Question 1

According to the Hotelling Principle,the price of an nonrenewable resource is expected to

Accepted Answer

A)  fall slowly over time. 
B)  fall at a rate equal to the interest rate. 
C)  fluctuate randomly. 
D)  rise at a rate equal to the interest rate. 
E)  remain constant over time. 
A)  fall slowly over time. 
B)  fall at a rate equal to the interest rate. 
C)  fluctuate randomly. 
D)  rise at a rate equal to the interest rate. 
E)  remain constant over time.

Question 2

Considered as a factor of production,coal is a

Accepted Answer

A)  form of physical capital. 
B)  type of embodied labor. 
C)  nonrenewable natural resource. 
D)  renewable natural resource. 
E)  form of financial capital. 
A)  form of physical capital. 
B)  type of embodied labor. 
C)  nonrenewable natural resource. 
D)  renewable natural resource. 
E)  form of financial capital.

Question 3

-Kevin owns a personal training gym in Laredo,Texas.He charges $41 per session.The above table shows the marginal product of trainers in Kevin's gym.If Kevin hires four trainers,the value of marginal product of the fourth trainer equals

Accepted Answer

A)  10 clients. 
B)  $410. 
C)  $41. 
D)  1 client. 
E)  $10.25. 
A)  10 clients. 
B)  $410. 
C)  $41. 
D)  1 client. 
E)  $10.25.

Question 4

-The table shows information for Jen's Gymnastics.Jen hires coaches and can charge $20 per hour for gymnastics lessons.The value of marginal product for the second coach is ________ because ________.

Accepted Answer

A)  13; 2 coaches can train 13 gymnasts 
B)  6; the second coach can train an extra 6 gymnasts 
C)  $120; the second coach's marginal product is 6 gymnasts and lessons cost $20 
D)  $260; the first two coaches can earn $20 for each of the 13 gymnasts 
E)  $40; each coach can charge $20 per student 
A)  13; 2 coaches can train 13 gymnasts 
B)  6; the second coach can train an extra 6 gymnasts 
C)  $120; the second coach's marginal product is 6 gymnasts and lessons cost $20 
D)  $260; the first two coaches can earn $20 for each of the 13 gymnasts 
E)  $40; each coach can charge $20 per student

Question 5

-The above figure represents the market for teenage workers at fast-food restaurants in Kansas City.
a.What is the equilibrium wage rate and employment?
b.Describe the market at a wage rate of $6 per hour.
c.Describe the market at a wage rate of $12 an hour.
d.How would an increase in the number of young,married college graduates,who tend to eat at fast-food restaurants,affect the figure,the equilibrium wage rate,and employment?

Accepted Answer

a.The equilibrium wage rate is $8 an hou

Question 6

Other things remaining the same,the

Accepted Answer

A)  higher the rental rate of capital, the greater the quantity of capital demanded. 
B)  lower the rental rate of capital, the smaller the quantity of capital demanded. 
C)  higher the rental rate of capital, the smaller the quantity of capital demanded. 
D)  rental rate of capital and the quantity of capital demanded are not related. 
E)  higher the rental rate of capital, the more the demand for capital decreases. 
A)  higher the rental rate of capital, the greater the quantity of capital demanded. 
B)  lower the rental rate of capital, the smaller the quantity of capital demanded. 
C)  higher the rental rate of capital, the smaller the quantity of capital demanded. 
D)  rental rate of capital and the quantity of capital demanded are not related. 
E)  higher the rental rate of capital, the more the demand for capital decreases.

Question 7

Why does an increase in the minimum wage increase the demand for union labor?

Accepted Answer

An increase in the minimum wage raises t

Question 8

The table has the marginal products for workers at Bart's Bats, a baseball bat factory.
-Using the above table,suppose the price of a bat is $3.If the wage rate for a worker in a baseball bat manufacturing plant is $18 an hour,then the firm will hire ________ workers; if the wage rate falls to $12 an hour,then the firm will hire ________.

Accepted Answer

A)  1; 2 
B)  2; 4 
C)  3; 3 
D)  5; 4 
E)  3; 5 
A)  1; 2 
B)  2; 4 
C)  3; 3 
D)  5; 4 
E)  3; 5

Question 9

What tools can unions use to increase the demand for union labor?

Accepted Answer

The main tools that unions use to increa

Question 10

-The table above shows information for Jen's Gymnastics.Jen hires coaches and charges $20 per hour for gymnastics lessons.Using the information in the table,which of the following shows the correct demand for labor for Jen's Gymnastics?

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 11

A surplus of workers occurs

Accepted Answer

A)  when the wage rate exceeds the equilibrium wage rate. 
B)  when the wage rate is less than the equilibrium wage rate. 
C)  at the equilibrium wage rate. 
D)  whenever there is a shortage of goods. 
E)  whenever there is a surplus of goods. 
A)  when the wage rate exceeds the equilibrium wage rate. 
B)  when the wage rate is less than the equilibrium wage rate. 
C)  at the equilibrium wage rate. 
D)  whenever there is a shortage of goods. 
E)  whenever there is a surplus of goods.

Question 12

What is the effect on the supply of low-skilled labor of an increase in the number of people pursuing higher education?

Accepted Answer

A)  It becomes more inelastic. 
B)  The supply of low-skilled labor decreases. 
C)  The supply of low-skilled labor increases. 
D)  It becomes more elastic. 
E)  None of the above answers is correct. 
A)  It becomes more inelastic. 
B)  The supply of low-skilled labor decreases. 
C)  The supply of low-skilled labor increases. 
D)  It becomes more elastic. 
E)  None of the above answers is correct.

Question 13

Sky High Camping offers overnight camping in tree houses built on its 10-acre property.Workers are hired to build and maintain the tree houses.Which of the following are true statements?
i.The land and the trees grown are considered natural resources.
ii.The demand for trees and land is not a derived demand because supply is limited.
iii.The demand for workers is considered a derived demand because they help produce the service of tree house camping.

Accepted Answer

A)  i and iii. 
B)  i, ii and iii. 
C)  i only. 
D)  iii only. 
E)  ii and iii. 
A)  i and iii. 
B)  i, ii and iii. 
C)  i only. 
D)  iii only. 
E)  ii and iii.

Question 14

The value of the marginal product is equal to

Accepted Answer

A)  marginal product × marginal cost. 
B)  marginal product × product price. 
C)  marginal revenue × marginal cost. 
D)  marginal cost × product price. 
E)  marginal product ÷ product price. 
A)  marginal product × marginal cost. 
B)  marginal product × product price. 
C)  marginal revenue × marginal cost. 
D)  marginal cost × product price. 
E)  marginal product ÷ product price.

Question 15

-The above figure shows the demand for labor curve for workers at a Pizza Hut in Canada.If the wage rate is $6 per hour,then the
i.quantity of workers Pizza Hut demands is 10 workers.
ii.Pizza Hut would have been willing to hire the 6th worker even if they had to pay $7 per hour rather than $6 per hour.
iii.value of the marginal product of the 10th worker is $6 per hour.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii

Question 16

If the marginal product of labor increases,the firm's demand for labor curve

Accepted Answer

A)  does not shift, and there is no movement along it. 
B)  shifts leftward. 
C)  shifts rightward. 
D)  does not shift but there is a movement along it. 
E)  might shift leftward or rightward depending on whether the demand for the firm's product is elastic or inelastic. 
A)  does not shift, and there is no movement along it. 
B)  shifts leftward. 
C)  shifts rightward. 
D)  does not shift but there is a movement along it. 
E)  might shift leftward or rightward depending on whether the demand for the firm's product is elastic or inelastic.

Question 17

The total output of candles in Nick's Wicks candle shop increases from 20 per hour to 30 per hour as he hires the second worker.The price of each candle is $2.The

Accepted Answer

A)  marginal product of the second worker is 20 candles. 
B)  marginal product of the second worker is 30 candles. 
C)  value of marginal product of the second worker is $20. 
D)  value of marginal product of the second worker is $30. 
E)  value of marginal product of the second worker is $60. 
A)  marginal product of the second worker is 20 candles. 
B)  marginal product of the second worker is 30 candles. 
C)  value of marginal product of the second worker is $20. 
D)  value of marginal product of the second worker is $30. 
E)  value of marginal product of the second worker is $60.

Question 18

Suppose the Miami Dolphins are considering adding another backup quarterback to their roster.If the salary the Dolphins would have to pay equals $1,000,000 and the value of marginal product of the new quarterback equals $1,200,000,to maximize their profit the Dolphins should

Accepted Answer

A)  add the new quarterback. 
B)  add two new quarterbacks. 
C)  not add the new quarterback. 
D)  not add the new quarterback and, in fact, get rid of at least one other backup quarterback. 
E)  Not enough information is given to determine if the Dolphins should hire the quarterback. 
A)  add the new quarterback. 
B)  add two new quarterbacks. 
C)  not add the new quarterback. 
D)  not add the new quarterback and, in fact, get rid of at least one other backup quarterback. 
E)  Not enough information is given to determine if the Dolphins should hire the quarterback.

Question 19

Entrepreneurship differs from the other factors of production because it

Accepted Answer

A)  is not real. 
B)  is the most important. 
C)  has only existed since the new economy of the 1990s. 
D)  is not traded in a factor market. 
E)  is not paid. 
A)  is not real. 
B)  is the most important. 
C)  has only existed since the new economy of the 1990s. 
D)  is not traded in a factor market. 
E)  is not paid.

Question 20

A natural resource is renewable if it

Accepted Answer

A)  never has to rest. 
B)  can be used repeatedly. 
C)  cannot be replaced once it has been used. 
D)  is available at a price of zero. 
E)  has a perfectly elastic supply. 
A)  never has to rest. 
B)  can be used repeatedly. 
C)  cannot be replaced once it has been used. 
D)  is available at a price of zero. 
E)  has a perfectly elastic supply.

According to the Hotelling Principle,the price of an nonrenewable resource is expected to

Considered as a factor of production,coal is a

-Kevin owns a personal training gym in Laredo,Texas.He charges $41 per session.The above table shows the marginal product of trainers in Kevin's gym.If Kevin hires four trainers,the value of marginal product of the fourth trainer equals

-The table shows information for Jen's Gymnastics.Jen hires coaches and can charge $20 per hour for gymnastics lessons.The value of marginal product for the second coach is because .

Other things remaining the same,the

Why does an increase in the minimum wage increase the demand for union labor?

What tools can unions use to increase the demand for union labor?

-The table above shows information for Jen's Gymnastics.Jen hires coaches and charges $20 per hour for gymnastics lessons.Using the information in the table,which of the following shows the correct demand for labor for Jen's Gymnastics?

A surplus of workers occurs

What is the effect on the supply of low-skilled labor of an increase in the number of people pursuing higher education?

The value of the marginal product is equal to

If the marginal product of labor increases,the firm's demand for labor curve

The total output of candles in Nick's Wicks candle shop increases from 20 per hour to 30 per hour as he hires the second worker.The price of each candle is $2.The

Suppose the Miami Dolphins are considering adding another backup quarterback to their roster.If the salary the Dolphins would have to pay equals $1,000,000 and the value of marginal product of the new quarterback equals $1,200,000,to maximize their profit the Dolphins should

Entrepreneurship differs from the other factors of production because it

A natural resource is renewable if it

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Economic Inequality

Filters

Exam 19: Markets for Factors of Production

According to the Hotelling Principle,the price of an nonrenewable resource is expected to

Considered as a factor of production,coal is a

-Kevin owns a personal training gym in Laredo,Texas.He charges $41 per session.The above table shows the marginal product of trainers in Kevin's gym.If Kevin hires four trainers,the value of marginal product of the fourth trainer equals

-The table shows information for Jen's Gymnastics.Jen hires coaches and can charge $20 per hour for gymnastics lessons.The value of marginal product for the second coach is ________ because ________.

Other things remaining the same,the

Why does an increase in the minimum wage increase the demand for union labor?

What tools can unions use to increase the demand for union labor?

-The table above shows information for Jen's Gymnastics.Jen hires coaches and charges $20 per hour for gymnastics lessons.Using the information in the table,which of the following shows the correct demand for labor for Jen's Gymnastics?

A surplus of workers occurs

What is the effect on the supply of low-skilled labor of an increase in the number of people pursuing higher education?

The value of the marginal product is equal to

If the marginal product of labor increases,the firm's demand for labor curve

The total output of candles in Nick's Wicks candle shop increases from 20 per hour to 30 per hour as he hires the second worker.The price of each candle is $2.The

Suppose the Miami Dolphins are considering adding another backup quarterback to their roster.If the salary the Dolphins would have to pay equals $1,000,000 and the value of marginal product of the new quarterback equals $1,200,000,to maximize their profit the Dolphins should

Entrepreneurship differs from the other factors of production because it

A natural resource is renewable if it

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Economic Inequality

Filters

-The table shows information for Jen's Gymnastics.Jen hires coaches and can charge $20 per hour for gymnastics lessons.The value of marginal product for the second coach is because .