Question 1

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

Accepted Answer

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

Question 2

The more work a person does, all other things unchanged, then the:

Accepted Answer

A)  greater his or her free time. 
B)  greater his or her nonmarket use of time. 
C)  less his or her income. 
D)  less his or her leisure. 
A)  greater his or her free time. 
B)  greater his or her nonmarket use of time. 
C)  less his or her income. 
D)  less his or her leisure.

Question 3

If an increase in the use of one factor of production increases the demand for the other, the two factors are:

Accepted Answer

A)  normal factors of production. 
B)  substitute factors of production. 
C)  inferior factors of production. 
D)  complementary factors of production. 
A)  normal factors of production. 
B)  substitute factors of production. 
C)  inferior factors of production. 
D)  complementary factors of production.

Question 4

Use the following to answer question(s): Wage Determination in Perfect Competition
  
-(Exhibit: Wage Determination in Perfect Competition) An increase in the marginal product of labor will result in:

Accepted Answer

A)  an increase in the market supply of labor. 
B)  an increase in the demand for labor. 
C)  a decrease in the MRP of labor. 
D)  a lower wage for labor. 
A)  an increase in the market supply of labor. 
B)  an increase in the demand for labor. 
C)  a decrease in the MRP of labor. 
D)  a lower wage for labor.

Question 5

For a firm buying factors of production in a perfectly competitive factor market:

Accepted Answer

A)  factors are hired where marginal revenue product is equal to marginal factor cost. 
B)  its marginal revenue product curve for a factor is its factor supply curve. 
C)  the price of a factor will be greater than its marginal revenue product. 
D)  the price of a factor will be less than its marginal factor cost. 
A)  factors are hired where marginal revenue product is equal to marginal factor cost. 
B)  its marginal revenue product curve for a factor is its factor supply curve. 
C)  the price of a factor will be greater than its marginal revenue product. 
D)  the price of a factor will be less than its marginal factor cost.

Question 6

The supply curve facing a firm for a factor of production in a perfectly competitive market is:

Accepted Answer

A)  upward sloping. 
B)  downward sloping. 
C)  vertical. 
D)  horizontal. 
A)  upward sloping. 
B)  downward sloping. 
C)  vertical. 
D)  horizontal.

Question 7

Use the following to answer question(s): Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market
  
-(Exhibit: Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market) If the equilibrium wage in the market for bricklayers is $100 a day, but a minimum wage for bricklayers of $130 a day is set by the government:

Accepted Answer

A)  6 workers will now be hired by the firm. 
B)  3 workers who otherwise would have been employed are now unemployed. 
C)  all bricklayers are better off. 
D)  the firm will shut down. 
A)  6 workers will now be hired by the firm. 
B)  3 workers who otherwise would have been employed are now unemployed. 
C)  all bricklayers are better off. 
D)  the firm will shut down.

Question 8

Marginal product times marginal revenue is marginal revenue product.

Accepted Answer

A) True 
 B)False

Question 9

A firm will maximize profits in the hiring of labor if it hires where:

Accepted Answer

A) MRP > MFC. B) MRP = MFC. C) MRP < MFC. D) MP x MR = MRP. A) MRP > MFC. B) MRP = MFC. C) MRP < MFC. D) MP x MR = MRP.

Question 10

The amount that an additional factor adds to a firm's revenue is called marginal revenue.

Accepted Answer

A) True 
 B)False

Question 11

A backward-bending supply curve of labor shows that at relatively low wages the:

Accepted Answer

A)  income effect dominates the substitution effect, and the supply curve has a positive slope. 
B)  income effect dominates the substitution effect, and the supply curve has a negative slope. 
C)  substitution effect dominates the income effect, and the supply curve has a positive slope. 
D)  substitution effect dominates the income effect, and the supply curve has a negative slope. 
A)  income effect dominates the substitution effect, and the supply curve has a positive slope. 
B)  income effect dominates the substitution effect, and the supply curve has a negative slope. 
C)  substitution effect dominates the income effect, and the supply curve has a positive slope. 
D)  substitution effect dominates the income effect, and the supply curve has a negative slope.

Question 12

If the demand for a certain type of labor is price elastic, a(n) _______ in its price (wage) will, all other things unchanged, _______ the quantity of that type of labor demanded by a _______ percentage than the percentage increase in price.

Accepted Answer

A)  decrease; reduce; greater 
B)  increase; reduce; greater 
C)  decrease; increase; smaller 
D)  increase; increase; smaller 
A)  decrease; reduce; greater 
B)  increase; reduce; greater 
C)  decrease; increase; smaller 
D)  increase; increase; smaller

Question 13

For a firm buying factors of production in a perfectly competitive factor market:

Accepted Answer

A)  factors are hired where marginal revenue product is less than marginal factor cost. 
B)  its marginal revenue product curve for a factor is its factor demand curve. 
C)  the price of a factor will be greater than its marginal revenue product. 
D)  the price of a factor will be less than its marginal factor cost. 
A)  factors are hired where marginal revenue product is less than marginal factor cost. 
B)  its marginal revenue product curve for a factor is its factor demand curve. 
C)  the price of a factor will be greater than its marginal revenue product. 
D)  the price of a factor will be less than its marginal factor cost.

Question 14

Use the following to answer question(s): Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market
  
-(Exhibit: Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market) If the price (wage) of bricklayers is $100 per day, that price was determined by:

Accepted Answer

A)  the firm hiring the bricklayers. 
B)  demand and supply in the market for bricklayers. 
C)  the government. 
D)  where MRPBRICKLAYERS = MPBRICKLAYERS x P of output. 
A)  the firm hiring the bricklayers. 
B)  demand and supply in the market for bricklayers. 
C)  the government. 
D)  where MRPBRICKLAYERS = MPBRICKLAYERS x P of output.

Question 15

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

Accepted Answer

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

Question 16

Use the following to answer question(s): The Minimum Wage
  
-(Exhibit: The Minimum Wage) Instituting a minimum wage _______ the ________ labor and _______ the _______ labor.

Accepted Answer

A)  decreases; supply of; increases; demand for 
B)  increases; the quantity supplied of; decreases; demand for 
C)  increases; the quantity supplied of; decreases; quantity demanded of 
D)  decreases; demand; increases; supply 
A)  decreases; supply of; increases; demand for 
B)  increases; the quantity supplied of; decreases; demand for 
C)  increases; the quantity supplied of; decreases; quantity demanded of 
D)  decreases; demand; increases; supply

Question 17

The demand for a factor of production is derived from the demand for the output that it produces.

Accepted Answer

A) True 
 B)False

Question 18

Use the following to answer question(s): Demand and Supply in a Perfectly Competitive Labor Market
  
-(Exhibit: Demand and Supply in a Perfectly Competitive Labor Market) Curve ________ is the _______ for labor, and Curve _______ is the _______ curve for labor.

Accepted Answer

A)  B; demand; A; industry supply 
B)  A; demand; B; supply of labor faced by a firm 
C)  B; MFCL; A; MPL 
D)  A; firm's supply; B; marginal revenue 
A)  B; demand; A; industry supply 
B)  A; demand; B; supply of labor faced by a firm 
C)  B; MFCL; A; MPL 
D)  A; firm's supply; B; marginal revenue

Question 19

Which of the following statements is true?

Accepted Answer

A)  Marginal product is the change in total revenue divided by a one-unit change in a factor. 
B)  Marginal revenue is the change in total output divided by the change in output. 
C)  Marginal revenue product is marginal product times marginal revenue. 
D)  Marginal factor cost is equal to average total cost. 
A)  Marginal product is the change in total revenue divided by a one-unit change in a factor. 
B)  Marginal revenue is the change in total output divided by the change in output. 
C)  Marginal revenue product is marginal product times marginal revenue. 
D)  Marginal factor cost is equal to average total cost.

Question 20

In a perfectly competitive factor market, a firm finds that the marginal factor cost of a factor of production is:

Accepted Answer

A)  greater than its price. 
B)  less than its price. 
C)  equal to its price. 
D)  unrelated to its price. 
A)  greater than its price. 
B)  less than its price. 
C)  equal to its price. 
D)  unrelated to its price.

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

The more work a person does, all other things unchanged, then the:

If an increase in the use of one factor of production increases the demand for the other, the two factors are:

Use the following to answer question(s): Wage Determination in Perfect Competition -(Exhibit: Wage Determination in Perfect Competition) An increase in the marginal product of labor will result in:

For a firm buying factors of production in a perfectly competitive factor market:

The supply curve facing a firm for a factor of production in a perfectly competitive market is:

Marginal product times marginal revenue is marginal revenue product.

A firm will maximize profits in the hiring of labor if it hires where:

The amount that an additional factor adds to a firm's revenue is called marginal revenue.

A backward-bending supply curve of labor shows that at relatively low wages the:

If the demand for a certain type of labor is price elastic, a(n) ___ in its price (wage) will, all other things unchanged, _ the quantity of that type of labor demanded by a _____ percentage than the percentage increase in price.

For a firm buying factors of production in a perfectly competitive factor market:

Use the following to answer question(s): Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market -(Exhibit: Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market) If the price (wage) of bricklayers is $100 per day, that price was determined by:

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

Use the following to answer question(s): The Minimum Wage -(Exhibit: The Minimum Wage) Instituting a minimum wage ___ the labor and _ the _____ labor.

The demand for a factor of production is derived from the demand for the output that it produces.

Use the following to answer question(s): Demand and Supply in a Perfectly Competitive Labor Market -(Exhibit: Demand and Supply in a Perfectly Competitive Labor Market) Curve ____ is the _ for labor, and Curve _ is the ___ curve for labor.

Which of the following statements is true?

In a perfectly competitive factor market, a firm finds that the marginal factor cost of a factor of production is:

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

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

The more work a person does, all other things unchanged, then the:

If an increase in the use of one factor of production increases the demand for the other, the two factors are:

Use the following to answer question(s): Wage Determination in Perfect Competition -(Exhibit: Wage Determination in Perfect Competition) An increase in the marginal product of labor will result in:

For a firm buying factors of production in a perfectly competitive factor market:

The supply curve facing a firm for a factor of production in a perfectly competitive market is:

Marginal product times marginal revenue is marginal revenue product.

A firm will maximize profits in the hiring of labor if it hires where:

The amount that an additional factor adds to a firm's revenue is called marginal revenue.

A backward-bending supply curve of labor shows that at relatively low wages the:

If the demand for a certain type of labor is price elastic, a(n) _______ in its price (wage) will, all other things unchanged, _______ the quantity of that type of labor demanded by a _______ percentage than the percentage increase in price.

For a firm buying factors of production in a perfectly competitive factor market:

Use the following to answer question(s): Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market -(Exhibit: Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market) If the price (wage) of bricklayers is $100 per day, that price was determined by:

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

Use the following to answer question(s): The Minimum Wage -(Exhibit: The Minimum Wage) Instituting a minimum wage _______ the ________ labor and _______ the _______ labor.

The demand for a factor of production is derived from the demand for the output that it produces.

Use the following to answer question(s): Demand and Supply in a Perfectly Competitive Labor Market -(Exhibit: Demand and Supply in a Perfectly Competitive Labor Market) Curve ________ is the _______ for labor, and Curve _______ is the _______ curve for labor.

Which of the following statements is true?

In a perfectly competitive factor market, a firm finds that the marginal factor cost of a factor of production is:

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 the demand for a certain type of labor is price elastic, a(n) ___ in its price (wage) will, all other things unchanged, _ the quantity of that type of labor demanded by a _____ percentage than the percentage increase in price.

Use the following to answer question(s): The Minimum Wage -(Exhibit: The Minimum Wage) Instituting a minimum wage ___ the labor and _ the _____ labor.

Use the following to answer question(s): Demand and Supply in a Perfectly Competitive Labor Market -(Exhibit: Demand and Supply in a Perfectly Competitive Labor Market) Curve ____ is the _ for labor, and Curve _ is the ___ curve for labor.