Question 1

How does an increase in the adult population affect the labor market?

Accepted Answer

A) The demand for labor will become more inelastic. 
B) The supply of labor will decrease. 
C) The supply of labor will increase. 
D) The demand for labor will decrease. 
E) The demand for labor will increase. 
A) The demand for labor will become more inelastic. 
B) The supply of labor will decrease. 
C) The supply of labor will increase. 
D) The demand for labor will decrease. 
E) The demand for labor will increase.

Question 2

The total output of candles in Nick's Wicks candle shop increases from 20 per hour to 30 per hour as he hires the second worker.The price of each candle is $2.The

Accepted Answer

A) marginal product of the second worker is 20 candles. 
B) marginal product of the second worker is 30 candles. 
C) value of marginal product of the second worker is $20. 
D) value of marginal product of the second worker is $30. 
E) value of marginal product of the second worker is $60. 
A) marginal product of the second worker is 20 candles. 
B) marginal product of the second worker is 30 candles. 
C) value of marginal product of the second worker is $20. 
D) value of marginal product of the second worker is $30. 
E) value of marginal product of the second worker is $60.

Question 3

The price of an nonrenewable resource is expected to rise at a rate equal to the

Accepted Answer

A) rate of supply. 
B) rate of population growth. 
C) rate of technological change. 
D) rate of demand. 
E) interest rate. 
A) rate of supply. 
B) rate of population growth. 
C) rate of technological change. 
D) rate of demand. 
E) interest rate.

Question 4

The figure above shows a firm's VMP curve.
-Suppose that the price of the product rises.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 5

Of the following, a union is LEAST likely to support

Accepted Answer

A) an increase in the minimum wage rate. 
B) laws that restrict immigration into the country. 
C) on-the-job training that makes their members more productive. 
D) laws that increase the quantity of the nation's imports. 
E) programs that boost the demand for the goods and services their members produce. 
A) an increase in the minimum wage rate. 
B) laws that restrict immigration into the country. 
C) on-the-job training that makes their members more productive. 
D) laws that increase the quantity of the nation's imports. 
E) programs that boost the demand for the goods and services their members produce.

Question 6

The supply of nonrenewable natural resources is

Accepted Answer

A) perfectly inelastic. 
B) perfectly elastic. 
C) always elastic but not necessarily perfectly elastic. 
D) inelastic at high prices and elastic at low prices. 
E) elastic at high prices and inelastic at low prices. 
A) perfectly inelastic. 
B) perfectly elastic. 
C) always elastic but not necessarily perfectly elastic. 
D) inelastic at high prices and elastic at low prices. 
E) elastic at high prices and inelastic at low prices.

Question 7

Which of the following is a correct statement of the relationship between advances in technology and the demand for labor?

Accepted Answer

A) The demand decreases for some types of labor and increases for other types of labor. 
B) The demand for labor always decreases when technology advances. 
C) The demand for labor always increases when technology advances. 
D) Technology advances when the demand for labor advances. 
E) None of the above answers is correct. 
A) The demand decreases for some types of labor and increases for other types of labor. 
B) The demand for labor always decreases when technology advances. 
C) The demand for labor always increases when technology advances. 
D) Technology advances when the demand for labor advances. 
E) None of the above answers is correct.

Question 8

The figure above shows a labor market in which a union has formed
-Labor unions' support for programs that increase their members' marginal products represents an attempt to shift the

Accepted Answer

A) labor demand curve from LD₀ to LD₁. 
B) labor demand curve from LD₁ to LD₀. 
C) labor supply curve from LS₀ to LS₁. 
D) labor supply curve from LS₁ to LS₀. 
E) None of the above answers is correct. 
A) labor demand curve from LD₀ to LD₁. 
B) labor demand curve from LD₁ to LD₀. 
C) labor supply curve from LS₀ to LS₁. 
D) labor supply curve from LS₁ to LS₀. 
E) None of the above answers is correct.

Question 9

An increase in the rental rate of capital ________ the quantity of capital demanded and ________ the quantity of capital supplied.

Accepted Answer

A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
E) does not change; does not change 
A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
E) does not change; does not change

Question 10

Why do baseball players make so much money, while kindergarten teachers in private schools make so much less? In your answer, discuss the value of marginal product and the actions of profit-maximizing firms.

Accepted Answer

Let us consider the value of the margina

Question 11

Which rule does the United Corporation use when maximizing profit?

Accepted Answer

A) Employ all resources until the value of their marginal products is equal. 
B) If the value of the marginal product of labor exceeds the wage rate, hire fewer workers. 
C) Hire labor up to point at which the value of marginal product of labor equals the wage rate. 
D) Reduce the wage rate until it equals the marginal product of labor. 
E) Hire labor up to point at which the value of marginal product of labor equals the price of the good or service the labor produces for United Corporation. 
A) Employ all resources until the value of their marginal products is equal. 
B) If the value of the marginal product of labor exceeds the wage rate, hire fewer workers. 
C) Hire labor up to point at which the value of marginal product of labor equals the wage rate. 
D) Reduce the wage rate until it equals the marginal product of labor. 
E) Hire labor up to point at which the value of marginal product of labor equals the price of the good or service the labor produces for United Corporation.

Question 12

The supply of labor curve shifts leftward if

Accepted Answer

A) the population increases. 
B) the demand for labor curve shifts leftward. 
C) the supply of labor increases. 
D) the wage rate falls. 
E) the supply of labor decreases. 
A) the population increases. 
B) the demand for labor curve shifts leftward. 
C) the supply of labor increases. 
D) the wage rate falls. 
E) the supply of labor decreases.

Question 13

The demand for a factor of production is called a derived demand because it is derived from

Accepted Answer

A) the demand for goods and services produced by the factor of production. 
B) a table of specific prices and quantities. 
C) the ideas of an entrepreneur. 
D) a financial market. 
E) the supply of the factor of production. 
A) the demand for goods and services produced by the factor of production. 
B) a table of specific prices and quantities. 
C) the ideas of an entrepreneur. 
D) a financial market. 
E) the supply of the factor of production.

Question 14

What is the effect on the supply of low-skilled labor of an increase in the number of people pursuing higher education?

Accepted Answer

A) It becomes more inelastic. 
B) The supply of low-skilled labor decreases. 
C) The supply of low-skilled labor increases. 
D) It becomes more elastic. 
E) None of the above answers is correct. 
A) It becomes more inelastic. 
B) The supply of low-skilled labor decreases. 
C) The supply of low-skilled labor increases. 
D) It becomes more elastic. 
E) None of the above answers is correct.

Question 15

If the demand for a good increases, the demand for the factors used to produce the good

Accepted Answer

A) increases. 
B) decreases. 
C) stays the same. 
D) could increase, decrease, or stay the same depending on whether the demand for the good is elastic, inelastic, or unit elastic. 
E) None of the above answers is correct. 
A) increases. 
B) decreases. 
C) stays the same. 
D) could increase, decrease, or stay the same depending on whether the demand for the good is elastic, inelastic, or unit elastic. 
E) None of the above answers is correct.

Question 16

Why does an increase in the minimum wage increase the demand for union labor?

Accepted Answer

An increase in the minimum wage raises t

Question 17

Which of the following is true about the market for capital?

Accepted Answer

A) The demand for capital curve is upward sloping and the supply of capital curve is downward sloping. 
B) The supply of capital is perfectly elastic. 
C) The supply of capital curve is upward sloping and the demand for capital curve is downward sloping. 
D) The supply of capital curve is vertical and the demand for capital curve is downward sloping. 
E) None of the above answers is correct. 
A) The demand for capital curve is upward sloping and the supply of capital curve is downward sloping. 
B) The supply of capital is perfectly elastic. 
C) The supply of capital curve is upward sloping and the demand for capital curve is downward sloping. 
D) The supply of capital curve is vertical and the demand for capital curve is downward sloping. 
E) None of the above answers is correct.

Question 18

The price of capital falls.Assuming that the firm does not increase the quantity it produces, in the long run the firm's demand for labor curve

Accepted Answer

A) does not shift, and there is no movement along it. 
B) shifts leftward. 
C) shifts rightward only if the elasticity of demand for labor is elastic. 
D) does not shift, but there is a movement along it. 
E) shifts rightward only if the elasticity of demand for labor is inelastic. 
A) does not shift, and there is no movement along it. 
B) shifts leftward. 
C) shifts rightward only if the elasticity of demand for labor is elastic. 
D) does not shift, but there is a movement along it. 
E) shifts rightward only if the elasticity of demand for labor is inelastic.

Question 19

The demand for labor is derived from the

Accepted Answer

A) supply of labor. 
B) wage rate. 
C) supply of the good the labor is used to produce. 
D) demand for the goods and services the labor helps produce. 
E) supply of all the other factors of production that can be substituted for labor. 
A) supply of labor. 
B) wage rate. 
C) supply of the good the labor is used to produce. 
D) demand for the goods and services the labor helps produce. 
E) supply of all the other factors of production that can be substituted for labor.

Question 20

The figure above shows a labor market in which a union has formed
-Labor unions' support for import restrictions represents an attempt to shift the

Accepted Answer

A) labor demand curve from LD₀ to LD₁. 
B) labor demand curve from LD₁ to LD₀. 
C) labor supply curve from LS₀ to LS₁. 
D) labor supply curve from LS₁ to LS₀. 
E) None of the above answers is correct. 
A) labor demand curve from LD₀ to LD₁. 
B) labor demand curve from LD₁ to LD₀. 
C) labor supply curve from LS₀ to LS₁. 
D) labor supply curve from LS₁ to LS₀. 
E) None of the above answers is correct.

How does an increase in the adult population affect the labor market?

The total output of candles in Nick's Wicks candle shop increases from 20 per hour to 30 per hour as he hires the second worker.The price of each candle is $2.The

The price of an nonrenewable resource is expected to rise at a rate equal to the

The figure above shows a firm's VMP curve. -Suppose that the price of the product rises.As a result,

Of the following, a union is LEAST likely to support

The supply of nonrenewable natural resources is

Which of the following is a correct statement of the relationship between advances in technology and the demand for labor?

The figure above shows a labor market in which a union has formed -Labor unions' support for programs that increase their members' marginal products represents an attempt to shift the

An increase in the rental rate of capital the quantity of capital demanded and the quantity of capital supplied.

Why do baseball players make so much money, while kindergarten teachers in private schools make so much less? In your answer, discuss the value of marginal product and the actions of profit-maximizing firms.

Which rule does the United Corporation use when maximizing profit?

The supply of labor curve shifts leftward if

The demand for a factor of production is called a derived demand because it is derived from

What is the effect on the supply of low-skilled labor of an increase in the number of people pursuing higher education?

If the demand for a good increases, the demand for the factors used to produce the good

Why does an increase in the minimum wage increase the demand for union labor?

Which of the following is true about the market for capital?

The price of capital falls.Assuming that the firm does not increase the quantity it produces, in the long run the firm's demand for labor curve

The demand for labor is derived from the

The figure above shows a labor market in which a union has formed -Labor unions' support for import restrictions represents an attempt to shift the

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

How does an increase in the adult population affect the labor market?

The total output of candles in Nick's Wicks candle shop increases from 20 per hour to 30 per hour as he hires the second worker.The price of each candle is $2.The

The price of an nonrenewable resource is expected to rise at a rate equal to the

The figure above shows a firm's VMP curve. -Suppose that the price of the product rises.As a result,

Of the following, a union is LEAST likely to support

The supply of nonrenewable natural resources is

Which of the following is a correct statement of the relationship between advances in technology and the demand for labor?

The figure above shows a labor market in which a union has formed -Labor unions' support for programs that increase their members' marginal products represents an attempt to shift the

An increase in the rental rate of capital ________ the quantity of capital demanded and ________ the quantity of capital supplied.

Why do baseball players make so much money, while kindergarten teachers in private schools make so much less? In your answer, discuss the value of marginal product and the actions of profit-maximizing firms.

Which rule does the United Corporation use when maximizing profit?

The supply of labor curve shifts leftward if

The demand for a factor of production is called a derived demand because it is derived from

What is the effect on the supply of low-skilled labor of an increase in the number of people pursuing higher education?

If the demand for a good increases, the demand for the factors used to produce the good

Why does an increase in the minimum wage increase the demand for union labor?

Which of the following is true about the market for capital?

The price of capital falls.Assuming that the firm does not increase the quantity it produces, in the long run the firm's demand for labor curve

The demand for labor is derived from the

The figure above shows a labor market in which a union has formed -Labor unions' support for import restrictions represents an attempt to shift the

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

An increase in the rental rate of capital the quantity of capital demanded and the quantity of capital supplied.