Question 1

-If the quantity of capital supplied exceeds the quantity of capital demanded, what takes place?

Accepted Answer

If the quantity of capital supplied exce

Question 2

An increase in the price of the firm's output leads to a

Accepted Answer

A) movement up along the demand for labor curve. 
B) movement down along the demand for labor curve. 
C) rightward shift of the demand for labor curve. 
D) leftward shift of the demand for labor curve. 
E) rightward shift of the supply of labor curve. 
A) movement up along the demand for labor curve. 
B) movement down along the demand for labor curve. 
C) rightward shift of the demand for labor curve. 
D) leftward shift of the demand for labor curve. 
E) rightward shift of the supply of labor curve.

Question 3

Oil is an example of

Accepted Answer

A) a nonrenewable natural resource. 
B) a renewable natural resource. 
C) physical capital. 
D) a resource for which the true value cannot be measured. 
E) a resource with a perfectly inelastic demand. 
A) a nonrenewable natural resource. 
B) a renewable natural resource. 
C) physical capital. 
D) a resource for which the true value cannot be measured. 
E) a resource with a perfectly inelastic demand.

Question 4

If the demand for labor decreases, then the equilibrium wage rate ________ and the equilibrium quantity of labor ________.

Accepted Answer

A) falls; increases 
B) might rise, fall, or not change; increases 
C) rises; might increase, decrease, or not change 
D) falls; decreases 
E) falls; does not change 
A) falls; increases 
B) might rise, fall, or not change; increases 
C) rises; might increase, decrease, or not change 
D) falls; decreases 
E) falls; does not change

Question 5

Why is the supply of an nonrenewable natural resource perfectly elastic?

Accepted Answer

The supply of an nonrenewable natural re

Question 6

Which of the following is a renewable resource?
I∙a forest of pine trees grown by Georgia-Pacific
Ii∙oil reserves in Saudi Arabia
Iii∙the Everglades

Accepted Answer

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

Question 7

-Kevin owns a personal training gym in Laredo, Texas.He charges $41 per session.The above table shows the marginal product of trainers in Kevin's gym.If Kevin hires three trainers, the value of marginal product of the third trainer equals

Accepted Answer

A) 2 clients. 
B) $82. 
C) 9 clients. 
D) $369. 
E) $123. 
A) 2 clients. 
B) $82. 
C) 9 clients. 
D) $369. 
E) $123.

Question 8

If the wage rate is above the equilibrium wage rate, the quantity of labor demanded is ________ the quantity of labor supplied.

Accepted Answer

A) greater than 
B) less than 
C) equal to 
D) the negative of 
E) not comparable to 
A) greater than 
B) less than 
C) equal to 
D) the negative of 
E) not comparable to

Question 9

The value of marginal product of labor curve

Accepted Answer

A) is upward sloping because firms want to hire more workers to increase production. 
B) shows the price of a factor of production multiplied by the amount of the factor employed. 
C) is the same as a firm's supply of labor curve. 
D) is downward sloping if each additional worker's marginal product is decreasing. 
E) is U-shaped. 
A) is upward sloping because firms want to hire more workers to increase production. 
B) shows the price of a factor of production multiplied by the amount of the factor employed. 
C) is the same as a firm's supply of labor curve. 
D) is downward sloping if each additional worker's marginal product is decreasing. 
E) is U-shaped.

Question 10

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $45.Which of the following is correct?

Accepted Answer

A) The firm is employing the profit-maximizing quantity of labor. 
B) Too much labor is currently employed and the firm will lay off some workers. 
C) Too few workers are currently employed and the firm will hire more workers. 
D) The firm should shut down and produce nothing. 
E) More information about the price of the product is needed to determine if the firm is hiring the profit-maximizing amount of labor. 
A) The firm is employing the profit-maximizing quantity of labor. 
B) Too much labor is currently employed and the firm will lay off some workers. 
C) Too few workers are currently employed and the firm will hire more workers. 
D) The firm should shut down and produce nothing. 
E) More information about the price of the product is needed to determine if the firm is hiring the profit-maximizing amount of labor.

Question 11

The rule for maximizing profit is to hire labor up to the point at which the value of marginal product

Accepted Answer

A) equals the wage rate. 
B) is greater than the wage rate. 
C) is less than the wage rate. 
D) is a mirror image of the wage rate. 
E) equals the price of the product produced. 
A) equals the wage rate. 
B) is greater than the wage rate. 
C) is less than the wage rate. 
D) is a mirror image of the wage rate. 
E) equals the price of the product produced.

Question 12

The figure above shows a firm's VMP curve.
-Suppose that new technology raises the workers' marginal product.As a result,

Accepted Answer

A) there is a movement upward along the curve, such as a movement from point C to point B. 
B) there is a movement downward along the curve, such as a movement from point C to point D. 
C) the curve shifts rightward. 
D) the curve shifts leftward. 
E) More information is needed to answer the question. 
A) there is a movement upward along the curve, such as a movement from point C to point B. 
B) there is a movement downward along the curve, such as a movement from point C to point D. 
C) the curve shifts rightward. 
D) the curve shifts leftward. 
E) More information is needed to answer the question.

Question 13

Why is the demand for labor a "derived demand"?

Accepted Answer

The demand for labor arises because we n

Question 14

Explain why an individual's labor supply curve is backward bending.

Accepted Answer

An individual's labor supply curve bends

Question 15

Entrepreneurship differs from the other factors of production because it

Accepted Answer

A) is not real. 
B) is the most important. 
C) has only existed since the new economy of the 1990s. 
D) is not traded in a factor market. 
E) is not paid. 
A) is not real. 
B) is the most important. 
C) has only existed since the new economy of the 1990s. 
D) is not traded in a factor market. 
E) is not paid.

Question 16

The supply of land is perfectly ________ because no matter the amount of rent offered for land, the quantity of land is ________.

Accepted Answer

A) elastic; fixed 
B) inelastic; fixed 
C) elastic: renewable 
D) inelastic; nonrenewable 
E) elastic; nonrenewable 
A) elastic; fixed 
B) inelastic; fixed 
C) elastic: renewable 
D) inelastic; nonrenewable 
E) elastic; nonrenewable

Question 17

Which of the following decreases the supply of labor that competes with union labor?

Accepted Answer

A) an increase in the minimum wage 
B) an increase in the demand for imported goods 
C) an increase in union members' productivity 
D) new laws that restrict immigration 
E) All of the above would decrease the supply of labor. 
A) an increase in the minimum wage 
B) an increase in the demand for imported goods 
C) an increase in union members' productivity 
D) new laws that restrict immigration 
E) All of the above would decrease the supply of labor.

Question 18

The supply of labor curve for nurses shifts if

Accepted Answer

A) the wage rate paid nurses increases. 
B) there is an increase in the time spent in nursing school. 
C) the value of marginal product of nurses increases. 
D) the value of marginal product of nurses decreases. 
E) the marginal product of nurses decreases. 
A) the wage rate paid nurses increases. 
B) there is an increase in the time spent in nursing school. 
C) the value of marginal product of nurses increases. 
D) the value of marginal product of nurses decreases. 
E) the marginal product of nurses decreases.

Question 19

The table has the marginal products for workers at Bart's Bats, a baseball bat factory.
-Using the above table, if the wage rate for a worker in a baseball bat manufacturing plant is $12 an hour, and the price of a bat is $3, then the firm will hire ________ workers.

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
E) 5 
A) 1 
B) 2 
C) 3 
D) 4 
E) 5

Question 20

As the quantity of land used increases, its value of marginal product

Accepted Answer

A) decreases and then eventually increases. 
B) increases and then eventually decreases. 
C) remains constant. 
D) might increase, decrease, or remain constant depending if the rent for the land rises, falls, or does not change. 
E) The premise of the question is wrong because land does not have a value of marginal product. 
A) decreases and then eventually increases. 
B) increases and then eventually decreases. 
C) remains constant. 
D) might increase, decrease, or remain constant depending if the rent for the land rises, falls, or does not change. 
E) The premise of the question is wrong because land does not have a value of marginal product.

-If the quantity of capital supplied exceeds the quantity of capital demanded, what takes place?

An increase in the price of the firm's output leads to a

Oil is an example of

If the demand for labor decreases, then the equilibrium wage rate and the equilibrium quantity of labor .

Why is the supply of an nonrenewable natural resource perfectly elastic?

Which of the following is a renewable resource? I∙a forest of pine trees grown by Georgia-Pacific Ii∙oil reserves in Saudi Arabia Iii∙the Everglades

-Kevin owns a personal training gym in Laredo, Texas.He charges $41 per session.The above table shows the marginal product of trainers in Kevin's gym.If Kevin hires three trainers, the value of marginal product of the third trainer equals

If the wage rate is above the equilibrium wage rate, the quantity of labor demanded is ________ the quantity of labor supplied.

The value of marginal product of labor curve

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $45.Which of the following is correct?

The rule for maximizing profit is to hire labor up to the point at which the value of marginal product

The figure above shows a firm's VMP curve. -Suppose that new technology raises the workers' marginal product.As a result,

Why is the demand for labor a "derived demand"?

Explain why an individual's labor supply curve is backward bending.

Entrepreneurship differs from the other factors of production because it

The supply of land is perfectly because no matter the amount of rent offered for land, the quantity of land is .

Which of the following decreases the supply of labor that competes with union labor?

The supply of labor curve for nurses shifts if

The table has the marginal products for workers at Bart's Bats, a baseball bat factory. -Using the above table, if the wage rate for a worker in a baseball bat manufacturing plant is $12 an hour, and the price of a bat is $3, then the firm will hire ________ workers.

As the quantity of land used increases, its value of marginal product

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

-If the quantity of capital supplied exceeds the quantity of capital demanded, what takes place?

An increase in the price of the firm's output leads to a

Oil is an example of

If the demand for labor decreases, then the equilibrium wage rate ________ and the equilibrium quantity of labor ________.

Why is the supply of an nonrenewable natural resource perfectly elastic?

Which of the following is a renewable resource? I∙a forest of pine trees grown by Georgia-Pacific Ii∙oil reserves in Saudi Arabia Iii∙the Everglades

-Kevin owns a personal training gym in Laredo, Texas.He charges $41 per session.The above table shows the marginal product of trainers in Kevin's gym.If Kevin hires three trainers, the value of marginal product of the third trainer equals

If the wage rate is above the equilibrium wage rate, the quantity of labor demanded is ________ the quantity of labor supplied.

The value of marginal product of labor curve

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $45.Which of the following is correct?

The rule for maximizing profit is to hire labor up to the point at which the value of marginal product

The figure above shows a firm's VMP curve. -Suppose that new technology raises the workers' marginal product.As a result,

Why is the demand for labor a "derived demand"?

Explain why an individual's labor supply curve is backward bending.

Entrepreneurship differs from the other factors of production because it

The supply of land is perfectly ________ because no matter the amount of rent offered for land, the quantity of land is ________.

Which of the following decreases the supply of labor that competes with union labor?

The supply of labor curve for nurses shifts if

The table has the marginal products for workers at Bart's Bats, a baseball bat factory. -Using the above table, if the wage rate for a worker in a baseball bat manufacturing plant is $12 an hour, and the price of a bat is $3, then the firm will hire ________ workers.

As the quantity of land used increases, its value of marginal product

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

If the demand for labor decreases, then the equilibrium wage rate and the equilibrium quantity of labor .

The supply of land is perfectly because no matter the amount of rent offered for land, the quantity of land is .