Question 1

Labour markets are different from most product markets because labour demand is:

Accepted Answer

A)  horizontal 
B)  upward-sloping 
C)  derived 
D)  based on social needs, not economic 
A)  horizontal 
B)  upward-sloping 
C)  derived 
D)  based on social needs, not economic

Question 2

Graph 18-2
  
-Refer to Graph 18-2. If the price of apples increases, wage will:

Accepted Answer

A)  fall and less apple pickers will be hired 
B)  fall and more apple pickers will be hired 
C)  rise and less apple pickers will be hired 
D)  rise and more apple pickers will be hired 
A)  fall and less apple pickers will be hired 
B)  fall and more apple pickers will be hired 
C)  rise and less apple pickers will be hired 
D)  rise and more apple pickers will be hired

Question 3

In 2005, Zimbabwe was an unstable place to live or work. The civil unrest sent thousands of refugees across the border to South Africa, where they sought relief from the dangers. From the information provided, in which of the following ways might the Zimbabwean situation possibly affect South African labour markets?

Accepted Answer

A)  all of the below 
B)  wages would decrease 
C)  total employment would increase 
D)  marginal product of labour would decrease 
A)  all of the below 
B)  wages would decrease 
C)  total employment would increase 
D)  marginal product of labour would decrease

Question 4

The factors of production are best defined as the:

Accepted Answer

A)  the factual description of the production process 
B)  the labour used to produce goods and services 
C)  wages paid to the workforce 
D)  inputs used to produce goods and services 
A)  the factual description of the production process 
B)  the labour used to produce goods and services 
C)  wages paid to the workforce 
D)  inputs used to produce goods and services

Question 5

Identify the true statements about the value of the marginal product for a competitive firm below.

Accepted Answer

A)  it diminishes as the number of workers rises 
B)  it changes when marginal product changes 
C)  it changes when price changes 
D)  all of the above 
A)  it diminishes as the number of workers rises 
B)  it changes when marginal product changes 
C)  it changes when price changes 
D)  all of the above

Question 6

A competitive, profit-maximising firm labour demand curve is equal to the:

Accepted Answer

A)  the total output curve divided by wages 
B)  average level of demand for the final product 
C)  the production function 
D)  the value of marginal product curve 
A)  the total output curve divided by wages 
B)  average level of demand for the final product 
C)  the production function 
D)  the value of marginal product curve

Question 7

When the price of computer software rises, the value of the marginal product of computer programmers will:

Accepted Answer

A)  fall 
B)  rise 
C)  remain unchanged 
D)  fall or rise, either is possible 
A)  fall 
B)  rise 
C)  remain unchanged 
D)  fall or rise, either is possible

Question 8

Gertrude Kelp owns three boats that participate in commercial fishing for fresh tuna. As part of her business she hires a captain and several crew members for each boat. In the market for fresh tuna, Gertrude is one of thousands of fishers. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of tuna is negligible relative to the size of the market.
-According to the information provided, if Gertrude is a price taker in the crew market she has only to decide:

Accepted Answer

A)  how many crew members to hire 
B)  the wage to pay the crew she hires 
C)  the size of the boats others use to catch tuna 
D)  the price of the tuna she will catch 
A)  how many crew members to hire 
B)  the wage to pay the crew she hires 
C)  the size of the boats others use to catch tuna 
D)  the price of the tuna she will catch

Question 9

The basic purpose of the theory of factor markets is to explain how income is distributed among factors of production.

Accepted Answer

A) True 
 B)False

Question 10

What does an upward-sloping supply curve mean?

Accepted Answer

A)  it means that an increase in wages induces workers to increase the quantity of labour they supply 
B)  it means that workers prefer to buy more leisure time when their incomes increase 
C)  it means that workers prefer less labour when wages are high 
D)  all of the above 
A)  it means that an increase in wages induces workers to increase the quantity of labour they supply 
B)  it means that workers prefer to buy more leisure time when their incomes increase 
C)  it means that workers prefer less labour when wages are high 
D)  all of the above

Question 11

A worker's contribution to a firm's revenue is measured directly by the worker's:

Accepted Answer

A)  value of marginal product 
B)  marginal product multiplied by his/her wage 
C)  marginal product minus his/her wage 
D)  contribution to output 
A)  value of marginal product 
B)  marginal product multiplied by his/her wage 
C)  marginal product minus his/her wage 
D)  contribution to output

Question 12

Table 18-1
  
-Refer to Table 18-1. What is the marginal profit of the fourth worker?

Accepted Answer

A)  -$100 
B)  $0 
C)  $200 
D)  $400 
A)  -$100 
B)  $0 
C)  $200 
D)  $400

Question 13

Which of the following factors would lead to an increase in the supply of labour?

Accepted Answer

A)  a country experiencing an increase of immigrant labour 
B)  the price of a firm's final product increasing 
C)  the wage rate increasing 
D)  a country tightening border restrictions to limit immigrant labour 
A)  a country experiencing an increase of immigrant labour 
B)  the price of a firm's final product increasing 
C)  the wage rate increasing 
D)  a country tightening border restrictions to limit immigrant labour

Question 14

Graph 18-2
  
-Refer to Graph 18-2. If the apple pickers start working fewer hours (by taking more vacation time), the equilibrium wage will:

Accepted Answer

A)  fall below W1 due to a shift in supply 
B)  rise above W1 due to a shift in supply 
C)  fall below W1 due to a shift in demand 
D)  rise above W1 due to a shift in demand 
A)  fall below W1 due to a shift in supply 
B)  rise above W1 due to a shift in supply 
C)  fall below W1 due to a shift in demand 
D)  rise above W1 due to a shift in demand

Question 15

Define the terms diminishing marginal product and the value of marginal product.

Accepted Answer

Diminishing marginal product- the proper

Question 16

The supply of labour in any one market depends on the opportunities available in other markets.

Accepted Answer

A) True 
 B)False

Question 17

To maximise profit, a competitive firm hires workers up to the point where the:

Accepted Answer

A)  marginal product and marginal cost curves intersect 
B)  value of the marginal product and marginal revenue curves intersect 
C)  value of the marginal product and the wage curves intersect 
D)  wage and the total revenue curves intersect 
A)  marginal product and marginal cost curves intersect 
B)  value of the marginal product and marginal revenue curves intersect 
C)  value of the marginal product and the wage curves intersect 
D)  wage and the total revenue curves intersect

Question 18

The demand curve for land can be thought of as:

Accepted Answer

A)  (marginal product of land)×(marginal product of labour) 
B)  (marginal product of land)/(marginal product of labour) 
C)  (marginal product of land)×(rental price of land) 
D)  (marginal product of land)/(rental price of land) 
A)  (marginal product of land)×(marginal product of labour) 
B)  (marginal product of land)/(marginal product of labour) 
C)  (marginal product of land)×(rental price of land) 
D)  (marginal product of land)/(rental price of land)

Question 19

A competitive, profit-maximising firm hires workers until:

Accepted Answer

A)  unemployment rates are zero 
B)  the value of the marginal product equals the wage 
C)  marginal product equals zero 
D)  marginal revenue equals zero 
A)  unemployment rates are zero 
B)  the value of the marginal product equals the wage 
C)  marginal product equals zero 
D)  marginal revenue equals zero

Question 20

A decrease in the price of milk products will not have any effect on the wages of dairy-farm workers.

Accepted Answer

A) True 
 B)False

Exam 19: The Markets for the Factors of Production

Labour markets are different from most product markets because labour demand is:

Graph 18-2 -Refer to Graph 18-2. If the price of apples increases, wage will:

The factors of production are best defined as the:

Identify the true statements about the value of the marginal product for a competitive firm below.

A competitive, profit-maximising firm labour demand curve is equal to the:

When the price of computer software rises, the value of the marginal product of computer programmers will:

The basic purpose of the theory of factor markets is to explain how income is distributed among factors of production.

What does an upward-sloping supply curve mean?

A worker's contribution to a firm's revenue is measured directly by the worker's:

Table 18-1 -Refer to Table 18-1. What is the marginal profit of the fourth worker?

Which of the following factors would lead to an increase in the supply of labour?

Graph 18-2 -Refer to Graph 18-2. If the apple pickers start working fewer hours (by taking more vacation time), the equilibrium wage will:

Define the terms diminishing marginal product and the value of marginal product.

The supply of labour in any one market depends on the opportunities available in other markets.

To maximise profit, a competitive firm hires workers up to the point where the:

The demand curve for land can be thought of as:

A competitive, profit-maximising firm hires workers until:

A decrease in the price of milk products will not have any effect on the wages of dairy-farm workers.

Ten Lessons From Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand and Government Policies

Consumers, Producers and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Business Strategy

Competition Policy

Monopolistic Competition

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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