Question 1

Which of the following statements is true?

Accepted Answer

A)  A perfectly competitive firm operates in a market where marginal revenues are greater than the price. 
B)  A perfectly competitive firm operates in a market where marginal revenues are less than the price. 
C)  A monopolist operates in a market where marginal revenues are greater than the price. 
D)  A monopolist operates in a market where marginal revenues are less than the price. 
E)  A monopolist operates in a market where marginal revenues are equal to the price. 
A)  A perfectly competitive firm operates in a market where marginal revenues are greater than the price. 
B)  A perfectly competitive firm operates in a market where marginal revenues are less than the price. 
C)  A monopolist operates in a market where marginal revenues are greater than the price. 
D)  A monopolist operates in a market where marginal revenues are less than the price. 
E)  A monopolist operates in a market where marginal revenues are equal to the price. D

Question 2

The difference between a firm's revenues and its total costs,including forgoing the next best alternative,is called

Accepted Answer

A)  accounting profits. 
B)  economic profits. 
C)  opportunity costs. 
D)  normal profits. 
E)  economic rent. 
A)  accounting profits. 
B)  economic profits. 
C)  opportunity costs. 
D)  normal profits. 
E)  economic rent. B

Question 3

Suppose the firm operates in a competitive market.What is the equilibrium level of employment?

Accepted Answer

A)  20 workers 
B)  40 workers 
C)  80 workers 
D)  90 workers 
E)  100 workers 
A)  20 workers 
B)  40 workers 
C)  80 workers 
D)  90 workers 
E)  100 workers D

Question 4

A monopsonist's optimal employment level and wage rate are such that

Accepted Answer

A)  MRP of labor equals the MC of labor,where the MC of labor is the elastically set wage. 
B)  MRP of labor is greater than the MC of labor,where the MC of labor is the elastically set wage. 
C)  MRP of labor equals the MC of labor,and that optimal level of labor is plugged into the wage requirement schedule to calculate the optimal wage. 
D)  MRP of labor is greater than the MC of labor,and that optimal level of labor is plugged into the wage requirement schedule to calculate the optimal wage. 
E)  none of the above 
A)  MRP of labor equals the MC of labor,where the MC of labor is the elastically set wage. 
B)  MRP of labor is greater than the MC of labor,where the MC of labor is the elastically set wage. 
C)  MRP of labor equals the MC of labor,and that optimal level of labor is plugged into the wage requirement schedule to calculate the optimal wage. 
D)  MRP of labor is greater than the MC of labor,and that optimal level of labor is plugged into the wage requirement schedule to calculate the optimal wage. 
E)  none of the above

Question 5

What is the restaurant's economic profit?

Accepted Answer

A)  $50 
B)  $150 
C)  $200 
D)  $300 
E)  $350 
A)  $50 
B)  $150 
C)  $200 
D)  $300 
E)  $350

Question 6

Monopsony power may occur when:

Accepted Answer

A)  the supply of labor is perfectly elastic. 
B)  there are psychic costs of moving across locations. 
C)  workers have perfect information about employment opportunities. 
D)  workers can switch employers instantly. 
E)  workers have full information about wages offered by all employers. 
A)  the supply of labor is perfectly elastic. 
B)  there are psychic costs of moving across locations. 
C)  workers have perfect information about employment opportunities. 
D)  workers can switch employers instantly. 
E)  workers have full information about wages offered by all employers.

Question 7

If wages are $3,the number of workers the firm will hire to maximize profits is

Accepted Answer

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

Question 8

In the short run,

Accepted Answer

A)  firms can adjust level capital and labor. 
B)  firms can adjust the level of capital but not labor. 
C)  firms can adjust the level of labor but not capital. 
D)  firms can not adjust capital or labor. 
E)  wages and product prices cannot change. 
A)  firms can adjust level capital and labor. 
B)  firms can adjust the level of capital but not labor. 
C)  firms can adjust the level of labor but not capital. 
D)  firms can not adjust capital or labor. 
E)  wages and product prices cannot change.

Question 9

Suppose there is a perfectly competitive firm that has hired 200 workers.Suppose wages equal $15 per hour and the marginal revenue product of labor is $20.What should the firm do in order to reach the profit-maximizing level of production?

Accepted Answer

A)  Hire more workers till MRP = MC. 
B)  Keep the same number of workers. 
C)  Fire workers until MRP = MC. 
D)  Lay off the less efficient workers. 
E)  C and D 
A)  Hire more workers till MRP = MC. 
B)  Keep the same number of workers. 
C)  Fire workers until MRP = MC. 
D)  Lay off the less efficient workers. 
E)  C and D

Question 10

The marginal product of labor tells us

Accepted Answer

A)  which workers are least efficient. 
B)  the additional output an additional worker will add. 
C)  the increase in average output an additional worker will contribute. 
D)  the effect an additional worker will have on a firm's accounting profits. 
E)  the effect an additional worker will have on a firm's economic profits. 
A)  which workers are least efficient. 
B)  the additional output an additional worker will add. 
C)  the increase in average output an additional worker will contribute. 
D)  the effect an additional worker will have on a firm's accounting profits. 
E)  the effect an additional worker will have on a firm's economic profits.

Question 11

The short run production function is concave because

Accepted Answer

A)  hiring more employees is always more efficient for the firm. 
B)  the best employees are hired first,so the quality of employees decreases as more workers are added. 
C)  it is harder for a firm to manage a higher level of capital. 
D)  the level of capital can be adjusted. 
E)  hiring more workers,holding capital fixed,leads to overcrowding. 
A)  hiring more employees is always more efficient for the firm. 
B)  the best employees are hired first,so the quality of employees decreases as more workers are added. 
C)  it is harder for a firm to manage a higher level of capital. 
D)  the level of capital can be adjusted. 
E)  hiring more workers,holding capital fixed,leads to overcrowding.

Question 12

What is the marginal product of labor of the third worker?

Accepted Answer

A)  3 
B)  4 
C)  6 
D)  8 
E)  14 
A)  3 
B)  4 
C)  6 
D)  8 
E)  14

Question 13

A monopolist's short run labor demand curve

Accepted Answer

A)  is always equal to the firm's long run labor demand curve. 
B)  is above the marginal product of labor curve. 
C)  is below the marginal product of labor curve. 
D)  equals the marginal product of labor curve. 
E)  is always half the firm's long run labor demand curve. 
A)  is always equal to the firm's long run labor demand curve. 
B)  is above the marginal product of labor curve. 
C)  is below the marginal product of labor curve. 
D)  equals the marginal product of labor curve. 
E)  is always half the firm's long run labor demand curve.

Question 14

What would be the optimal level of employment if a union came in and set a minimum wage at $30?

Accepted Answer

A)  30 workers 
B)  50 workers 
C)  60 workers 
D)  80 workers 
E)  90 workers 
A)  30 workers 
B)  50 workers 
C)  60 workers 
D)  80 workers 
E)  90 workers

Question 15

When a firm moves to a lower isoquant,it is always true that

Accepted Answer

A)  the utility of the owner decreases. 
B)  the utility of the workers decreases. 
C)  the firm produces less output. 
D)  the firm produces more output. 
E)  the firm uses less capital. 
A)  the utility of the owner decreases. 
B)  the utility of the workers decreases. 
C)  the firm produces less output. 
D)  the firm produces more output. 
E)  the firm uses less capital.

Question 16

A competitive firm's short run labor demand curve

Accepted Answer

A)  is always equal to the firm's long run labor demand curve. 
B)  is above the marginal product of labor curve. 
C)  is below the marginal product of labor curve. 
D)  equals the marginal product of labor curve. 
E)  is always half the firm's long run labor demand curve. 
A)  is always equal to the firm's long run labor demand curve. 
B)  is above the marginal product of labor curve. 
C)  is below the marginal product of labor curve. 
D)  equals the marginal product of labor curve. 
E)  is always half the firm's long run labor demand curve.

Question 17

Suppose labor and capital are gross substitutes.If the capital stock increases,what happens to the marginal product of labor curve and the equilibrium level of employment?

Accepted Answer

A)  The marginal product of labor will shift to the right,and employment will increase. 
B)  The marginal product of labor will shift to the right,and employment will decrease. 
C)  The marginal product of labor will shift to the left,and employment will increase. 
D)  The marginal product of labor will shift to the left,and employment will decrease. 
E)  The marginal product of labor will shift to the right,and employment will remain the same. 
A)  The marginal product of labor will shift to the right,and employment will increase. 
B)  The marginal product of labor will shift to the right,and employment will decrease. 
C)  The marginal product of labor will shift to the left,and employment will increase. 
D)  The marginal product of labor will shift to the left,and employment will decrease. 
E)  The marginal product of labor will shift to the right,and employment will remain the same.

Question 18

If a firm is producing at the level of output where the marginal product of labor is greater than the marginal cost of labor (the wage),then

Accepted Answer

A)  profits will increase if the firm hires more workers. 
B)  profits will increase if the firm fires some workers. 
C)  the firm always has negative economic rent. 
D)  the accounting profits are always greater than the economic profits. 
E)  the firm is maximizing profits. 
A)  profits will increase if the firm hires more workers. 
B)  profits will increase if the firm fires some workers. 
C)  the firm always has negative economic rent. 
D)  the accounting profits are always greater than the economic profits. 
E)  the firm is maximizing profits.

Question 19

Which of the following is not true about a monopolist?

Accepted Answer

A)  A monopolist earns economic rents or supernormal profits. 
B)  A monopolist's accounting profits are greater than its normal profits. 
C)  A monopolist demands less labor than a competitive firm. 
D)  A monopolist pays its workers more than the competitive wage rate. 
E)  A monopolist pays its workers the competitive wage rate. 
A)  A monopolist earns economic rents or supernormal profits. 
B)  A monopolist's accounting profits are greater than its normal profits. 
C)  A monopolist demands less labor than a competitive firm. 
D)  A monopolist pays its workers more than the competitive wage rate. 
E)  A monopolist pays its workers the competitive wage rate.

Question 20

What would be the optimal level of employment if a union came in and set a minimum wage at $60?

Accepted Answer

A)  30 workers. 
B)  50 workers. 
C)  60 workers. 
D)  80 workers. 
E)  90 workers. 
A)  30 workers. 
B)  50 workers. 
C)  60 workers. 
D)  80 workers. 
E)  90 workers.

Which of the following statements is true?

The difference between a firm's revenues and its total costs,including forgoing the next best alternative,is called

Suppose the firm operates in a competitive market.What is the equilibrium level of employment?

A monopsonist's optimal employment level and wage rate are such that

What is the restaurant's economic profit?

Monopsony power may occur when:

If wages are $3,the number of workers the firm will hire to maximize profits is

In the short run,

Suppose there is a perfectly competitive firm that has hired 200 workers.Suppose wages equal $15 per hour and the marginal revenue product of labor is $20.What should the firm do in order to reach the profit-maximizing level of production?

The marginal product of labor tells us

The short run production function is concave because

What is the marginal product of labor of the third worker?

A monopolist's short run labor demand curve

What would be the optimal level of employment if a union came in and set a minimum wage at $30?

When a firm moves to a lower isoquant,it is always true that

A competitive firm's short run labor demand curve

Suppose labor and capital are gross substitutes.If the capital stock increases,what happens to the marginal product of labor curve and the equilibrium level of employment?

If a firm is producing at the level of output where the marginal product of labor is greater than the marginal cost of labor (the wage),then

Which of the following is not true about a monopolist?

What would be the optimal level of employment if a union came in and set a minimum wage at $60?

Introduction

The Uslabor Market

The Supply of Labor

Human Capital

On-The-Job Training

Competitive Equilibrium

Policy Application: the Minimum Wage

Policy Application: the War on Poverty

Death and Injury in the Usworkplace-A Hedonic Analysis

Discrimination I: Theory

Discrimination Ii: Evidence and Policy

The Hiring Process

Incentives

Tasks,technologies,and Organizational Design

Careers and the Employment Relation

The Long Run Demand for Labor and Adjustment Costs

Filters

Exam 3: The Short Run Demand for Labor

Which of the following statements is true?

The difference between a firm's revenues and its total costs,including forgoing the next best alternative,is called

Suppose the firm operates in a competitive market.What is the equilibrium level of employment?

A monopsonist's optimal employment level and wage rate are such that

What is the restaurant's economic profit?

Monopsony power may occur when:

If wages are $3,the number of workers the firm will hire to maximize profits is

In the short run,

Suppose there is a perfectly competitive firm that has hired 200 workers.Suppose wages equal $15 per hour and the marginal revenue product of labor is $20.What should the firm do in order to reach the profit-maximizing level of production?

The marginal product of labor tells us

The short run production function is concave because

What is the marginal product of labor of the third worker?

A monopolist's short run labor demand curve

What would be the optimal level of employment if a union came in and set a minimum wage at $30?

When a firm moves to a lower isoquant,it is always true that

A competitive firm's short run labor demand curve

Suppose labor and capital are gross substitutes.If the capital stock increases,what happens to the marginal product of labor curve and the equilibrium level of employment?

If a firm is producing at the level of output where the marginal product of labor is greater than the marginal cost of labor (the wage),then

Which of the following is not true about a monopolist?

What would be the optimal level of employment if a union came in and set a minimum wage at $60?

Introduction

The Uslabor Market

The Supply of Labor

Human Capital

On-The-Job Training

Competitive Equilibrium

Policy Application: the Minimum Wage

Policy Application: the War on Poverty

Death and Injury in the Usworkplace-A Hedonic Analysis

Discrimination I: Theory

Discrimination Ii: Evidence and Policy

The Hiring Process

Incentives

Tasks,technologies,and Organizational Design

Careers and the Employment Relation

The Long Run Demand for Labor and Adjustment Costs

Filters