Question 1

Table 18-1 
-Refer to Table 18-1. What is the marginal product of the second worker?

Accepted Answer

A) 8 
B) 9 
C) 10 
D) 18

Question 2

Table 18-1 
-Refer to Table 18-1. What is the marginal product of the fourth worker?

Accepted Answer

A) 5 
B) 7.5 
C) 8 
D) 30

Question 3

Table 18-B
Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. 
-Refer to Table 18-11. What is the marginal profit of the sixth worker?

Accepted Answer

A) $100 
B) −$50 
C) −$75 
D) −$125

Question 4

Suppose that the labor market for life guards is initially in equilibrium. Then swimming pool owners adopt a new labor-saving technology that uses computers to monitor the locations of swimmers in the pool. What happens to the equilibrium wage and quantity of life guards?

Accepted Answer

A) Both the equilibrium wage and quantity increase. 
B) Both the equilibrium wage and quantity decrease. 
C) The equilibrium wage increases, and the equilibrium quantity decreases. 
D) The equilibrium wage decreases, and the equilibrium quantity increases.

Question 5

Which of the following is correct? Using data from 2014,

Accepted Answer

A) immigrants (both legal and illegal) make up about 40 percent of the U.S. population. 
B) low-skilled immigration lowers the earnings of all workers in the United States by about 15 percent. 
C) illegal immigrants make up about 20 percent of the U.S. workforce. 
D) over 80 percent of immigrants are from Latin America and Asia.

Question 6

The demand for computer programmers is inseparably tied to the supply of computer software.

Accepted Answer

A) True 
 B)False

Question 7

Figure 18-6 
-Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers decrease, what happens in the market for bread bakers?

Accepted Answer

A) Demand increases from D1 to D2. 
B) Demand decreases from D2 to D1. 
C) Supply increases from S1 to S2. 
D) Supply decreases from S2 to S1.

Question 8

For a snow-removal business, the capital stock would include inputs such as snow blowers and shovels.

Accepted Answer

A) True 
 B)False

Question 9

Because a firm's demand for a factor of production is derived from its decision to supply a good in the market, it is called a

Accepted Answer

A) marginal product of demand. 
B) secondary demand. 
C) derived demand. 
D) compensatory demand.

Question 10

Scenario 18-5
Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada.
-Refer to Scenario 18-5. In the labor market in southern Canada, the equilibrium wage

Accepted Answer

A) and the equilibrium quantity of labor will rise. 
B) and the equilibrium quantity of labor will fall. 
C) will rise, and the equilibrium quantity of labor will fall. 
D) will fall, and the equilibrium quantity of labor will rise.

Question 11

Table 18-B
Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. 
-Refer to Table 18-11. What is the value of the marginal product of the fifth worker?

Accepted Answer

A) $120 
B) $240 
C) $300 
D) $1,600

Question 12

Figure 18-9 
-Refer to Figure 18-9. If the price of apples decreases, the equilibrium wage will

Accepted Answer

A) increase, and more apple pickers will be hired. 
B) decrease, and more apple pickers will be hired. 
C) increase, and fewer apple pickers will be hired. 
D) decrease, and fewer apple pickers will be hired.

Question 13

Consider the market for university economics professors. Suppose the opportunity cost of going to graduate school to get a Ph.D. in economics decreases for many individuals. Suppose it generally takes about five years to get a Ph.D. in economics. Holding all else constant, in five years the equilibrium wage for university economics professors will

Accepted Answer

A) increase. 
B) decrease. 
C) not change. 
D) It is not possible to determine what will happen to the equilibrium wage.

Question 14

Figure 18-1
On the graph, L represents the quantity of labor and Q represents the quantity of output per week. 
-Refer to Figure 18-1. Suppose the firm sells its output for $25 per unit, and it pays each of its workers $1,000 per week. Also, the firm's non-labor costs are fixed and they amount to $2,000. The firm maximizes profit by hiring

Accepted Answer

A) 2 workers. 
B) 3 workers. 
C) 4 workers. 
D) 5 workers.

Question 15

The rental price of land is

Accepted Answer

A) the price paid for ownership of the land. 
B) the price paid for the flow of services from land over a specified time period. 
C) always more than the purchase price. 
D) All of the above are correct.

Question 16

Which of the following accurately describes how earnings from capital eventually get paid to households?

Accepted Answer

A) Households can own a stock of capital and rent it to firms. 
B) Households lend money to firms, who then pay interest to the households. 
C) Households that own stock in firms receive dividends. 
D) All of the above are correct.

Question 17

Sunshine's Organic Market sells organic produce. Assume that labor is the only input that varies for the firm. The store manager has determined that if she hires 12 workers, the store can sell 300 pounds of produce per day. If she hires 13 workers, the store can sell 370 pounds of produce per day. The store earns $4 for each pound of produce that it sells, and the manager pays each worker $80 per day. Assuming no changes in either the daily wages paid to store workers or the price at which the store sells its produce, what is the minimum number of sales that would allow the firm to increase its profits by hiring a 14th worker?

Accepted Answer

A) 374 pounds per day 
B) 380 pounds per day 
C) 390 pounds per day 
D) 450 pounds per day

Question 18

Bill is a laborer. What is the relationship between Bill's wage and his opportunity cost of an hour of leisure?

Accepted Answer

The answer of Bill is a laborer. What is the...

Question 19

Oil field workers' wages are directly tied to the world price of oil.

Accepted Answer

A) True 
 B)False

Question 20

The labor-supply curve is affected by the trade-off between labor and leisure.

Accepted Answer

A) True 
 B)False

Exam 18: The Markets for the Factors of Production

Table 18-1 -Refer to Table 18-1. What is the marginal product of the second worker?

Table 18-1 -Refer to Table 18-1. What is the marginal product of the fourth worker?

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the marginal profit of the sixth worker?

Suppose that the labor market for life guards is initially in equilibrium. Then swimming pool owners adopt a new labor-saving technology that uses computers to monitor the locations of swimmers in the pool. What happens to the equilibrium wage and quantity of life guards?

Which of the following is correct? Using data from 2014,

The demand for computer programmers is inseparably tied to the supply of computer software.

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers decrease, what happens in the market for bread bakers?

For a snow-removal business, the capital stock would include inputs such as snow blowers and shovels.

Because a firm's demand for a factor of production is derived from its decision to supply a good in the market, it is called a

Scenario 18-5 Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada. -Refer to Scenario 18-5. In the labor market in southern Canada, the equilibrium wage

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the value of the marginal product of the fifth worker?

Figure 18-9 -Refer to Figure 18-9. If the price of apples decreases, the equilibrium wage will

The rental price of land is

Which of the following accurately describes how earnings from capital eventually get paid to households?

Bill is a laborer. What is the relationship between Bill's wage and his opportunity cost of an hour of leisure?

Oil field workers' wages are directly tied to the world price of oil.

The labor-supply curve is affected by the trade-off between labor and leisure.