Question 1

Leisure is

Accepted Answer

A)  an inferior good. 
B)  a complementary good to labour. 
C)  wasteful to society. 
D)  a normal good. 
A)  an inferior good. 
B)  a complementary good to labour. 
C)  wasteful to society. 
D)  a normal good.

Question 2

What is the present value of $575 in one year if the current rate of interest is 4 per cent?

Accepted Answer

A)  $410.71 
B)  $552.88 
C)  $598 
D)  $805 
A)  $410.71 
B)  $552.88 
C)  $598 
D)  $805

Question 3

The market demand curve for labour

Accepted Answer

A)  is determined by adding up the quantity of labour demanded by each firm at each wage, holding constant the other variables that affect the willingness of firms to hire workers. 
B)  is the same as the market demand curve for the product labour produces because it is a derived demand. 
C)  is determined by adding up the demand for labour by each firm at each wage, holding constant the other variables that affect the willingness of firms to hire workers. 
D)  is perfectly inelastic because there is a finite number of workers in the market for labour. 
A)  is determined by adding up the quantity of labour demanded by each firm at each wage, holding constant the other variables that affect the willingness of firms to hire workers. 
B)  is the same as the market demand curve for the product labour produces because it is a derived demand. 
C)  is determined by adding up the demand for labour by each firm at each wage, holding constant the other variables that affect the willingness of firms to hire workers. 
D)  is perfectly inelastic because there is a finite number of workers in the market for labour.

Question 4

For most low-wage earners

Accepted Answer

A)  the income effect of a wage rate increase is likely to be larger than the substitution effect. 
B)  the substitution effect of a wage rate increase is likely to equal the income effect. 
C)  the opportunity cost of leisure is high. 
D)  the substitution effect of a wage rate increase is likely to be larger than the income effect. 
A)  the income effect of a wage rate increase is likely to be larger than the substitution effect. 
B)  the substitution effect of a wage rate increase is likely to equal the income effect. 
C)  the opportunity cost of leisure is high. 
D)  the substitution effect of a wage rate increase is likely to be larger than the income effect.

Question 5

What is a factor market?

Accepted Answer

A)  It is a market where financial instruments are traded. 
B)  It is a market where stocks and bonds are traded. 
C)  It is a market where producers buy consumption and capital goods. 
D)  It is a market where resources used to produce final goods are traded. 
A)  It is a market where financial instruments are traded. 
B)  It is a market where stocks and bonds are traded. 
C)  It is a market where producers buy consumption and capital goods. 
D)  It is a market where resources used to produce final goods are traded.

Question 6

Explain how the market for opticians is affected as a result of the development of laser technology which reduces the demand for glasses and contact lenses.In your explanation be sure to show the connection between the market for glasses and contact lenses and the market for opticians.

Accepted Answer

Opticians are trained professionals who

Question 7

Why do professional basketball players earn more than police officers? Illustrate this situation graphically.

Accepted Answer

Wages are based on the marginal revenue

Question 8

Table 10-2
  
-Refer to Table 10-2.What is the profit-maximising quantity of labour that the firm should hire?

Accepted Answer

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

Question 9

Figure 10-3  
-Refer to Figure 10-3.In Panel A,at high wages (segment iii)

Accepted Answer

A)  the price of leisure is rising relative to the price of labour. 
B)  the price of leisure is falling relative to the price of labour. 
C)  labourers work more as wages increase. 
D)  labour suppliers take more leisure as wages increase. 
A)  the price of leisure is rising relative to the price of labour. 
B)  the price of leisure is falling relative to the price of labour. 
C)  labourers work more as wages increase. 
D)  labour suppliers take more leisure as wages increase.

Question 10

For a firm that is a price taker in the market for labour,the marginal revenue product of labour equals the

Accepted Answer

A)  marginal product of labour multiplied by the wage rate. 
B)  marginal product of labour multiplied by the product price. 
C)  marginal product of labour divided by the wage rate. 
D)  marginal product of labour multiplied by the marginal cost of production. 
A)  marginal product of labour multiplied by the wage rate. 
B)  marginal product of labour multiplied by the product price. 
C)  marginal product of labour divided by the wage rate. 
D)  marginal product of labour multiplied by the marginal cost of production.

Question 11

The demand for labour is a derived demand.Explain what is meant by the term 'derived demand.'

Accepted Answer

A derived demand is the demand

Question 12

Table 10-4
   Table 10-4 lists data for the production of Apple iPods. Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price. MPL and MRPL refer to the marginal product of labour and the marginal revenue product of labour, respectively.
-Refer to Table 10-4.What are the quantity of labour and marginal revenue product of labour that will maximise the profit Apple would earn from selling iPods?

Accepted Answer

A)  2; $160 
B)  3; $340 
C)  2; $680 
D)  3; $140 
A)  2; $160 
B)  3; $340 
C)  2; $680 
D)  3; $140

Question 13

The marginal productivity theory of income distribution was developed by

Accepted Answer

A)  Edward Lazear. 
B)  George Akerlof. 
C)  William Stanley Jevons. 
D)  John Bates Clark. 
A)  Edward Lazear. 
B)  George Akerlof. 
C)  William Stanley Jevons. 
D)  John Bates Clark.

Question 14

The equilibrium wage and quantity of labour in the market for skilled workers is determined by

Accepted Answer

A)  the strength of labour unions. 
B)  the monopsony power of firms. 
C)  the demand and supply of labour. 
D)  the market value created by the output of these skilled workers. 
A)  the strength of labour unions. 
B)  the monopsony power of firms. 
C)  the demand and supply of labour. 
D)  the market value created by the output of these skilled workers.

Question 15

Suppose a competitive firm is paying a wage of $12 an hour.Assume that labour is the only input.If hiring another worker would increase output by four units per hour,then to maximise profits the firm should

Accepted Answer

A)  not change the number of workers it currently hires. 
B)  hire the extra worker. 
C)  lay off some workers. 
D)  There is not enough information to answer the question. 
A)  not change the number of workers it currently hires. 
B)  hire the extra worker. 
C)  lay off some workers. 
D)  There is not enough information to answer the question.

Question 16

The present value of $300 received 5 years in the future would be calculated as which of the following when the interest rate is 5 per cent?

Accepted Answer

A)  300/(1.5)5 
B)  300/(1.05)5 
C)  300 × 1.5 × 5 
D)  5.05/300 
A)  300/(1.5)5 
B)  300/(1.05)5 
C)  300 × 1.5 × 5 
D)  5.05/300

Question 17

What is the difference between labour's marginal product and marginal revenue product?

Accepted Answer

A)  The marginal product of labour is the increase in output as a result of hiring an additional worker, while the marginal revenue product of labour is the increase in profit as a result of hiring an additional worker. 
B)  The marginal revenue product of labour is the dollar value of hiring an additional worker, while the marginal product of labour is the increase in the firm's physical output as a result of hiring an additional worker. 
C)  The marginal product of labour is the additional labour's contribution to the firm's total output, while the marginal revenue product is the additional labour's contribution to the firm's total sales revenue. 
D)  Labour's marginal product is a measure of labour's productivity, while labour's marginal revenue product is a measure of labour's ability to sell the firm's products. 
A)  The marginal product of labour is the increase in output as a result of hiring an additional worker, while the marginal revenue product of labour is the increase in profit as a result of hiring an additional worker. 
B)  The marginal revenue product of labour is the dollar value of hiring an additional worker, while the marginal product of labour is the increase in the firm's physical output as a result of hiring an additional worker. 
C)  The marginal product of labour is the additional labour's contribution to the firm's total output, while the marginal revenue product is the additional labour's contribution to the firm's total sales revenue. 
D)  Labour's marginal product is a measure of labour's productivity, while labour's marginal revenue product is a measure of labour's ability to sell the firm's products.

Question 18

Worker discrimination occurs when

Accepted Answer

A)  workers refuse to perform risky tasks. 
B)  workers refuse to work with persons of a different race. 
C)  customers refuse to buy products produced by a racially diverse workforce. 
D)  employers pay different employees different wages based on race. 
A)  workers refuse to perform risky tasks. 
B)  workers refuse to work with persons of a different race. 
C)  customers refuse to buy products produced by a racially diverse workforce. 
D)  employers pay different employees different wages based on race.

Question 19

While labour unions tend to negotiate above-equilibrium wage rates for their members,they also tend to reduce the quantity of labour hired.

Accepted Answer

A) True 
 B)False

Question 20

The marginal product of labour is the increase in output as a result of hiring an additional worker while the marginal revenue product of labour is the increase in profit as a result of hiring an additional worker.

Accepted Answer

A) True 
 B)False

Leisure is

What is the present value of $575 in one year if the current rate of interest is 4 per cent?

The market demand curve for labour

For most low-wage earners

What is a factor market?

Explain how the market for opticians is affected as a result of the development of laser technology which reduces the demand for glasses and contact lenses.In your explanation be sure to show the connection between the market for glasses and contact lenses and the market for opticians.

Why do professional basketball players earn more than police officers? Illustrate this situation graphically.

Table 10-2 -Refer to Table 10-2.What is the profit-maximising quantity of labour that the firm should hire?

Figure 10-3 -Refer to Figure 10-3.In Panel A,at high wages (segment iii)

For a firm that is a price taker in the market for labour,the marginal revenue product of labour equals the

The demand for labour is a derived demand.Explain what is meant by the term 'derived demand.'

The marginal productivity theory of income distribution was developed by

The equilibrium wage and quantity of labour in the market for skilled workers is determined by

Suppose a competitive firm is paying a wage of $12 an hour.Assume that labour is the only input.If hiring another worker would increase output by four units per hour,then to maximise profits the firm should

The present value of $300 received 5 years in the future would be calculated as which of the following when the interest rate is 5 per cent?

What is the difference between labour's marginal product and marginal revenue product?

Worker discrimination occurs when

While labour unions tend to negotiate above-equilibrium wage rates for their members,they also tend to reduce the quantity of labour hired.

The marginal product of labour is the increase in output as a result of hiring an additional worker while the marginal revenue product of labour is the increase in profit as a result of hiring an additional worker.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 10: Monopoly and Antitrust

Leisure is

What is the present value of $575 in one year if the current rate of interest is 4 per cent?

The market demand curve for labour

For most low-wage earners

What is a factor market?

Explain how the market for opticians is affected as a result of the development of laser technology which reduces the demand for glasses and contact lenses.In your explanation be sure to show the connection between the market for glasses and contact lenses and the market for opticians.

Why do professional basketball players earn more than police officers? Illustrate this situation graphically.

Table 10-2 -Refer to Table 10-2.What is the profit-maximising quantity of labour that the firm should hire?

Figure 10-3 -Refer to Figure 10-3.In Panel A,at high wages (segment iii)

For a firm that is a price taker in the market for labour,the marginal revenue product of labour equals the

The demand for labour is a derived demand.Explain what is meant by the term 'derived demand.'

The marginal productivity theory of income distribution was developed by

The equilibrium wage and quantity of labour in the market for skilled workers is determined by

Suppose a competitive firm is paying a wage of $12 an hour.Assume that labour is the only input.If hiring another worker would increase output by four units per hour,then to maximise profits the firm should

The present value of $300 received 5 years in the future would be calculated as which of the following when the interest rate is 5 per cent?

What is the difference between labour's marginal product and marginal revenue product?

Worker discrimination occurs when

While labour unions tend to negotiate above-equilibrium wage rates for their members,they also tend to reduce the quantity of labour hired.

The marginal product of labour is the increase in output as a result of hiring an additional worker while the marginal revenue product of labour is the increase in profit as a result of hiring an additional worker.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters