Question 1

A firm's demand for labor increases and its demand curve for labor shifts rightward if

Accepted Answer

A)  the wage rate falls. 
B)  the price of its product falls. 
C)  its value of marginal product decreases. 
D)  an advance in technology increases the marginal product of labor. 
A)  the wage rate falls. 
B)  the price of its product falls. 
C)  its value of marginal product decreases. 
D)  an advance in technology increases the marginal product of labor.

Question 2

If the interest rate is 7.5 percent, the present value of $500 to be received three years from today is $477.50.

Accepted Answer

A) True 
 B)False

Question 3

If a union is able to decrease the supply of workers in a competitive labor market but the union cannot affect the demand for its members' labor, then

Accepted Answer

A)  wages and the quantity of labor hired will both increase. 
B)  wages will increase but the quantity of labor hired will decrease. 
C)  wages will decrease but the quantity of labor hired will increase. 
D)  wages and the quantity of labor hired will both decrease. 
A)  wages and the quantity of labor hired will both increase. 
B)  wages will increase but the quantity of labor hired will decrease. 
C)  wages will decrease but the quantity of labor hired will increase. 
D)  wages and the quantity of labor hired will both decrease.

Question 4

Which of the following groups lists the four factors of production?

Accepted Answer

A)  labor, capital, land, entrepreneurship 
B)  labor, capital, land, money 
C)  labor, money, land, entrepreneurship 
D)  labor, capital, money, entrepreneurship 
A)  labor, capital, land, entrepreneurship 
B)  labor, capital, land, money 
C)  labor, money, land, entrepreneurship 
D)  labor, capital, money, entrepreneurship

Question 5

If a union cannot increase the demand for union labor, then an increase in union wages will result in a decrease in union employment.

Accepted Answer

A) True 
 B)False

Question 6

-The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. Initially the market price of peanuts is $2.00 per pound. If the market price of peanuts fall to $1 per pound and a worker costs $800 per month, how many workers will Peter employ to maximize his profit?

Accepted Answer

A)  zero 
B)  two 
C)  three 
D)  four 
A)  zero 
B)  two 
C)  three 
D)  four

Question 7

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

Accepted Answer

The demand for labor arises because we n

Question 8

The value of marginal product equals ________ multiplied by ________.

Accepted Answer

A)  the good's market price; marginal cost 
B)  the good's market price; marginal product 
C)  marginal cost; marginal product 
D)  marginal revenue; total product 
A)  the good's market price; marginal cost 
B)  the good's market price; marginal product 
C)  marginal cost; marginal product 
D)  marginal revenue; total product

Question 9

-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. What weekly wage will Pointy Stone State Park pay naturalists?

Accepted Answer

A)  $550 per week 
B)  $500 per week 
C)  $450 per week 
D)  $400 per week 
A)  $550 per week 
B)  $500 per week 
C)  $450 per week 
D)  $400 per week

Question 10

-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 value of marginal product from employing the third worker?

Accepted Answer

A)  $800 
B)  $1,200 
C)  $2,000 
D)  $4,800 
A)  $800 
B)  $1,200 
C)  $2,000 
D)  $4,800

Question 11

The ________ effect means that, other things remaining the same, the higher the wage rate, the less time people will spend working and the more time people will spend at leisure.

Accepted Answer

A)  price 
B)  labor 
C)  income 
D)  substitution 
A)  price 
B)  labor 
C)  income 
D)  substitution

Question 12

In which of the following situations is there most likely to be a monopsony?

Accepted Answer

A)  the market for farm workers in a large rural area 
B)  the market for advertising executives in New York City 
C)  the market for accountants in New York City 
D)  the market for NBA players drafted out of college by one NBA team 
A)  the market for farm workers in a large rural area 
B)  the market for advertising executives in New York City 
C)  the market for accountants in New York City 
D)  the market for NBA players drafted out of college by one NBA team

Question 13

Because of the income effect, the labor supply curve is

Accepted Answer

A)  eventually backward bending as wage rate increases. 
B)  positively sloped. 
C)  horizontal. 
D)  vertical. 
A)  eventually backward bending as wage rate increases. 
B)  positively sloped. 
C)  horizontal. 
D)  vertical.

Question 14

-Consider the monopsony in the above figure. The 200th hour of labor creates how much added revenue per hour for the monopsony?

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 15

-In the table above, the firm producing the product is

Accepted Answer

A)  a monopoly. 
B)  an oligopoly. 
C)  a duopoly. 
D)  perfectly competitive. 
A)  a monopoly. 
B)  an oligopoly. 
C)  a duopoly. 
D)  perfectly competitive.

Question 16

"As the quantity of labor hired increases, the value of marginal product stays constant as long as the wage rate is constant for all workers." Is the previous statement correct or incorrect? Explain your answer.

Accepted Answer

The statement is incorrect. The value of

Question 17

If the interest rate is 20 percent, the present value of $10,000 to be received 20 years from today is about

Accepted Answer

A)  $6,944. 
B)  $14,400. 
C)  $383,376. 
D)  $261. 
A)  $6,944. 
B)  $14,400. 
C)  $383,376. 
D)  $261.

Question 18

The demand for a product produced by a union becomes more elastic. After this change, how does an increase in the wage rate paid its members affect their employment?

Accepted Answer

A)  It does not decrease employment at all. 
B)  It decreases employment by less than it would have before. 
C)  It decreases employment by more than it would have before. 
D)  It increases employment. 
A)  It does not decrease employment at all. 
B)  It decreases employment by less than it would have before. 
C)  It decreases employment by more than it would have before. 
D)  It increases employment.

Question 19

An individual's labor supply curve will have a

Accepted Answer

A)  positive slope if the income effect exceeds the substitution effect. 
B)  negative slope if the substitution effect exceeds the income effect. 
C)  positive slope if the substitution effect exceeds the income effect. 
D)  negative slope regardless of whether the substitution effect or income effect is larger. 
A)  positive slope if the income effect exceeds the substitution effect. 
B)  negative slope if the substitution effect exceeds the income effect. 
C)  positive slope if the substitution effect exceeds the income effect. 
D)  negative slope regardless of whether the substitution effect or income effect is larger.

Question 20

Why does the labor supply curve eventually bend backwards?

Accepted Answer

The wage rate represents the opportunity

A firm's demand for labor increases and its demand curve for labor shifts rightward if

If the interest rate is 7.5 percent, the present value of $500 to be received three years from today is $477.50.

If a union is able to decrease the supply of workers in a competitive labor market but the union cannot affect the demand for its members' labor, then

Which of the following groups lists the four factors of production?

If a union cannot increase the demand for union labor, then an increase in union wages will result in a decrease in union employment.

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

The value of marginal product equals multiplied by .

-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. What weekly wage will Pointy Stone State Park pay naturalists?

-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 value of marginal product from employing the third worker?

The ________ effect means that, other things remaining the same, the higher the wage rate, the less time people will spend working and the more time people will spend at leisure.

In which of the following situations is there most likely to be a monopsony?

Because of the income effect, the labor supply curve is

-Consider the monopsony in the above figure. The 200th hour of labor creates how much added revenue per hour for the monopsony?

-In the table above, the firm producing the product is

"As the quantity of labor hired increases, the value of marginal product stays constant as long as the wage rate is constant for all workers." Is the previous statement correct or incorrect? Explain your answer.

If the interest rate is 20 percent, the present value of $10,000 to be received 20 years from today is about

The demand for a product produced by a union becomes more elastic. After this change, how does an increase in the wage rate paid its members affect their employment?

An individual's labor supply curve will have a

Why does the labor supply curve eventually bend backwards?

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 firm's demand for labor increases and its demand curve for labor shifts rightward if

If the interest rate is 7.5 percent, the present value of $500 to be received three years from today is $477.50.

If a union is able to decrease the supply of workers in a competitive labor market but the union cannot affect the demand for its members' labor, then

Which of the following groups lists the four factors of production?

If a union cannot increase the demand for union labor, then an increase in union wages will result in a decrease in union employment.

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

The value of marginal product equals ________ multiplied by ________.

-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. What weekly wage will Pointy Stone State Park pay naturalists?

-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 value of marginal product from employing the third worker?

The ________ effect means that, other things remaining the same, the higher the wage rate, the less time people will spend working and the more time people will spend at leisure.

In which of the following situations is there most likely to be a monopsony?

Because of the income effect, the labor supply curve is

-Consider the monopsony in the above figure. The 200th hour of labor creates how much added revenue per hour for the monopsony?

-In the table above, the firm producing the product is

"As the quantity of labor hired increases, the value of marginal product stays constant as long as the wage rate is constant for all workers." Is the previous statement correct or incorrect? Explain your answer.

If the interest rate is 20 percent, the present value of $10,000 to be received 20 years from today is about

The demand for a product produced by a union becomes more elastic. After this change, how does an increase in the wage rate paid its members affect their employment?

An individual's labor supply curve will have a

Why does the labor supply curve eventually bend backwards?

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 value of marginal product equals multiplied by .