Question 1

When a labor market experiences a surplus of labor, there is downward pressure on

Accepted Answer

A) the supply of labor. 
B) the final product price. 
C) wages. 
D) the demand for labor.

Question 2

Over the last 60 or so years, the percentage of women with paid jobs has increased significantly. Is this increase in female employment associated with an increase in the demand for labor, or is it associated with an increase in the supply of labor?

Accepted Answer

The answer of Over the last 60 or so years,...

Question 3

Consider the labor market for computer programmers. During the late 1990s, the value of the marginal product of all computer programmers increased dramatically. Holding all else equal, what effect did this process have on the labor market for computer programmers? The equilibrium wage

Accepted Answer

A) increased, and the equilibrium quantity of labor increased. 
B) increased, and the equilibrium quantity of labor decreased. 
C) decreased, and the equilibrium quantity of labor increased. 
D) decreased, and the equilibrium quantity of labor decreased.

Question 4

Table 18-6
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.
​
​
 $$\begin{array} { | c | c | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Labor } \
\text { (Number of } \
\text { workers) }
\end{array} & \begin{array} { c } 
\text { Output } \
\text { (Cupcakes per } \
\text { day) }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { Product } \
\text { of Labor } \
\text { (Cupcakes per } \
\text { day) }
\end{array} & \begin{array} { c } 
\text { Value of the } \
\text { Marginal } \
\text { Product of Labor } \
\text { (Cupcakes) }
\end{array} & \begin{array} { c } 
\text { Wage } \
\text { (Dollarsper } \
\text { worker per } \
\text { day) }
\end{array} & \begin{array} { c } 
\text { Margin } \
\text { Profit } \
\text { (Dollar }
\end{array} \
\hline 0 & 0 & & & 325 & \
\hline 1 & 200 & & & 325 & \
\hline 2 & 350 & & & 325 & \
\hline 3 & 475 & & & 325 & \
\hline 4 & 575 & & &325 & \
\hline
\end{array}$$ ​
-Refer to Table 18-6. The marginal product of labor begins to diminish with the addition of which worker?

Accepted Answer

A) The 1st worker 
B) The 2nd worker 
C) The 3rd worker 
D) The 4th worker

Question 5

Scenario 18-4
Suppose that workers from northern Minnesota, North Dakota, and Montana decide to immigrate to southern Canada.
-Refer to Scenario 18-4. 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 6

When a firm decides to retain its earnings instead of paying dividends, the stockholders necessarily suffer.

Accepted Answer

A) True 
 B)False

Question 7

Among the people who are characterized below, who has the highest opportunity cost of leisure?

Accepted Answer

A) An electrical engineer who earns $195 per hour and who plays golf during her leisure time 
B) A CEO who earns $225 per hour and who sleeps during his leisure time 
C) A retail clerk who earns $18 per hour and who watches TV during her leisure time 
D) A waiter who earns $14 per hour and who reads poetry during his leisure time

Question 8

Table 18-3
​
​
 
-Refer to Table 18-3. Which firm's production function exhibits positive but diminishing marginal product?

Accepted Answer

A) Firm A 
B) Firm B 
C) Firm C 
D) Firm D

Question 9

A firm's demand for labor is derived from its decision to supply a good in another market.

Accepted Answer

A) True 
 B)False

Question 10

A firm hires some number of custodians to clean a large warehouse. When only a few custodians are hired, they can quickly find and remove a lot of dust and debris. As the number of custodians increases, additional custodians have to go to greater lengths and spend more time to find and remove additional dust and debris. What property of production functions is relevant to the custodians' situation?

Accepted Answer

The answer of A firm hires some number of custodians...

Question 11

From 1960 to 2015, inflation-adjusted wages increased by 165 percent in the U.S., and yet firms more than doubled the amount of labor they employed.

Accepted Answer

A) True 
 B)False

Question 12

If the value of the marginal product of labor exceeds the wage, then hiring another worker

Accepted Answer

A) decreases the firm's total output. 
B) decreases the firm's total cost. 
C) decreases the firm's total revenue. 
D) increases the firm's profit.

Question 13

Figure 18-5 
-Refer to Figure 18-5. When the relevant labor supply curve is S1, and the labor market is in equilibrium, the

Accepted Answer

A) wage is W2. 
B) opportunity cost of leisure to workers is W2. 
C) marginal product of labor to firms is W1. 
D) value of the marginal product of labor to firms is W1.

Question 14

Figure 18-8
The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop.
  ​
-Refer to Figure 18-8. What is the marginal product of the second mechanic?

Accepted Answer

The answer of Figure 18-8
The figure shows the relationship between...

Question 15

Suppose the prices of agricultural products such as corn and soybeans increase. What is the effect of these price increases on the marginal product of the 1,000^th farm worker? What is the effect on the value of the marginal product of the 1,000^th farm worker?

Accepted Answer

The answer of Suppose the prices of agricultural products such...

Question 16

Growth in real wage rates is closely tied to growth in labor productivity.

Accepted Answer

A) True 
 B)False

Question 17

An increase in the wages paid to high-school student who detassle corn will increase the labor supply of high-school students who weed soybean fields, all else equal.

Accepted Answer

A) True 
 B)False

Question 18

Assume the market for candles is competitive. A decrease in the market price of candles

Accepted Answer

A) decreases the demand for workers who make candles and decreases their equilibrium wage. 
B) decreases the demand for workers who make candles and increases their equilibrium wage. 
C) increases the demand for workers who make candles and decreases their equilibrium wage. 
D) increases the demand for workers who make candles and increases their equilibrium wage.

Question 19

Figure 18-8
The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop.
  ​
-Refer to Figure 18-8. If the shop charges $150 per repair, then what is the value of the marginal product of the second mechanic?

Accepted Answer

The answer of Figure 18-8
The figure shows the relationship between...

Question 20

For profit-maximizing, competitive firms, the demand curve for each factor of production equals the value of the marginal product of that factor.

Accepted Answer

A) True 
 B)False

Exam 18: The Markets for the Factors of Production

When a labor market experiences a surplus of labor, there is downward pressure on

Over the last 60 or so years, the percentage of women with paid jobs has increased significantly. Is this increase in female employment associated with an increase in the demand for labor, or is it associated with an increase in the supply of labor?

Consider the labor market for computer programmers. During the late 1990s, the value of the marginal product of all computer programmers increased dramatically. Holding all else equal, what effect did this process have on the labor market for computer programmers? The equilibrium wage

Scenario 18-4 Suppose that workers from northern Minnesota, North Dakota, and Montana decide to immigrate to southern Canada. -Refer to Scenario 18-4. In the labor market in southern Canada, the equilibrium wage

When a firm decides to retain its earnings instead of paying dividends, the stockholders necessarily suffer.

Among the people who are characterized below, who has the highest opportunity cost of leisure?

Table 18-3 -Refer to Table 18-3. Which firm's production function exhibits positive but diminishing marginal product?

A firm's demand for labor is derived from its decision to supply a good in another market.

From 1960 to 2015, inflation-adjusted wages increased by 165 percent in the U.S., and yet firms more than doubled the amount of labor they employed.

If the value of the marginal product of labor exceeds the wage, then hiring another worker

Figure 18-5 -Refer to Figure 18-5. When the relevant labor supply curve is S₁, and the labor market is in equilibrium, the

Figure 18-8 The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. -Refer to Figure 18-8. What is the marginal product of the second mechanic?

Suppose the prices of agricultural products such as corn and soybeans increase. What is the effect of these price increases on the marginal product of the 1,000^th farm worker? What is the effect on the value of the marginal product of the 1,000^th farm worker?

Growth in real wage rates is closely tied to growth in labor productivity.

An increase in the wages paid to high-school student who detassle corn will increase the labor supply of high-school students who weed soybean fields, all else equal.

Assume the market for candles is competitive. A decrease in the market price of candles

Figure 18-8 The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. -Refer to Figure 18-8. If the shop charges $150 per repair, then what is the value of the marginal product of the second mechanic?

For profit-maximizing, competitive firms, the demand curve for each factor of production equals the value of the marginal product of that factor.

Exam 18: The Markets for the Factors of Production

When a labor market experiences a surplus of labor, there is downward pressure on

Over the last 60 or so years, the percentage of women with paid jobs has increased significantly. Is this increase in female employment associated with an increase in the demand for labor, or is it associated with an increase in the supply of labor?

Consider the labor market for computer programmers. During the late 1990s, the value of the marginal product of all computer programmers increased dramatically. Holding all else equal, what effect did this process have on the labor market for computer programmers? The equilibrium wage

Scenario 18-4 Suppose that workers from northern Minnesota, North Dakota, and Montana decide to immigrate to southern Canada. -Refer to Scenario 18-4. In the labor market in southern Canada, the equilibrium wage

When a firm decides to retain its earnings instead of paying dividends, the stockholders necessarily suffer.

Among the people who are characterized below, who has the highest opportunity cost of leisure?

Table 18-3 ​ ​ -Refer to Table 18-3. Which firm's production function exhibits positive but diminishing marginal product?

A firm's demand for labor is derived from its decision to supply a good in another market.

From 1960 to 2015, inflation-adjusted wages increased by 165 percent in the U.S., and yet firms more than doubled the amount of labor they employed.

If the value of the marginal product of labor exceeds the wage, then hiring another worker

Figure 18-5 -Refer to Figure 18-5. When the relevant labor supply curve is S1, and the labor market is in equilibrium, the

Figure 18-8 The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. ​ -Refer to Figure 18-8. What is the marginal product of the second mechanic?

Suppose the prices of agricultural products such as corn and soybeans increase. What is the effect of these price increases on the marginal product of the 1,000th farm worker? What is the effect on the value of the marginal product of the 1,000th farm worker?

Growth in real wage rates is closely tied to growth in labor productivity.

An increase in the wages paid to high-school student who detassle corn will increase the labor supply of high-school students who weed soybean fields, all else equal.

Assume the market for candles is competitive. A decrease in the market price of candles

Figure 18-8 The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. ​ -Refer to Figure 18-8. If the shop charges $150 per repair, then what is the value of the marginal product of the second mechanic?

For profit-maximizing, competitive firms, the demand curve for each factor of production equals the value of the marginal product of that factor.

Table 18-3 -Refer to Table 18-3. Which firm's production function exhibits positive but diminishing marginal product?

Figure 18-5 -Refer to Figure 18-5. When the relevant labor supply curve is S₁, and the labor market is in equilibrium, the

Figure 18-8 The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. -Refer to Figure 18-8. What is the marginal product of the second mechanic?

Suppose the prices of agricultural products such as corn and soybeans increase. What is the effect of these price increases on the marginal product of the 1,000^th farm worker? What is the effect on the value of the marginal product of the 1,000^th farm worker?

Figure 18-8 The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. -Refer to Figure 18-8. If the shop charges $150 per repair, then what is the value of the marginal product of the second mechanic?