 
D) All of the above are correct. 
A) bank depositors 
B) bondholders 
C) stockholders 
D) All of the above are correct.

Question 19

Table 18-6
  
-Refer to Table 18-6.Suppose that the firm pays its workers $55 per day.Each unit of output sells for $12.How many days of labor should the firm hire?

Accepted Answer

A) 3 
B) 4 
C) 5 
D) 6 
A) 3 
B) 4 
C) 5 
D) 6

Question 20

Which of the following events would shift the labor supply curve?

Accepted Answer

A) changes in the number of women willing to work 
B) immigration of workers 
C) changing attitudes towards work 
D) All of the above are correct. 
A) changes in the number of women willing to work 
B) immigration of workers 
C) changing attitudes towards work 
D) All of the above are correct.

Exam 18: The Markets for the Factors of Production

The term Luddite refers to "tekkies" or people who are the first to adopt new technological advances.

For a lawn mowing and yard maintenance business,the capital stock would include lawn mowers,rakes,shovels,and hoses.

What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

The Black Death in fourteenth-century Europe resulted in

Figure 18-4 -Refer to Figure 18-4.When the relevant labor demand curve is D₁ and the labor market is in equilibrium,

Which of the following best describes the economy's stock of equipment and structures?

Table 18-3 -Refer to Table 18-3.What is the fourth worker's contribution to total revenue?

For maximum profit,a firm hires labor up to the point at which the wage equals (i) the value of the marginal product of labor. (ii) the marginal cost of an additional unit of output. (iii) output price multiplied by the marginal product of labor.

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

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.What is the value of the marginal product of the second worker?

If hiring more workers results in each additional worker contributing successively smaller amounts of output,then

Diminishing marginal product is closely related to

The marginal product of labor is

Which of the following events could increase the demand for labor?

Table 18-3 -Refer to Table 18-3.What is the marginal product of the fourth worker?

Who receives income from capital in the United States?

Table 18-6 -Refer to Table 18-6.Suppose that the firm pays its workers $55 per day.Each unit of output sells for $12.How many days of labor should the firm hire?

Which of the following events would shift the labor supply curve?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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