Question 1

Which of the following statements is true?

Accepted Answer

A)  A minimum wage causes an increase in employment. 
B)  A minimum wage reduces the demand for labor. 
C)  A minimum wage reduces the quantity demanded of labor. 
D)  A minimum wage increases the quantity of labor demanded. 
A)  A minimum wage causes an increase in employment. 
B)  A minimum wage reduces the demand for labor. 
C)  A minimum wage reduces the quantity demanded of labor. 
D)  A minimum wage increases the quantity of labor demanded.

Question 2

A leftward shift in the labor supply curve would result if:

Accepted Answer

A)  people value leisure less highly. 
B)  people have less nonlabor income. 
C)  transit costs to and from work decline. 
D)  the population decreases. 
A)  people value leisure less highly. 
B)  people have less nonlabor income. 
C)  transit costs to and from work decline. 
D)  the population decreases.

Question 3

The price paid by a firm for a factor of production in a perfectly competitive market:

Accepted Answer

A)  increases with the quantity of input demanded. 
B)  decreases with the quantity of input demanded. 
C)  is equal to the market price of the factor. 
D)  is less than the market price of the factor. 
A)  increases with the quantity of input demanded. 
B)  decreases with the quantity of input demanded. 
C)  is equal to the market price of the factor. 
D)  is less than the market price of the factor.

Question 4

Use the following to answer question(s):    
-(Exhibit: Marginal Revenue Product and Demand) Assume that the product price is $2 per unit, the price of the factor of production is $20 per unit, and 8 units are being hired.Profit can be maximized by hiring _______ unit(s).

Accepted Answer

A)  1 more 
B)  2 more 
C)  1 fewer 
D)  2 fewer 
A)  1 more 
B)  2 more 
C)  1 fewer 
D)  2 fewer

Question 5

The marginal factor cost in a perfectly competitive market:

Accepted Answer

A)  is equal to the market price of the factor. 
B)  is less than the market price of the factor. 
C)  is greater than the market price of the factor. 
D)  increases with the quantity of input demanded. 
A)  is equal to the market price of the factor. 
B)  is less than the market price of the factor. 
C)  is greater than the market price of the factor. 
D)  increases with the quantity of input demanded.

Question 6

The demand for a factor is negatively sloped because the marginal cost curve for a firm is negatively sloped.

Accepted Answer

A) True 
 B)False

Question 7

Use the following to answer question(s):    
-(Exhibit: Marginal Revenue Product and Demand) Assume that the product price is $2 per unit, the price of the factor of production is $40 per unit, and 4 units are being hired.Profit can be maximized by hiring _______ unit(s).

Accepted Answer

A)  1 more 
B)  2 more 
C)  1 fewer 
D)  2 fewer 
A)  1 more 
B)  2 more 
C)  1 fewer 
D)  2 fewer

Question 8

In terms of labor supply, the substitution effect of a higher wage causes a(n):

Accepted Answer

A)  increase in leisure time. 
B)  decrease in the quantity of labor supplied. 
C)  substitution of work for leisure. 
D)  reduction of work time to zero. 
A)  increase in leisure time. 
B)  decrease in the quantity of labor supplied. 
C)  substitution of work for leisure. 
D)  reduction of work time to zero.

Question 9

The assumption of perfect competition is sometimes used in the analysis of labor markets because:

Accepted Answer

A)  it provides important insights. 
B)  it is totally realistic. 
C)  it is totally unrealistic. 
D)  all markets are perfectly competitive. 
A)  it provides important insights. 
B)  it is totally realistic. 
C)  it is totally unrealistic. 
D)  all markets are perfectly competitive.

Which of the following statements is true?

A leftward shift in the labor supply curve would result if:

The price paid by a firm for a factor of production in a perfectly competitive market:

Use the following to answer question(s): -(Exhibit: Marginal Revenue Product and Demand) Assume that the product price is $2 per unit, the price of the factor of production is $20 per unit, and 8 units are being hired.Profit can be maximized by hiring _______ unit(s).

The marginal factor cost in a perfectly competitive market:

The demand for a factor is negatively sloped because the marginal cost curve for a firm is negatively sloped.

Use the following to answer question(s): -(Exhibit: Marginal Revenue Product and Demand) Assume that the product price is $2 per unit, the price of the factor of production is $40 per unit, and 4 units are being hired.Profit can be maximized by hiring _______ unit(s).

In terms of labor supply, the substitution effect of a higher wage causes a(n):

The assumption of perfect competition is sometimes used in the analysis of labor markets because:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 12: Wages and Employment in Perfect Competition

Which of the following statements is true?

A leftward shift in the labor supply curve would result if:

The price paid by a firm for a factor of production in a perfectly competitive market:

Use the following to answer question(s): -(Exhibit: Marginal Revenue Product and Demand) Assume that the product price is $2 per unit, the price of the factor of production is $20 per unit, and 8 units are being hired.Profit can be maximized by hiring _______ unit(s).

The marginal factor cost in a perfectly competitive market:

The demand for a factor is negatively sloped because the marginal cost curve for a firm is negatively sloped.

Use the following to answer question(s): -(Exhibit: Marginal Revenue Product and Demand) Assume that the product price is $2 per unit, the price of the factor of production is $40 per unit, and 4 units are being hired.Profit can be maximized by hiring _______ unit(s).

In terms of labor supply, the substitution effect of a higher wage causes a(n):

The assumption of perfect competition is sometimes used in the analysis of labor markets because:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters