Question 1

Consider the labor market for short-order cooks. A labor-augmenting technological change such as a faster food processor will cause

Accepted Answer

A)  both equilibrium wages and equilibrium employment to increase. 
B)  both equilibrium wages and equilibrium employment to decrease. 
C)  equilibrium wages to increase and equilibrium employment to decrease. 
D)  equilibrium wages to decrease and equilibrium employment to increase.

Question 2

Capital, labor, and land

Accepted Answer

A)  have derived demands. 
B)  are factors of production. 
C)  are inputs used in the production of goods and services. 
D)  All of the above are correct.

Question 3

Table 18-6
 
-Refer to Table 18-6. What is the value for the cell labeled CC?

Accepted Answer

A)  650 
B)  600 
C)  100 
D)  50

Question 4

What is the relationship between the marginal product of labor and the value of the marginal product of labor?

Accepted Answer

The answer of What is the relationship between the marginal...

Question 5

Does history suggest that most technological progress is labor-saving or labor-augmenting?

Accepted Answer

The answer of Does history suggest that most technological progress...

Question 6

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 bakery profession becomes less attractive to young women and men because of news reports documenting health risks, what happens in the market for 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 7

Figure 18-4
The graph below illustrates the market for nurses who work in doctors' offices. 
-Refer to Figure 18-4. Each August many high school and college students visit a doctor's office to have a sports physical. If the price of sports physicals rises, what happens in the market for nurses?

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

Scenario 18-7
Suppose the following events occur in the market for university economics professors.
Event 1: A recession in the U.S. economy lowers the opportunity cost of going to graduate school in economics to become a university economics professor.
Event 2: An increasing number of students in U.S. primary and secondary schools increases the number of students entering college, increasing the output price of university economics professors' services.
-Refer to Scenario 18-7. As a result of these two events, holding all else constant, the equilibrium wages of 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 wages.

Question 9

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 output up to the point at which marginal cost is equal to .

Accepted Answer

The answer of When a competitive firm hires labor up...

Question 10

When the wages paid to government economists increase, the labor supply curve for academic economists

Accepted Answer

A)  shifts to the left. 
B)  shifts to the right. 
C)  will become backward-sloping. 
D)  will not change.

Question 11

Figure 18-10 
-Refer to Figure 18-10. Which of the following would shift of the labor demand curve from D1 to D2?

Accepted Answer

A)  technological progress 
B)  an increase in the price of firms' output 
C)  an increase in the supply of a relevant factor of production other than labor 
D)  All of the above are correct.

Question 12

Sally runs a hair styling salon. Sally is a profit-maximizing owner whose firm operates in a competitive market. The marginal cost of a haircut is $15. What is the maximum wage that Sally will pay her stylists?

Accepted Answer

A)  less than $15 per haircut 
B)  $15 per haircut 
C)  more than $15 haircut 
D)  There is insufficient information to answer this question.

Question 13

If the demand for labor decreases and the supply of labor is unchanged, then the opportunity cost of leisure will decrease.

Accepted Answer

A) True 
 B)False

Question 14

Table 18-10
 
-Refer to Table 18-10. This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor. Each baseball sells for $5 in a competitive market. What is the total revenue per day that the firm will earn if it employs five workers?

Accepted Answer

A)  $500 
B)  $300 
C)  $2,200 
D)  $2,500

Question 15

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 16

Table 18-9
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 18-9. What is the marginal product of the fourth unit of labor?

Accepted Answer

A)  40 units 
B)  50 units 
C)  60 units 
D)  180 units

Question 17

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the marginal product of labor.

Accepted Answer

A) True 
 B)False

Question 18

Consider the labor market for short-order cooks. A shortage in the availability of frying pans will cause

Accepted Answer

A)  both equilibrium wages and equilibrium employment to increase. 
B)  both equilibrium wages and equilibrium employment to decrease. 
C)  equilibrium wages to increase and equilibrium employment to decrease. 
D)  equilibrium wages to decrease and equilibrium employment to increase.

Question 19

Figure 18-10 
-Refer to Figure 18-10. When the relevant labor demand curve is D1 and the labor market is in equilibrium,

Accepted Answer

A)  the value of the marginal product of labor to firms is less than W1. 
B)  the opportunity cost of leisure to workers is greater than W1. 
C)  the wage is W1. 
D)  All of the above are correct.

Question 20

Consider the labor market for computer programmers. Because of the dot.com boom in the late 1990s, a lot of workers went to school to learn how to write computer code for one of thousands of new dot.com companies. However, when these computer programming students graduated, the dot.com bust took place. The dot.com bust decreased the value of the marginal product of computer programmers. Holding all else equal, what effect did these two circumstances have on the equilibrium wage in the labor market for computer programmers?

Accepted Answer

A)  The equilibrium wage increased. 
B)  The equilibrium wage decreased. 
C)  The equilibrium wage did not change. 
D)  It is not possible to determine what happens to the equilibrium wage.

Exam 18: The Markets for the Factors of Production

Consider the labor market for short-order cooks. A labor-augmenting technological change such as a faster food processor will cause

Capital, labor, and land

Table 18-6 -Refer to Table 18-6. What is the value for the cell labeled CC?

What is the relationship between the marginal product of labor and the value of the marginal product of labor?

Does history suggest that most technological progress is labor-saving or labor-augmenting?

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 bakery profession becomes less attractive to young women and men because of news reports documenting health risks, what happens in the market for bakers?

Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -Refer to Figure 18-4. Each August many high school and college students visit a doctor's office to have a sports physical. If the price of sports physicals rises, what happens in the market for nurses?

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 output up to the point at which marginal cost is equal to .

When the wages paid to government economists increase, the labor supply curve for academic economists

Figure 18-10 -Refer to Figure 18-10. Which of the following would shift of the labor demand curve from D1 to D2?

Sally runs a hair styling salon. Sally is a profit-maximizing owner whose firm operates in a competitive market. The marginal cost of a haircut is $15. What is the maximum wage that Sally will pay her stylists?

If the demand for labor decreases and the supply of labor is unchanged, then the opportunity cost of leisure will decrease.

Table 18-10 -Refer to Table 18-10. This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor. Each baseball sells for $5 in a competitive market. What is the total revenue per day that the firm will earn if it employs five workers?

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

Table 18-9 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 18-9. What is the marginal product of the fourth unit of labor?

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the marginal product of labor.

Consider the labor market for short-order cooks. A shortage in the availability of frying pans will cause

Figure 18-10 -Refer to Figure 18-10. When the relevant labor demand curve is D1 and the labor market is in equilibrium,