Question 1

A fall in the price of a firm's output

Accepted Answer

A)  decreases the firm's demand for labor. 
B)  increases the firm's demand for labor. 
C)  decreases the firm's supply of labor. 
D)  increases the firm's supply of labor. 
A)  decreases the firm's demand for labor. 
B)  increases the firm's demand for labor. 
C)  decreases the firm's supply of labor. 
D)  increases the firm's supply of labor.

Question 2

-The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. The market price of peanuts is $2.00 per pound. What is the marginal product from employing the fourth worker?

Accepted Answer

A)  7 pounds of peanuts 
B)  100 pounds of peanuts 
C)  400 pounds of peanuts 
D)  2,800 pounds of peanuts 
A)  7 pounds of peanuts 
B)  100 pounds of peanuts 
C)  400 pounds of peanuts 
D)  2,800 pounds of peanuts

Question 3

The hourly wage rate is the opportunity cost of one hour of leisure because

Accepted Answer

A)  the person's substitution effect exceeds his or her income effect. 
B)  that is what a person gives up to enjoy the hour of leisure time. 
C)  the person must work for a living. 
D)  the person prefers leisure to work regardless of the wage. 
A)  the person's substitution effect exceeds his or her income effect. 
B)  that is what a person gives up to enjoy the hour of leisure time. 
C)  the person must work for a living. 
D)  the person prefers leisure to work regardless of the wage.

Question 4

If the interest rate is 10 percent, the present value of $400 to be received two years from today is about

Accepted Answer

A)  $331. 
B)  $484. 
C)  $364. 
D)  $440. 
A)  $331. 
B)  $484. 
C)  $364. 
D)  $440.

Question 5

-The figure above shows the labor demand and labor supply curves for workers in local fast-food restaurants. The fast-food restaurant industry is competitive. A decrease in the supply of labor shifts the labor supply curve from LS0 to LS1. The wages of fast-food workers ________.

Accepted Answer

A)  decrease by $4 per hour 
B)  decrease by $10 per hour 
C)  increase by $4 per hour 
D)  remain the same 
A)  decrease by $4 per hour 
B)  decrease by $10 per hour 
C)  increase by $4 per hour 
D)  remain the same

Question 6

What is the value of marginal product of labor? What is the formula that can be used to calculate it? How does the value of marginal product affect how much labor a firm hires?

Accepted Answer

The value of marginal product of labor t

Question 7

-The above figure represents the market for teenage workers at fast-food restaurants in Kansas City.
a) What is the equilibrium wage rate and employment?
b) Describe the market at a wage rate of $6 per hour.
c) Describe the market at a wage rate of $12 an hour.
d) How would an increase in the number of young, married college graduates, who tend to eat at fast-food restaurants, affect the figure, the equilibrium wage rate, and employment?

Accepted Answer

a) The equilibrium wage rate is $8 an ho

Question 8

If a firm finds that, at its current level of employment, VMP < W, then it has

Accepted Answer

A)  reached maximum profits. 
B)  reached minimum profits. 
C)  not hired enough labor to maximize its profit. 
D)  hired too much labor to maximize its profit. 
A)  reached maximum profits. 
B)  reached minimum profits. 
C)  not hired enough labor to maximize its profit. 
D)  hired too much labor to maximize its profit.

Question 9

A firm's demand for labor curve

Accepted Answer

A)  is the same as its value of marginal product curve. 
B)  is steeper than its value of marginal product curve. 
C)  is flatter than its value of marginal product curve. 
D)  intersects its value of marginal product curve at the profit-maximizing quantity of employment. 
A)  is the same as its value of marginal product curve. 
B)  is steeper than its value of marginal product curve. 
C)  is flatter than its value of marginal product curve. 
D)  intersects its value of marginal product curve at the profit-maximizing quantity of employment.

Question 10

The present value of a stream of future revenues varies ________ with the future revenues and ________ with the interest rate.

Accepted Answer

A)  inversely; inversely 
B)  directly; directly 
C)  inversely; directly 
D)  directly; inversely 
A)  inversely; inversely 
B)  directly; directly 
C)  inversely; directly 
D)  directly; inversely

Question 11

An example of a bilateral monopoly would be when a union

Accepted Answer

A)  bargains with many different employers. 
B)  deals directly with the final consumers. 
C)  bargains with a monopoly. 
D)  bargains with a monopsony. 
A)  bargains with many different employers. 
B)  deals directly with the final consumers. 
C)  bargains with a monopoly. 
D)  bargains with a monopsony.

Question 12

The value of an additional baker to a bakery is equal to the

Accepted Answer

A)  price of bread. 
B)  value of marginal product of the baker. 
C)  baker's marginal productivity in terms of loaves of bread. 
D)  marginal cost of making an additional loaf of bread. 
A)  price of bread. 
B)  value of marginal product of the baker. 
C)  baker's marginal productivity in terms of loaves of bread. 
D)  marginal cost of making an additional loaf of bread.

Question 13

Water from the Mississippi river is an example of

Accepted Answer

A)  a nonrenewable natural resource. 
B)  a renewable natural resource. 
C)  capital. 
D)  a static resource. 
A)  a nonrenewable natural resource. 
B)  a renewable natural resource. 
C)  capital. 
D)  a static resource.

Question 14

-The figure above shows a labor market. If this labor market is perfectly competitive, employment is

Accepted Answer

A)  0 hours per week. 
B)  50 hours per week. 
C)  100 hours per week. 
D)  150 hours per week. 
A)  0 hours per week. 
B)  50 hours per week. 
C)  100 hours per week. 
D)  150 hours per week.

Question 15

Next year's expected price of oil is $90 per barrel. If the interest rate climbs from 5 percent to 20 percent per year and nothing else changes, then according to the Hotelling Principle the price of oil this year

Accepted Answer

A)  will rise. 
B)  will fall. 
C)  will not change. 
D)  could rise, fall, or stay the same. 
A)  will rise. 
B)  will fall. 
C)  will not change. 
D)  could rise, fall, or stay the same.

Question 16

Which of the following activities increases the demand for union labor?

Accepted Answer

A)  a decrease in the minimum wage 
B)  an increase in immigration 
C)  additional job training for union members 
D)  an increased desire by consumers to buy imports 
A)  a decrease in the minimum wage 
B)  an increase in immigration 
C)  additional job training for union members 
D)  an increased desire by consumers to buy imports

Question 17

-The figure above shows a labor market. If there is a monopsony in this labor market, then increasing the minimum wage from $3 per hour to $5 per hour

Accepted Answer

A)  will increase the quantity of labor employed. 
B)  will leave unchanged the quantity of labor employed. 
C)  will decrease the quantity of labor employed. 
D)  could increase, decrease, or leave unchanged the quantity of labor employed. 
A)  will increase the quantity of labor employed. 
B)  will leave unchanged the quantity of labor employed. 
C)  will decrease the quantity of labor employed. 
D)  could increase, decrease, or leave unchanged the quantity of labor employed.

Question 18

________ natural resources are natural resources that can be used repeatedly, and ________ natural resources are natural resources that can be used only once.

Accepted Answer

A)  Nonrenewable; renewable 
B)  Renewable; hydrocarbon 
C)  Renewable; nonrenewable 
D)  Non-fossil; fossil 
A)  Nonrenewable; renewable 
B)  Renewable; hydrocarbon 
C)  Renewable; nonrenewable 
D)  Non-fossil; fossil

Question 19

Why does a monopsony increase employment when faced with an effective minimum wage law?

Accepted Answer

A monopsony hires the quantity of labor

Question 20

"The decision to employ an additional unit of labor depends on whether the value of marginal product is greater than or smaller than the wage rate." Is the previous statement correct or incorrect?

Accepted Answer

The statement is correct. If t

A fall in the price of a firm's output

-The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. The market price of peanuts is $2.00 per pound. What is the marginal product from employing the fourth worker?

The hourly wage rate is the opportunity cost of one hour of leisure because

If the interest rate is 10 percent, the present value of $400 to be received two years from today is about

-The figure above shows the labor demand and labor supply curves for workers in local fast-food restaurants. The fast-food restaurant industry is competitive. A decrease in the supply of labor shifts the labor supply curve from LS₀ to LS₁. The wages of fast-food workers ________.

What is the value of marginal product of labor? What is the formula that can be used to calculate it? How does the value of marginal product affect how much labor a firm hires?

If a firm finds that, at its current level of employment, VMP < W, then it has

A firm's demand for labor curve

The present value of a stream of future revenues varies with the future revenues and with the interest rate.

An example of a bilateral monopoly would be when a union

The value of an additional baker to a bakery is equal to the

Water from the Mississippi river is an example of

-The figure above shows a labor market. If this labor market is perfectly competitive, employment is

Next year's expected price of oil is $90 per barrel. If the interest rate climbs from 5 percent to 20 percent per year and nothing else changes, then according to the Hotelling Principle the price of oil this year

Which of the following activities increases the demand for union labor?

-The figure above shows a labor market. If there is a monopsony in this labor market, then increasing the minimum wage from $3 per hour to $5 per hour

natural resources are natural resources that can be used repeatedly, and natural resources are natural resources that can be used only once.

Why does a monopsony increase employment when faced with an effective minimum wage law?

"The decision to employ an additional unit of labor depends on whether the value of marginal product is greater than or smaller than the wage rate." Is the previous statement correct or incorrect?

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

A fall in the price of a firm's output

-The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. The market price of peanuts is $2.00 per pound. What is the marginal product from employing the fourth worker?

The hourly wage rate is the opportunity cost of one hour of leisure because

If the interest rate is 10 percent, the present value of $400 to be received two years from today is about

-The figure above shows the labor demand and labor supply curves for workers in local fast-food restaurants. The fast-food restaurant industry is competitive. A decrease in the supply of labor shifts the labor supply curve from LS0 to LS1. The wages of fast-food workers ________.

What is the value of marginal product of labor? What is the formula that can be used to calculate it? How does the value of marginal product affect how much labor a firm hires?

If a firm finds that, at its current level of employment, VMP < W, then it has

A firm's demand for labor curve

The present value of a stream of future revenues varies ________ with the future revenues and ________ with the interest rate.

An example of a bilateral monopoly would be when a union

The value of an additional baker to a bakery is equal to the

Water from the Mississippi river is an example of

-The figure above shows a labor market. If this labor market is perfectly competitive, employment is

Next year's expected price of oil is $90 per barrel. If the interest rate climbs from 5 percent to 20 percent per year and nothing else changes, then according to the Hotelling Principle the price of oil this year

Which of the following activities increases the demand for union labor?

-The figure above shows a labor market. If there is a monopsony in this labor market, then increasing the minimum wage from $3 per hour to $5 per hour

________ natural resources are natural resources that can be used repeatedly, and ________ natural resources are natural resources that can be used only once.

Why does a monopsony increase employment when faced with an effective minimum wage law?

"The decision to employ an additional unit of labor depends on whether the value of marginal product is greater than or smaller than the wage rate." Is the previous statement correct or incorrect?

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 figure above shows the labor demand and labor supply curves for workers in local fast-food restaurants. The fast-food restaurant industry is competitive. A decrease in the supply of labor shifts the labor supply curve from LS₀ to LS₁. The wages of fast-food workers ________.

The present value of a stream of future revenues varies with the future revenues and with the interest rate.

natural resources are natural resources that can be used repeatedly, and natural resources are natural resources that can be used only once.