Question 1

At an interest rate of 5 percent, the present value of $1,000 to be received two years from today is

Accepted Answer

A)  less than $875. 
B)  between $875 and $925. 
C)  between $925 and $975. 
D)  more than $975. 
A)  less than $875. 
B)  between $875 and $925. 
C)  between $925 and $975. 
D)  more than $975.

Question 2

What is the Hotelling Principle? Have resource prices behaved as the principle predicts?

Accepted Answer

The Hotelling Principle states that the

Question 3

-In the figure above, the segment of the curve showing where the income effect outweighs the substitution effect is

Accepted Answer

A)  0a. 
B)  bd. 
C)  0c. 
D)  cd. 
A)  0a. 
B)  bd. 
C)  0c. 
D)  cd.

Question 4

-The table above gives information about the labor market in Lantis, a community in which the labor market is perfectly competitive. If the demand for labor decreases by 200 hours per day, the equilibrium wage rate falls to ________ an hour and the quantity of labor employed ________ hours per day.

Accepted Answer

A)  $10; remains at 400 
B)  $10; decreases to 300 
C)  $20; increases to 400 
D)  $5; remains at 200 
A)  $10; remains at 400 
B)  $10; decreases to 300 
C)  $20; increases to 400 
D)  $5; remains at 200

Question 5

In order for there to be a backward-bending supply of labor curve, it must be the case that

Accepted Answer

A)  at low wage rates, the income effect of a wage increase exceeds the substitution effect, but at high wage rates the substitution effect of a wage increase exceeds the income effect. 
B)  at low wage rates, the substitution effect of a wage increase exceeds the income effect, but at high wage rates the income effect of a wage increase exceeds the substitution effect. 
C)  the income effect of a wage increase exceeds the substitution effect at all wage rates. 
D)  the substitution effect of a wage increase exceeds the income effect at all wage rates. 
A)  at low wage rates, the income effect of a wage increase exceeds the substitution effect, but at high wage rates the substitution effect of a wage increase exceeds the income effect. 
B)  at low wage rates, the substitution effect of a wage increase exceeds the income effect, but at high wage rates the income effect of a wage increase exceeds the substitution effect. 
C)  the income effect of a wage increase exceeds the substitution effect at all wage rates. 
D)  the substitution effect of a wage increase exceeds the income effect at all wage rates.

Question 6

-The above table has the marginal product schedule for a firm. If the firm is a perfect competitor and the price of the product is constant at $2 a unit, complete the table. If the wage rate is $8 an hour, how many workers does the firm hire?

Accepted Answer

@#IMG-DLM& If the wage rate is $8 an hou

Question 7

Consider the demand for labor in the computer chip industry. The demand for labor

Accepted Answer

A)  is derived from the demand for computer chips. 
B)  is shown by a perfectly elastic demand for labor. 
C)  is shown by a perfectly inelastic demand for labor. 
D)  has a demand curve that is backward bending. 
A)  is derived from the demand for computer chips. 
B)  is shown by a perfectly elastic demand for labor. 
C)  is shown by a perfectly inelastic demand for labor. 
D)  has a demand curve that is backward bending.

Question 8

The firm's demand for labor is derived directly from ________.

Accepted Answer

A)  the wage rate 
B)  the supply of labor 
C)  labor's cost 
D)  labor's value of marginal product 
A)  the wage rate 
B)  the supply of labor 
C)  labor's cost 
D)  labor's value of marginal product

Question 9

-Doug's Dog Grooming is a perfectly competitive firm charging $5 per dog grooming. Doug's Dog Grooming has the total and marginal product of labor schedules in the above table and can hire workers from a perfectly competitive labor market for $15 per hour. The profit-maximizing level of employment for Doug's Dog Grooming is

Accepted Answer

A)  1 worker. 
B)  2 workers. 
C)  4 workers. 
D)  6 workers. 
A)  1 worker. 
B)  2 workers. 
C)  4 workers. 
D)  6 workers.

Question 10

-Which of the following will increase the wage rate?

Accepted Answer

A)  an increase in the adult population 
B)  an increase in the retirement age 
C)  an improvement in technology that increases the marginal product of labor 
D)  Both answers A and B are correct. 
A)  an increase in the adult population 
B)  an increase in the retirement age 
C)  an improvement in technology that increases the marginal product of labor 
D)  Both answers A and B are correct.

Question 11

As the wage rate rises, the income effect influences workers to choose ________ leisure, and the substitution effect influences workers to choose ________ leisure.

Accepted Answer

A)  more; less 
B)  more; more 
C)  less; less 
D)  less; more 
A)  more; less 
B)  more; more 
C)  less; less 
D)  less; more

Question 12

A market structure in which there is only one buyer is

Accepted Answer

A)  a monopoly. 
B)  a monopsony. 
C)  an oligopoly. 
D)  a competitive market. 
A)  a monopoly. 
B)  a monopsony. 
C)  an oligopoly. 
D)  a competitive market.

Question 13

-Pointy Stone State Park is the sole employer of naturalists in the area. The table above provides information about the supply of naturalists and the value of marginal product of labor for naturalists. How many naturalists will Pointy Stone State Park hire?

Accepted Answer

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

Question 14

-The figure above shows a labor market. If there is a monopsony in this labor market, the monopsony pays a wage rate

Accepted Answer

A)  greater than the value of marginal product of labor. 
B)  equal to the value of marginal product of labor. 
C)  less than the value of marginal product of labor. 
D)  equal to the average revenue product of labor. 
A)  greater than the value of marginal product of labor. 
B)  equal to the value of marginal product of labor. 
C)  less than the value of marginal product of labor. 
D)  equal to the average revenue product of labor.

Question 15

In November 2008, the air traffic controllers who work at Guam became unionized. What would NOT be a way for the union to influence labor demand?

Accepted Answer

A)  Have monthly training which improves the marginal productivity of the air traffic controllers. 
B)  Support minimum wage laws. 
C)  Creating job certification which limits the number of newly certified air traffic controllers. 
D)  Lobby the government to limit who can apply to be an air traffic controller in Guam to those who are certified through the union. 
A)  Have monthly training which improves the marginal productivity of the air traffic controllers. 
B)  Support minimum wage laws. 
C)  Creating job certification which limits the number of newly certified air traffic controllers. 
D)  Lobby the government to limit who can apply to be an air traffic controller in Guam to those who are certified through the union.

Question 16

-Consider the labor market depicted in the above figure. What wage rate must be paid to have the 200th hour of labor supplied?

Accepted Answer

A)  $10 
B)  $15 
C)  $20 
D)  None of the above answers is correct. 
A)  $10 
B)  $15 
C)  $20 
D)  None of the above answers is correct.

Question 17

Starbucks is considering opening a new store on the Drexel University Campus in Philadelphia. To analyze this decision Starbucks must compare the costs of starting the new store, which will be incurred today, with the profit the store will create in the future. When making this decision, the higher is the interest rate, the ________ is the discounted present value of the profits and the ________ likely Starbucks will be to open the store.

Accepted Answer

A)  higher; more 
B)  higher; less 
C)  lower; more 
D)  lower; less 
A)  higher; more 
B)  higher; less 
C)  lower; more 
D)  lower; less

Question 18

-Pointy Stone State Park is the sole employer of naturalists in the area. The table above provides information about the supply of naturalists and the value of marginal product of labor for naturalists. The marginal cost of labor for the third naturalist is

Accepted Answer

A)  $650. 
B)  $450. 
C)  $350. 
D)  $525. 
A)  $650. 
B)  $450. 
C)  $350. 
D)  $525.

Question 19

Discounting is converting a future amount of money to a present value.

Accepted Answer

A) True 
 B)False

Question 20

Lynn owns Dust Bunnies, a cleaning company. In one week, she is able to clean 9 houses. If she hires an employee, together they are able to clean 15 houses per week. If Lynn charges $100 to clean a house, what is the value of marginal product of her employee?

Accepted Answer

A)  6 houses 
B)  9 houses 
C)  $600 
D)  $900 
A)  6 houses 
B)  9 houses 
C)  $600 
D)  $900

At an interest rate of 5 percent, the present value of $1,000 to be received two years from today is

What is the Hotelling Principle? Have resource prices behaved as the principle predicts?

-In the figure above, the segment of the curve showing where the income effect outweighs the substitution effect is

-The table above gives information about the labor market in Lantis, a community in which the labor market is perfectly competitive. If the demand for labor decreases by 200 hours per day, the equilibrium wage rate falls to an hour and the quantity of labor employed hours per day.

In order for there to be a backward-bending supply of labor curve, it must be the case that

-The above table has the marginal product schedule for a firm. If the firm is a perfect competitor and the price of the product is constant at $2 a unit, complete the table. If the wage rate is $8 an hour, how many workers does the firm hire?

Consider the demand for labor in the computer chip industry. The demand for labor

The firm's demand for labor is derived directly from ________.

-Which of the following will increase the wage rate?

As the wage rate rises, the income effect influences workers to choose leisure, and the substitution effect influences workers to choose leisure.

A market structure in which there is only one buyer is

-Pointy Stone State Park is the sole employer of naturalists in the area. The table above provides information about the supply of naturalists and the value of marginal product of labor for naturalists. How many naturalists will Pointy Stone State Park hire?

-The figure above shows a labor market. If there is a monopsony in this labor market, the monopsony pays a wage rate

In November 2008, the air traffic controllers who work at Guam became unionized. What would NOT be a way for the union to influence labor demand?

-Consider the labor market depicted in the above figure. What wage rate must be paid to have the 200th hour of labor supplied?

-Pointy Stone State Park is the sole employer of naturalists in the area. The table above provides information about the supply of naturalists and the value of marginal product of labor for naturalists. The marginal cost of labor for the third naturalist is

Discounting is converting a future amount of money to a present value.

Lynn owns Dust Bunnies, a cleaning company. In one week, she is able to clean 9 houses. If she hires an employee, together they are able to clean 15 houses per week. If Lynn charges $100 to clean a house, what is the value of marginal product of her employee?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Economic Inequality

Uncertainty and Information

Filters

Exam 18: Markets for Factors of Production

At an interest rate of 5 percent, the present value of $1,000 to be received two years from today is

What is the Hotelling Principle? Have resource prices behaved as the principle predicts?

-In the figure above, the segment of the curve showing where the income effect outweighs the substitution effect is

-The table above gives information about the labor market in Lantis, a community in which the labor market is perfectly competitive. If the demand for labor decreases by 200 hours per day, the equilibrium wage rate falls to ________ an hour and the quantity of labor employed ________ hours per day.

In order for there to be a backward-bending supply of labor curve, it must be the case that

-The above table has the marginal product schedule for a firm. If the firm is a perfect competitor and the price of the product is constant at $2 a unit, complete the table. If the wage rate is $8 an hour, how many workers does the firm hire?

Consider the demand for labor in the computer chip industry. The demand for labor

The firm's demand for labor is derived directly from ________.

-Which of the following will increase the wage rate?

As the wage rate rises, the income effect influences workers to choose ________ leisure, and the substitution effect influences workers to choose ________ leisure.

A market structure in which there is only one buyer is

-Pointy Stone State Park is the sole employer of naturalists in the area. The table above provides information about the supply of naturalists and the value of marginal product of labor for naturalists. How many naturalists will Pointy Stone State Park hire?

-The figure above shows a labor market. If there is a monopsony in this labor market, the monopsony pays a wage rate

In November 2008, the air traffic controllers who work at Guam became unionized. What would NOT be a way for the union to influence labor demand?

-Consider the labor market depicted in the above figure. What wage rate must be paid to have the 200th hour of labor supplied?

-Pointy Stone State Park is the sole employer of naturalists in the area. The table above provides information about the supply of naturalists and the value of marginal product of labor for naturalists. The marginal cost of labor for the third naturalist is

Discounting is converting a future amount of money to a present value.

Lynn owns Dust Bunnies, a cleaning company. In one week, she is able to clean 9 houses. If she hires an employee, together they are able to clean 15 houses per week. If Lynn charges $100 to clean a house, what is the value of marginal product of her employee?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Economic Inequality

Uncertainty and Information

Filters

-The table above gives information about the labor market in Lantis, a community in which the labor market is perfectly competitive. If the demand for labor decreases by 200 hours per day, the equilibrium wage rate falls to an hour and the quantity of labor employed hours per day.

As the wage rate rises, the income effect influences workers to choose leisure, and the substitution effect influences workers to choose leisure.