Question 1

As a result of severe flooding,a farmer loses half of his productive farmland.He should expect to see the marginal productivity of his remaining land

Accepted Answer

A) increase. 
B) remain unchanged. 
C) decrease, but remain positive. 
D) decrease and become negative. 
A) increase. 
B) remain unchanged. 
C) decrease, but remain positive. 
D) decrease and become negative.

Question 2

If the value of the marginal product of labor exceeds the wage,then hiring another worker increases the firm's

Accepted Answer

A) profit. 
B) total cost. 
C) total revenue. 
D) All of the above are correct. 
A) profit. 
B) total cost. 
C) total revenue. 
D) All of the above are correct.

Question 3

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 quantity of capital equipment?

Accepted Answer

A) The equilibrium quantity of capital equipment increases. 
B) The equilibrium quantity of capital equipment decreases. 
C) The equilibrium quantity of capital equipment does not change. 
D) It is not possible to determine what will happen to the equilibrium quantity of capital equipment. 
A) The equilibrium quantity of capital equipment increases. 
B) The equilibrium quantity of capital equipment decreases. 
C) The equilibrium quantity of capital equipment does not change. 
D) It is not possible to determine what will happen to the equilibrium quantity of capital equipment.

Question 4

In the 1980s,the dangerous Ebola virus entered the United States through contaminated monkeys that were imported for use in medical experiments.Suppose this virus had not been contained but had spread to the general population.Assume that the virus is lethal in half of the people who are exposed to it.Describe the resulting effect on labor productivity.

Accepted Answer

There are two possible direct effects: O

Question 5

To maximize profit,a competitive firm hires workers up to the point of intersection of the

Accepted Answer

A) marginal product curve and the wage line. 
B) value of marginal product curve and the wage line. 
C) value of marginal product curve and the marginal revenue curve. 
D) total revenue curve and the wage line. 
A) marginal product curve and the wage line. 
B) value of marginal product curve and the wage line. 
C) value of marginal product curve and the marginal revenue curve. 
D) total revenue curve and the wage line.

Question 6

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

Question 7

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.Assume that Jerry has an upward-sloping labor supply curve.If the opportunity cost of Jerry's leisure time increases,he will respond by working

Accepted Answer

A) more hours. 
B) fewer hours. 
C) an equal number of hours. 
D) a number of hours that cannot be determined from the information.The labor demand curve is needed to make this determination. 
A) more hours. 
B) fewer hours. 
C) an equal number of hours. 
D) a number of hours that cannot be determined from the information.The labor demand curve is needed to make this determination.

Question 8

In the United States economy,which of the following factors of production is considered to be the most important in terms of the magnitude of income earned by that factor of production?

Accepted Answer

A) land 
B) labor 
C) profit 
D) capital 
A) land 
B) labor 
C) profit 
D) capital

Question 9

What happens to the labor supply curves for academic economists when the wages paid to government economists increase?

Accepted Answer

A) Labor supply decreases for government economists. 
B) Labor supply increases for academic economists. 
C) Labor supply decreases for academic economists. 
D) Both a and c are correct. 
A) Labor supply decreases for government economists. 
B) Labor supply increases for academic economists. 
C) Labor supply decreases for academic economists. 
D) Both a and c are correct.

Question 10

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

Accepted Answer

A) True 
 B)False

Question 11

As the rental price of capital decreases,more capital is used in production and the marginal product of capital increases.

Accepted Answer

A) True 
 B)False

Question 12

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 labor market for computer programmers?

Accepted Answer

A) The equilibrium wage increased, and the equilibrium quantity of labor increased. 
B) The equilibrium wage increased, and the equilibrium quantity of labor decreased. 
C) The equilibrium wage decreased, and the equilibrium quantity of labor increased. 
D) The equilibrium wage decreased, and the equilibrium quantity of labor decreased. 
A) The equilibrium wage increased, and the equilibrium quantity of labor increased. 
B) The equilibrium wage increased, and the equilibrium quantity of labor decreased. 
C) The equilibrium wage decreased, and the equilibrium quantity of labor increased. 
D) The equilibrium wage decreased, and the equilibrium quantity of labor decreased.

Question 13

If consumers demand more genetically engineered foods,then the value of genetic engineers' marginal product of labor will

Accepted Answer

A) rise. 
B) fall. 
C) remain unchanged. 
D) rise or fall; either is possible. 
A) rise. 
B) fall. 
C) remain unchanged. 
D) rise or fall; either is possible.

Question 14

Which of the following statements is correct? An individual worker's labor supply curve

Accepted Answer

A) can never slope downward. 
B) slopes downward if that person responds to a higher wage by taking fewer hours of leisure per week. 
C) slopes downward if that person responds to a higher opportunity cost of leisure by working fewer hours per week. 
D) slopes upward if that person works the same number of hours per week, regardless of the opportunity cost of leisure. 
A) can never slope downward. 
B) slopes downward if that person responds to a higher wage by taking fewer hours of leisure per week. 
C) slopes downward if that person responds to a higher opportunity cost of leisure by working fewer hours per week. 
D) slopes upward if that person works the same number of hours per week, regardless of the opportunity cost of leisure.

Question 15

Suppose that a new invention increases the marginal productivity of labor,shifting labor demand to the right.Such an invention would be an example of

Accepted Answer

A) labor-saving technology. 
B) labor-augmenting technology. 
C) Luddite technology. 
D) supply-shifting technology. 
A) labor-saving technology. 
B) labor-augmenting technology. 
C) Luddite technology. 
D) supply-shifting technology.

Question 16

Figure 18-3
  
-Refer to Figure 18-3.The shift of the labor supply curve from S₁ to S₂ could possibly be explained by

Accepted Answer

A) a change in workers' attitudes toward the work-leisure tradeoff. 
B) decreases in wages in other labor markets. 
C) immigration of workers into the region or country. 
D) All of the above are correct. 
A) a change in workers' attitudes toward the work-leisure tradeoff. 
B) decreases in wages in other labor markets. 
C) immigration of workers into the region or country. 
D) All of the above are correct.

Question 17

Table 18-6
  
-Refer to Table 18-6.Suppose that the firm pays its workers $75 per day.Each unit of output sells for $10.How many days of labor should the firm hire?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 18

Table 18-5
  
-Refer to Table 18-5.What is the value for the cell labeled DD?

Accepted Answer

A) -$100 
B) $300 
C) $100 
D) $50 
A) -$100 
B) $300 
C) $100 
D) $50

Question 19

In 2005,the total income of all U.S.residents was about $8 trillion.

Accepted Answer

A) True 
 B)False

Question 20

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.Based on the given information,it is likely that Gertrude's firm has

Accepted Answer

A) some influence over the wages paid to crew members but no influence over the price of salmon. 
B) some influence over the price of salmon but no influence over the wages paid to crew members. 
C) some influence over both the price of salmon and the wages paid to crew members. 
D) no influence over either the price of salmon or the wages paid to crew members. 
A) some influence over the wages paid to crew members but no influence over the price of salmon. 
B) some influence over the price of salmon but no influence over the wages paid to crew members. 
C) some influence over both the price of salmon and the wages paid to crew members. 
D) no influence over either the price of salmon or the wages paid to crew members.

Exam 18: The Markets for the Factors of Production

As a result of severe flooding,a farmer loses half of his productive farmland.He should expect to see the marginal productivity of his remaining land

If the value of the marginal product of labor exceeds the wage,then hiring another worker increases the firm's

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 quantity of capital equipment?

To maximize profit,a competitive firm hires workers up to the point of intersection of the

The Black Death in fourteenth-century Europe resulted in

In the United States economy,which of the following factors of production is considered to be the most important in terms of the magnitude of income earned by that factor of production?

What happens to the labor supply curves for academic economists when the wages paid to government economists increase?

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

As the rental price of capital decreases,more capital is used in production and the marginal product of capital increases.

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 labor market for computer programmers?

If consumers demand more genetically engineered foods,then the value of genetic engineers' marginal product of labor will

Which of the following statements is correct? An individual worker's labor supply curve

Suppose that a new invention increases the marginal productivity of labor,shifting labor demand to the right.Such an invention would be an example of

Figure 18-3 -Refer to Figure 18-3.The shift of the labor supply curve from S₁ to S₂ could possibly be explained by

Table 18-6 -Refer to Table 18-6.Suppose that the firm pays its workers $75 per day.Each unit of output sells for $10.How many days of labor should the firm hire?

Table 18-5 -Refer to Table 18-5.What is the value for the cell labeled DD?

In 2005,the total income of all U.S.residents was about $8 trillion.

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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