Question 1

An increase in the participation of women in the labor force has been accompanied by a slower increase in wages.

Accepted Answer

A) True 
 B)False

Question 2

Population increases, all other things unchanged, tend to:

Accepted Answer

A)  reduce wages. 
B)  increase wages. 
C)  leave wages unchanged. 
D)  increase the MFCL. 
A)  reduce wages. 
B)  increase wages. 
C)  leave wages unchanged. 
D)  increase the MFCL.

Question 3

If people expect to _______ and also expect that benefits from social security may not be forthcoming, the supply curve for labor will shift to the _______ .

Accepted Answer

A)  live longer; left 
B)  live shorter lives; right 
C)  live longer; right 
D)  die soon; right 
A)  live longer; left 
B)  live shorter lives; right 
C)  live longer; right 
D)  die soon; right

Question 4

Perfectly competitive factor and output markets that satisfy the efficiency condition are similar in that both generate:

Accepted Answer

A)  an underproduction of output. 
B)  an overproduction of output. 
C)  market prices that are greater than opportunity costs. 
D)  market prices that are equal to opportunity costs. 
A)  an underproduction of output. 
B)  an overproduction of output. 
C)  market prices that are greater than opportunity costs. 
D)  market prices that are equal to opportunity costs.

Question 5

Markets in which households supply factors of production demanded by firms are:

Accepted Answer

A)  goods markets. 
B)  factor markets. 
C)  product markets. 
D)  output markets. 
A)  goods markets. 
B)  factor markets. 
C)  product markets. 
D)  output markets.

Question 6

A higher wage has an income effect that is always negative with respect to the quantity of labor supplied.

Accepted Answer

A) True 
 B)False

Question 7

The wage paid by a firm buying labor in a perfectly competitive market:

Accepted Answer

A)  is greater than the market wage. 
B)  is less than the market wage. 
C)  is equal to the market wage. 
D)  increases with the quantity of labor hired. 
A)  is greater than the market wage. 
B)  is less than the market wage. 
C)  is equal to the market wage. 
D)  increases with the quantity of labor hired.

Question 8

MFCL is equal to the price of labor times the price of output.

Accepted Answer

A) True 
 B)False

Question 9

A determinant of the demand for a factor of production is the:

Accepted Answer

A)  price of the factor. 
B)  price of a substitute factor. 
C)  marginal cost of the factor. 
D)  quantity of the factor supplied. 
A)  price of the factor. 
B)  price of a substitute factor. 
C)  marginal cost of the factor. 
D)  quantity of the factor supplied.

Question 10

The change in total cost when one more unit of a factor of production is added is:

Accepted Answer

A)  marginal revenue product. 
B)  marginal product. 
C)  marginal cost. 
D)  marginal factor cost. 
A)  marginal revenue product. 
B)  marginal product. 
C)  marginal cost. 
D)  marginal factor cost.

Question 11

The market or industry supply curve for labor in perfectly competitive factor markets is usually horizontal.

Accepted Answer

A) True 
 B)False

Question 12

Beyond some point a higher wage may induce an individual to work _______ , and the labor supply curve may then _______ .

Accepted Answer

A)  more; bend backward 
B)  less; bend backward 
C)  more; slope downward 
D)  harder; become vertical 
A)  more; bend backward 
B)  less; bend backward 
C)  more; slope downward 
D)  harder; become vertical

Question 13

A wage increase raises the quantity of labor supplied through the substitution effect.

Accepted Answer

A) True 
 B)False

Question 14

In a perfectly competitive labor market, each firm can hire:

Accepted Answer

A)  only a fixed amount of labor at the going wage. 
B)  all the labor it wants, but only by outbidding its competitors. 
C)  larger quantities of labor at rising wages per worker. 
D)  larger quantities of labor at going market wages per worker. 
A)  only a fixed amount of labor at the going wage. 
B)  all the labor it wants, but only by outbidding its competitors. 
C)  larger quantities of labor at rising wages per worker. 
D)  larger quantities of labor at going market wages per worker.

Question 15

The trade-off between work and leisure underlying the supply of labor involves the income effect and the:

Accepted Answer

A)  substitution effect. 
B)  elasticity effect. 
C)  production effect. 
D)  wage effect. 
A)  substitution effect. 
B)  elasticity effect. 
C)  production effect. 
D)  wage effect.

Question 16

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 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)  3 fewer 
A)  1 more 
B)  2 more 
C)  1 fewer 
D)  3 fewer

Question 17

If a firm is using a factor of production from a perfectly competitive market such that MFC > MRP, then profit:

Accepted Answer

A)  is maximized. 
B)  can be increased by using less of the factor. 
C)  can be increased by using more of the factor. 
D)  can be increased by decreasing the factor price. 
A)  is maximized. 
B)  can be increased by using less of the factor. 
C)  can be increased by using more of the factor. 
D)  can be increased by decreasing the factor price.

Question 18

Use the following to answer question(s): Wage Determination in Perfect Competition
  
-(Exhibit: Wage Determination in Perfect Competition) In Panel (b):

Accepted Answer

A)  the firm accepts the wage as given by the market. 
B)  the quantity of labor hired is determined where MRP of labor is greater than the MFC of labor. 
C)  s₁ is the firm's demand curve of labor. 
D)  MRP₁ is the marginal ratio product curve. 
A)  the firm accepts the wage as given by the market. 
B)  the quantity of labor hired is determined where MRP of labor is greater than the MFC of labor. 
C)  s₁ is the firm's demand curve of labor. 
D)  MRP₁ is the marginal ratio product curve.

Question 19

A change in demand for a given factor of production will not occur if:

Accepted Answer

A)  the price of that factor falls. 
B)  the productivity of that factor increases. 
C)  the productivity of that factor decreases. 
D)  there is a decrease in the price of a substitute factor. 
A)  the price of that factor falls. 
B)  the productivity of that factor increases. 
C)  the productivity of that factor decreases. 
D)  there is a decrease in the price of a substitute factor.

Question 20

MRP =MR × MP.

Accepted Answer

A) True 
 B)False

An increase in the participation of women in the labor force has been accompanied by a slower increase in wages.

Population increases, all other things unchanged, tend to:

If people expect to _ and also expect that benefits from social security may not be forthcoming, the supply curve for labor will shift to the _ .

Perfectly competitive factor and output markets that satisfy the efficiency condition are similar in that both generate:

Markets in which households supply factors of production demanded by firms are:

A higher wage has an income effect that is always negative with respect to the quantity of labor supplied.

The wage paid by a firm buying labor in a perfectly competitive market:

MFCL is equal to the price of labor times the price of output.

A determinant of the demand for a factor of production is the:

The change in total cost when one more unit of a factor of production is added is:

The market or industry supply curve for labor in perfectly competitive factor markets is usually horizontal.

Beyond some point a higher wage may induce an individual to work _ , and the labor supply curve may then _ .

A wage increase raises the quantity of labor supplied through the substitution effect.

In a perfectly competitive labor market, each firm can hire:

The trade-off between work and leisure underlying the supply of labor involves the income effect and the:

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 8 units are being hired.Profit can be maximized by hiring _______ unit(s).

If a firm is using a factor of production from a perfectly competitive market such that MFC > MRP, then profit:

Use the following to answer question(s): Wage Determination in Perfect Competition -(Exhibit: Wage Determination in Perfect Competition) In Panel (b):

A change in demand for a given factor of production will not occur if:

MRP =MR × MP.

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

An increase in the participation of women in the labor force has been accompanied by a slower increase in wages.

Population increases, all other things unchanged, tend to:

If people expect to _______ and also expect that benefits from social security may not be forthcoming, the supply curve for labor will shift to the _______ .

Perfectly competitive factor and output markets that satisfy the efficiency condition are similar in that both generate:

Markets in which households supply factors of production demanded by firms are:

A higher wage has an income effect that is always negative with respect to the quantity of labor supplied.

The wage paid by a firm buying labor in a perfectly competitive market:

MFCL is equal to the price of labor times the price of output.

A determinant of the demand for a factor of production is the:

The change in total cost when one more unit of a factor of production is added is:

The market or industry supply curve for labor in perfectly competitive factor markets is usually horizontal.

Beyond some point a higher wage may induce an individual to work _______ , and the labor supply curve may then _______ .

A wage increase raises the quantity of labor supplied through the substitution effect.

In a perfectly competitive labor market, each firm can hire:

The trade-off between work and leisure underlying the supply of labor involves the income effect and the:

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 8 units are being hired.Profit can be maximized by hiring _______ unit(s).

If a firm is using a factor of production from a perfectly competitive market such that MFC > MRP, then profit:

Use the following to answer question(s): Wage Determination in Perfect Competition -(Exhibit: Wage Determination in Perfect Competition) In Panel (b):

A change in demand for a given factor of production will not occur if:

MRP =MR × MP.

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

If people expect to _ and also expect that benefits from social security may not be forthcoming, the supply curve for labor will shift to the _ .

Beyond some point a higher wage may induce an individual to work _ , and the labor supply curve may then _ .