Question 1

A monopsony will hire another worker if the

Accepted Answer

A)  marginal cost of labor exceeds the value of marginal product. 
B)  marginal cost of labor is less than the value of marginal product. 
C)  marginal cost of labor is less than the wage rate. 
D)  wage rate exceeds the value of marginal product. 
A)  marginal cost of labor exceeds the value of marginal product. 
B)  marginal cost of labor is less than the value of marginal product. 
C)  marginal cost of labor is less than the wage rate. 
D)  wage rate exceeds the value of marginal product.

Question 2

A monopsony maximizes its profit by hiring the level of employment that sets

Accepted Answer

A)  labor supply equal to labor demand. 
B)  the value of marginal product equal to the wage. 
C)  the value of marginal product equal to the marginal cost of labor. 
D)  the value of marginal product equal to the demand for labor. 
A)  labor supply equal to labor demand. 
B)  the value of marginal product equal to the wage. 
C)  the value of marginal product equal to the marginal cost of labor. 
D)  the value of marginal product equal to the demand for labor.

Question 3

"In order for Charlie Trotter's, an upscale restaurant in Chicago, to maximize profit from the employment of chefs, the restaurant should hire chefs up to the point where the value of marginal product equals the wage rate for chefs." Is the statement correct or incorrect?

Accepted Answer

The statement is correct. In o

Question 4

-The market supply of labor curve has a positive slope if higher wages induce households to choose

Accepted Answer

A)  leisure rather than supplying labor in the labor market. 
B)  supplying labor in the labor market rather than leisure. 
C)  demanding labor rather than supplying it. 
D)  None of the above answers is correct. 
A)  leisure rather than supplying labor in the labor market. 
B)  supplying labor in the labor market rather than leisure. 
C)  demanding labor rather than supplying it. 
D)  None of the above answers is correct.

Question 5

When the ________ effect dominates the ________ effect, the labor supply curve is ________.

Accepted Answer

A)  income; substitution; vertical 
B)  substitution; income; positively sloped 
C)  income; substitution; negatively sloped 
D)  substitution; income; horizontal 
A)  income; substitution; vertical 
B)  substitution; income; positively sloped 
C)  income; substitution; negatively sloped 
D)  substitution; income; horizontal

Question 6

-The above figure shows the market for labor. The employer is a monopsony. If a minimum wage of $10 is imposed, the equilibrium level of employment is

Accepted Answer

A)  200 hours per day. 
B)  400 hours per day. 
C)  600 hours per day. 
D)  800 hours per day. 
A)  200 hours per day. 
B)  400 hours per day. 
C)  600 hours per day. 
D)  800 hours per day.

Question 7

-Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $4, what is the value of marginal product of the 4th worker?

Accepted Answer

A)  $240 
B)  $70 
C)  $10 
D)  $40 
A)  $240 
B)  $70 
C)  $10 
D)  $40

Question 8

A firm's value of marginal product of labor curve

Accepted Answer

A)  is flatter than its demand for labor curve. 
B)  is steeper than its demand for labor curve. 
C)  is its demand for labor curve. 
D)  bends backward. 
A)  is flatter than its demand for labor curve. 
B)  is steeper than its demand for labor curve. 
C)  is its demand for labor curve. 
D)  bends backward.

Question 9

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 10

In a labor market, employment

Accepted Answer

A)  and the wage rate are higher when the market is a monopsony than when the market is competitive. 
B)  is higher and the wage rate is lower when the market is a monopsony than when the market is competitive. 
C)  is lower and the wage rate is higher when the market is a monopsony than when the market is competitive. 
D)  and the wage rate are lower when the market is a monopsony than when the market is competitive. 
A)  and the wage rate are higher when the market is a monopsony than when the market is competitive. 
B)  is higher and the wage rate is lower when the market is a monopsony than when the market is competitive. 
C)  is lower and the wage rate is higher when the market is a monopsony than when the market is competitive. 
D)  and the wage rate are lower when the market is a monopsony than when the market is competitive.

Question 11

-The above table has the total product schedule for Joe's Barber Shop. Joe charges $6 per haircut. If the wage rate is $24 per worker, what quantity of labor will maximize profits?

Accepted Answer

A)  1 worker 
B)  2 workers 
C)  4 workers 
D)  5 workers 
A)  1 worker 
B)  2 workers 
C)  4 workers 
D)  5 workers

Question 12

-In the table above, the marginal product of the first unit of labor is ________ units of output.

Accepted Answer

A)  4 
B)  5 
C)  16 
D)  20 
A)  4 
B)  5 
C)  16 
D)  20

Question 13

-The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. If the wage rate rises from $100 per day to $200 per day, the firm's demand for labor curve

Accepted Answer

A)  shifts leftward. 
B)  shifts rightward. 
C)  does not shift at all, but the firm moves upward along the curve. 
D)  None of the above because this change shifts the supply of labor curve. 
A)  shifts leftward. 
B)  shifts rightward. 
C)  does not shift at all, but the firm moves upward along the curve. 
D)  None of the above because this change shifts the supply of labor curve.

Question 14

The value of marginal product of labor is the change in

Accepted Answer

A)  profit from hiring one more worker. 
B)  output from hiring one more worker. 
C)  total revenue from hiring one more worker. 
D)  profit from producing one more unit of output. 
A)  profit from hiring one more worker. 
B)  output from hiring one more worker. 
C)  total revenue from hiring one more worker. 
D)  profit from producing one more unit of output.

Question 15

-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. A worker costs $1,200 per month. How many workers does Peter hire to maximize his profit?

Accepted Answer

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

Question 16

-In the above figure, the competitive wage rate is ________ and the quantity of labor is ________.

Accepted Answer

A)  $7.00; 150 hours 
B)  $8.00; 200 hours 
C)  $6.00; 100 hours 
D)  $8.00; 100 hours 
A)  $7.00; 150 hours 
B)  $8.00; 200 hours 
C)  $6.00; 100 hours 
D)  $8.00; 100 hours

Question 17

-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. On the last naturalist hired, Pointy Stone State Park will earn a profit of

Accepted Answer

A)  zero. 
B)  $100 per week. 
C)  $150 per week. 
D)  $200 per week. 
A)  zero. 
B)  $100 per week. 
C)  $150 per week. 
D)  $200 per week.

Question 18

Intel hired a consultant who found that the value of marginal product of Intel's workers decreased as more workers were hired. Suppose Intel is a monopolistically competitive firm. Then the value of marginal product decreases because the I. workers' marginal product of labor decreased as more workers were hired.
II) marginal revenue of Intel's chips decreased as more chips were sold.

Accepted Answer

A)  I only 
B)  II only 
C)  Both I and II 
D)  Neither I nor II 
A)  I only 
B)  II only 
C)  Both I and II 
D)  Neither I nor II

Question 19

If a firm finds that the wage rate (W) is less than the value of marginal product (VMP), then to maximize its profit the firm should hire

Accepted Answer

A)  less labor, which will increase the VMP. 
B)  more labor, which will decrease the VMP. 
C)  no more or less labor, because profits are greatest when W < VMP. 
D)  more labor, because hiring more labor will increase both W and VMP until they are equal. 
A)  less labor, which will increase the VMP. 
B)  more labor, which will decrease the VMP. 
C)  no more or less labor, because profits are greatest when W < VMP. 
D)  more labor, because hiring more labor will increase both W and VMP until they are equal.

Question 20

The present value of $100 to be received in the year 2014 is

Accepted Answer

A)  less than the present value of $100 to be received in 2015. 
B)  greater than the present value of $100 to be received in 2015. 
C)  the same as the present value of $100 to be received in 2015. 
D)  greater than the present value of $100 to be received in 2015 if the interest rate in 2015 exceeds the interest rate in 2014; otherwise, it is less. 
A)  less than the present value of $100 to be received in 2015. 
B)  greater than the present value of $100 to be received in 2015. 
C)  the same as the present value of $100 to be received in 2015. 
D)  greater than the present value of $100 to be received in 2015 if the interest rate in 2015 exceeds the interest rate in 2014; otherwise, it is less.

A monopsony will hire another worker if the

A monopsony maximizes its profit by hiring the level of employment that sets

"In order for Charlie Trotter's, an upscale restaurant in Chicago, to maximize profit from the employment of chefs, the restaurant should hire chefs up to the point where the value of marginal product equals the wage rate for chefs." Is the statement correct or incorrect?

-The market supply of labor curve has a positive slope if higher wages induce households to choose

When the effect dominates the effect, the labor supply curve is .

-The above figure shows the market for labor. The employer is a monopsony. If a minimum wage of $10 is imposed, the equilibrium level of employment is

-Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $4, what is the value of marginal product of the 4th worker?

A firm's value of marginal product of labor curve

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

In a labor market, employment

-The above table has the total product schedule for Joe's Barber Shop. Joe charges $6 per haircut. If the wage rate is $24 per worker, what quantity of labor will maximize profits?

-In the table above, the marginal product of the first unit of labor is ________ units of output.

-The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. If the wage rate rises from $100 per day to $200 per day, the firm's demand for labor curve

The value of marginal product of labor is the change in

-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. A worker costs $1,200 per month. How many workers does Peter hire to maximize his profit?

-In the above figure, the competitive wage rate is and the quantity of labor 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. On the last naturalist hired, Pointy Stone State Park will earn a profit of

If a firm finds that the wage rate (W) is less than the value of marginal product (VMP), then to maximize its profit the firm should hire

The present value of $100 to be received in the year 2014 is

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 monopsony will hire another worker if the

A monopsony maximizes its profit by hiring the level of employment that sets

"In order for Charlie Trotter's, an upscale restaurant in Chicago, to maximize profit from the employment of chefs, the restaurant should hire chefs up to the point where the value of marginal product equals the wage rate for chefs." Is the statement correct or incorrect?

-The market supply of labor curve has a positive slope if higher wages induce households to choose

When the ________ effect dominates the ________ effect, the labor supply curve is ________.

-The above figure shows the market for labor. The employer is a monopsony. If a minimum wage of $10 is imposed, the equilibrium level of employment is

-Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $4, what is the value of marginal product of the 4th worker?

A firm's value of marginal product of labor curve

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

In a labor market, employment

-The above table has the total product schedule for Joe's Barber Shop. Joe charges $6 per haircut. If the wage rate is $24 per worker, what quantity of labor will maximize profits?

-In the table above, the marginal product of the first unit of labor is ________ units of output.

-The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. If the wage rate rises from $100 per day to $200 per day, the firm's demand for labor curve

The value of marginal product of labor is the change in

-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. A worker costs $1,200 per month. How many workers does Peter hire to maximize his profit?

-In the above figure, the competitive wage rate is ________ and the quantity of labor 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. On the last naturalist hired, Pointy Stone State Park will earn a profit of

If a firm finds that the wage rate (W) is less than the value of marginal product (VMP), then to maximize its profit the firm should hire

The present value of $100 to be received in the year 2014 is

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

When the effect dominates the effect, the labor supply curve is .

-In the above figure, the competitive wage rate is and the quantity of labor is .