Question 1

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 2

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,what effect does this have on the labor market for health care employees?

Accepted Answer

A)  The equilibrium wage increases and the equilibrium quantity of labor increases. 
B)  The equilibrium wage increases and the equilibrium quantity of labor decreases. 
C)  The equilibrium wage decreases and the equilibrium quantity of labor increases. 
D)  The equilibrium wage decreases and the equilibrium quantity of labor decreases.

Question 3

Figure 18-3
The figure below shows the production function for a particular firm. 
-Refer to Figure 18-3.The marginal product of the third worker is

Accepted Answer

A)  20 units. 
B)  30 units. 
C)  40 units. 
D)  70 units.

Question 4

When a competitive firm hires labor up to the point at which the value of the marginal product of labor equals the wage,it also produces up to the point at which the price of output equals average variable cost.

Accepted Answer

A) True 
 B)False

Question 5

The value of the marginal product of labor is calculated by multiplying the

Accepted Answer

A)  price of output by the quantity of labor. 
B)  price of output by the marginal product of labor. 
C)  wage by the quantity of labor. 
D)  wage by the marginal product of labor.

Question 6

Immigration of workers into the United States is often an important source of

Accepted Answer

A)  increases in the demand for labor in the United States. 
B)  decreases in the demand for labor in the United States. 
C)  increases in the supply of labor in the United States. 
D)  decreases in the supply of labor in the United States.

Question 7

Which of the following events would bring about a change in the value of the marginal product of labor?

Accepted Answer

A)  Technological progress 
B)  A change in the marginal product of labor 
C)  A change in the price of the product that the firm sells 
D)  All of the above are correct.

Question 8

When economists refer to a firm's capital,they are likely to be using the term to describe the

Accepted Answer

A)  markets for final goods and services. 
B)  stock of equipment and buildings used in production. 
C)  amount of bank financing used by the firm. 
D)  amount of financing provided by the equity markets.

Question 9

The demand curve for capital

Accepted Answer

A)  is vertical. 
B)  is horizontal. 
C)  is derived from households' decisions concerning saving and spending. 
D)  reflects the marginal productivity of capital.

Question 10

The production function is the

Accepted Answer

A)  increase in the amount of output from an additional unit of labor. 
B)  marginal product of an input times the price of output. 
C)  relationship between the quantity of inputs and output. 
D)  shift in labor demand caused by a change in the price of output.

Question 11

What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

Accepted Answer

A)  Labor supply decreases in Mexico and decreases in the United States. 
B)  Labor supply increases in the United States and increases in Mexico. 
C)  Labor supply increases in the United States and decreases in Mexico. 
D)  Labor supply increases in Mexico and decreases in United States.

Question 12

The marginal product of labor is defined as the change in

Accepted Answer

A)  output per additional unit of revenue. 
B)  output per additional unit of labor. 
C)  revenue per additional unit of labor. 
D)  revenue per additional unit of output.

Question 13

Figure 18-7 
-Refer to Figure 18-7.The shift of the labor supply curve from S1 to S2 could possibly be explained by

Accepted Answer

A)  a change in workers' attitudes toward the work-leisure tradeoff. 
B)  decreases in wages in other labor markets. 
C)  immigration of workers into the region or country. 
D)  All of the above are correct.

Question 14

Table 18-2
The following table shows the production function for a particular business.The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis.
 
-Refer to Table 18-2.Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day.How many workers should this firm hire to maximize its profit?

Accepted Answer

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

Question 15

The value of the marginal product of labor can be calculated as the price of the final good minus the marginal product of labor.

Accepted Answer

A) True 
 B)False

Question 16

Capital is paid according to the value of its marginal product

Accepted Answer

A)  only if earnings from capital are paid to households in the form of dividends. 
B)  only if earnings from capital are kept within firms as retained earnings. 
C)  regardless of whether earnings from capital are paid to households in the form of dividends or whether those earnings are kept within firms as retained earnings. 
D)  None of the above are correct;capital is a factor of production for which earnings are unrelated to the value of marginal product.

Question 17

Which of the following best illustrates the concept of "derived demand?"

Accepted Answer

A)  An increase in the wages of auto workers will lead to an increase in the demand for robots in automobile factories. 
B)  An automobile producer's decision to supply more cars will lead to an increase in the demand for automobile production workers. 
C)  An automobile producer's decision to supply more minivans results from a decrease in the demand for station wagons. 
D)  An increase in the price of gasoline will lead to an increase in the demand for small cars.

Question 18

Scenario 18-2
Gertrude Kelp owns three boats that participate in commercial fishing for fresh Pacific salmon off the coast of Alaska.As part of her business she hires a captain and several crew members for each boat.In the market for fresh Pacific salmon,there are thousands of firms like Gertrude's.While Gertrude usually catches a significant number of fish each year,her contribution to the entire harvest of salmon is negligible relative to the size of the market.
-Refer to Scenario 18-2.In the fresh Pacific salmon product market,Gertrude has some control over

Accepted Answer

A)  the price she charges for her fresh salmon. 
B)  the quantity of fresh salmon that she supplies to the market. 
C)  the competitive environment of the market. 
D)  the supply of labor in the market.

Question 19

In general,less productive workers are paid less than more productive workers.

Accepted Answer

A) True 
 B)False

Question 20

Table 18-6
 
-Refer to Table 18-6.The price of output is

Accepted Answer

A)  $1. 
B)  $2. 
C)  $3. 
D)  $400.

Exam 18: The Markets for the Factors of Production

The rental price of land is

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,what effect does this have on the labor market for health care employees?

Figure 18-3 The figure below shows the production function for a particular firm. -Refer to Figure 18-3.The marginal product of the third worker is

When a competitive firm hires labor up to the point at which the value of the marginal product of labor equals the wage,it also produces up to the point at which the price of output equals average variable cost.

The value of the marginal product of labor is calculated by multiplying the

Immigration of workers into the United States is often an important source of

Which of the following events would bring about a change in the value of the marginal product of labor?

When economists refer to a firm's capital,they are likely to be using the term to describe the

The demand curve for capital

The production function is the

What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

The marginal product of labor is defined as the change in

Figure 18-7 -Refer to Figure 18-7.The shift of the labor supply curve from S₁ to S₂ could possibly be explained by

The value of the marginal product of labor can be calculated as the price of the final good minus the marginal product of labor.

Capital is paid according to the value of its marginal product

Which of the following best illustrates the concept of "derived demand?"

In general,less productive workers are paid less than more productive workers.

Table 18-6 -Refer to Table 18-6.The price of output is

Exam 18: The Markets for the Factors of Production

The rental price of land is

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,what effect does this have on the labor market for health care employees?

Figure 18-3 The figure below shows the production function for a particular firm. -Refer to Figure 18-3.The marginal product of the third worker is

When a competitive firm hires labor up to the point at which the value of the marginal product of labor equals the wage,it also produces up to the point at which the price of output equals average variable cost.

The value of the marginal product of labor is calculated by multiplying the

Immigration of workers into the United States is often an important source of

Which of the following events would bring about a change in the value of the marginal product of labor?

When economists refer to a firm's capital,they are likely to be using the term to describe the

The demand curve for capital

The production function is the

What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

The marginal product of labor is defined as the change in

Figure 18-7 -Refer to Figure 18-7.The shift of the labor supply curve from S1 to S2 could possibly be explained by

The value of the marginal product of labor can be calculated as the price of the final good minus the marginal product of labor.

Capital is paid according to the value of its marginal product

Which of the following best illustrates the concept of "derived demand?"

In general,less productive workers are paid less than more productive workers.

Table 18-6 -Refer to Table 18-6.The price of output is

Figure 18-7 -Refer to Figure 18-7.The shift of the labor supply curve from S₁ to S₂ could possibly be explained by