Question 1

An outward shift in the consumer demand for wheat will

Accepted Answer

A)  raise the price of wheat and shift inward the marginal revenue product of labor producing wheat. 
B)  lead to more capital and less labor used in producing wheat. 
C)  raise the price of wheat and shift out the marginal revenue product of labor producing wheat. 
D)  lead to downward pressure on the wages of those producing wheat. 
A)  raise the price of wheat and shift inward the marginal revenue product of labor producing wheat. 
B)  lead to more capital and less labor used in producing wheat. 
C)  raise the price of wheat and shift out the marginal revenue product of labor producing wheat. 
D)  lead to downward pressure on the wages of those producing wheat.

Question 2

-In the above table, if the marginal factor cost is $96, how many workers would be hired?

Accepted Answer

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

Question 3

Aluminum cannot be produced without bauxite. Hence, the price elasticity of demand for bauxite by aluminum manufacturers will be

Accepted Answer

A)  perfectly elastic. 
B)  elastic. 
C)  inelastic. 
D)  unitary elastic. 
A)  perfectly elastic. 
B)  elastic. 
C)  inelastic. 
D)  unitary elastic.

Question 4

A monopolist will hire fewer workers than a competitive firm, other things being equal, because

Accepted Answer

A)  the monopolist exploits labor and other types of producers do not. 
B)  the monopolist must take account of the declining product price that must be charged in order to sell more units of the product. 
C)  the monopolist is more efficient. 
D)  diminishing marginal productivity of labor is more severe for a monopolist. 
A)  the monopolist exploits labor and other types of producers do not. 
B)  the monopolist must take account of the declining product price that must be charged in order to sell more units of the product. 
C)  the monopolist is more efficient. 
D)  diminishing marginal productivity of labor is more severe for a monopolist.

Question 5

Other things equal, a monopolist will hire

Accepted Answer

A)  more workers than a perfectly competitive industry. 
B)  fewer workers than a perfectly competitive industry. 
C)  more workers than a perfectly competitive firm. 
D)  the same number of workers as a perfectly competitive industry would. 
A)  more workers than a perfectly competitive industry. 
B)  fewer workers than a perfectly competitive industry. 
C)  more workers than a perfectly competitive firm. 
D)  the same number of workers as a perfectly competitive industry would.

Question 6

Which of the following statements describes the long-run effects of global outsourcing?

Accepted Answer

A)  Wages for U.S. workers will decrease but wages in other countries will increase. 
B)  Wages in all countries will remain the same as before the outsourcing. 
C)  Wages and employment will increase globally. 
D)  Wages will increase globally and employment will stay the same. 
A)  Wages for U.S. workers will decrease but wages in other countries will increase. 
B)  Wages in all countries will remain the same as before the outsourcing. 
C)  Wages and employment will increase globally. 
D)  Wages will increase globally and employment will stay the same.

Question 7

Which of the following represents the general rule of hiring for a firm?

Accepted Answer

A)  TPP = TFC 
B)  APP = W 
C)  MC = MR 
D)  MRP = MFC 
A)  TPP = TFC 
B)  APP = W 
C)  MC = MR 
D)  MRP = MFC

Question 8

When manufacturing a car, parts must be soldered together. This work can be done by labor or by a robot (capital). More robots will be hired when the price of labor increases. This is known as

Accepted Answer

A)  the effect of changing labor productivity. 
B)  marginal revenue product. 
C)  the complementary effect. 
D)  the substitution effect. 
A)  the effect of changing labor productivity. 
B)  marginal revenue product. 
C)  the complementary effect. 
D)  the substitution effect.

Question 9

-The above table depicts the output of a firm that manufactures computers. The computers sell for $1,000 each. What is the marginal physical product (MPP) of the eleventh worker per week?

Accepted Answer

A)  90 units 
B)  80 units 
C)  $7,000 
D)  $6,000 
A)  90 units 
B)  80 units 
C)  $7,000 
D)  $6,000

Question 10

As a firm hires more workers, holding the amounts of capital and other inputs constant,

Accepted Answer

A)  output increases at a decreasing rate. 
B)  output increases at a constant rate. 
C)  output increases for a while and then decreases. 
D)  output increases, but we can't be certain whether output increases at an increasing or a decreasing rate. 
A)  output increases at a decreasing rate. 
B)  output increases at a constant rate. 
C)  output increases for a while and then decreases. 
D)  output increases, but we can't be certain whether output increases at an increasing or a decreasing rate.

Question 11

-Refer to the above table. What does the marginal physical product equal when the amount of labor goes from 12 to 13 units?

Accepted Answer

A)  58.5 
B)  70 
C)  690 
D)  760 
A)  58.5 
B)  70 
C)  690 
D)  760

Question 12

"Other things being equal, the monopolist hires fewer workers than would be hired than a perfectly competitive industry." Do you agree or disagree? Why?

Accepted Answer

Agree. For competitive firms, marginal r

Question 13

If the price elasticity of demand is greater than 1, then consumer demand is

Accepted Answer

A)  unrelated to the elasticity of demand. 
B)  inelastic. 
C)  elastic. 
D)  unitary elastic. 
A)  unrelated to the elasticity of demand. 
B)  inelastic. 
C)  elastic. 
D)  unitary elastic.

Question 14

-In the above table, what is the marginal physical product of worker 2?

Accepted Answer

A)  10 
B)  40 
C)  11 
D)  12 
A)  10 
B)  40 
C)  11 
D)  12

Question 15

If the wage rate doesn't change but a profit-maximizing competitive firm hires fewer workers, we know that

Accepted Answer

A)  the price of the product increased. 
B)  technical change occurred that increased labor productivity, reducing the firm's demand for labor. 
C)  demand for the product fell or there has been a reduction in labor productivity. 
D)  marginal factor cost increased. 
A)  the price of the product increased. 
B)  technical change occurred that increased labor productivity, reducing the firm's demand for labor. 
C)  demand for the product fell or there has been a reduction in labor productivity. 
D)  marginal factor cost increased.

Question 16

Which of the following would cause the labor demand curve to shift to the right?

Accepted Answer

A)  A decrease in demand for the product the labor is used to produce 
B)  An increase in labor productivity 
C)  A decrease in the price of a complimentary resource 
D)  All of the above 
A)  A decrease in demand for the product the labor is used to produce 
B)  An increase in labor productivity 
C)  A decrease in the price of a complimentary resource 
D)  All of the above

Exam 28: The Labor Market: Demand, Supply and Outsourcing

An outward shift in the consumer demand for wheat will

-In the above table, if the marginal factor cost is $96, how many workers would be hired?

Aluminum cannot be produced without bauxite. Hence, the price elasticity of demand for bauxite by aluminum manufacturers will be

A monopolist will hire fewer workers than a competitive firm, other things being equal, because

Other things equal, a monopolist will hire

Which of the following statements describes the long-run effects of global outsourcing?

Which of the following represents the general rule of hiring for a firm?

When manufacturing a car, parts must be soldered together. This work can be done by labor or by a robot (capital). More robots will be hired when the price of labor increases. This is known as

-The above table depicts the output of a firm that manufactures computers. The computers sell for $1,000 each. What is the marginal physical product (MPP) of the eleventh worker per week?

As a firm hires more workers, holding the amounts of capital and other inputs constant,

-Refer to the above table. What does the marginal physical product equal when the amount of labor goes from 12 to 13 units?

"Other things being equal, the monopolist hires fewer workers than would be hired than a perfectly competitive industry." Do you agree or disagree? Why?

If the price elasticity of demand is greater than 1, then consumer demand is

-In the above table, what is the marginal physical product of worker 2?

If the wage rate doesn't change but a profit-maximizing competitive firm hires fewer workers, we know that

Which of the following would cause the labor demand curve to shift to the right?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters