Question 1

The following table shows the marginal revenue of a firm and the marginal physical product of different units of labor in a perfectly competitive labor market.Table 14.5
Note: Marginal revenue product of a resource is the product of MPP and MR. 
-In Table 14.5, if the wage rate is $10, how many workers will be employed by a profit-maximizing firm ?

Accepted Answer

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

Question 2

The following table shows the marginal productivity of different units of labor for producing a product.Table 14.4
In the table,
MR: Marginal Revenue
MPP: Marginal Physical Product
 
-In Table 14.4, if marginal revenue product is equal to the product of MPP and MR, what wage rate would be consistent with a profit-maximizing firm hiring six laborers?

Accepted Answer

A) $6 
B) $10 
C) $12 
D) $18 
E) $24

Question 3

In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
  In the figure,
D: Demand curve for automobiles
SS1U1B11S1U1B0: Supply curve of automobiles prior to regulation
SS1U1B12S1U1B0: Supply curve of automobiles after regulation
FG: Clean up cost per unit
-The marginal revenue product (MRP) is the:

Accepted Answer

A) value of the additional output that an extra unit of a resource can produce. 
B) cost of hiring an additional unit of a resource. 
C) extra cost of producing an additional unit of output. 
D) increase in total output when an additional unit of an input is hired. 
E) change in total revenue when an additional unit of a good is sold.

Question 4

The following table shows output per hour produced by the different units of labor.Table 14.1
The marginal revenue product of a resource is equal to the product of the marginal product of an input and marginal revenue. 
-Refer to Table 14.1. If both the wage rate and the price of the good falls to $2, how many workers would the firm hire?

Accepted Answer

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

Question 5

The following table shows the marginal revenue of a firm and the marginal physical product of different units of labor in a perfectly competitive labor market.Table 14.5
Note: Marginal revenue product of a resource is the product of MPP and MR. 
-In Table 14.5, at what wage rate would one worker be hired by a profit-maximizing firm?

Accepted Answer

A) $10 
B) $25 
C) $30 
D) $50 
E) $100

Question 6

The table below shows the total output produced by different units of a resource. Assume that the resource and output markets are both perfectly competitive. The equilibrium price of the resource is $15.00, and the equilibrium price of the product is $0.50.Table 14.2
Marginal revenue product (MRP) of a resource is the product of the marginal product of the resource and the marginal revenue. 
-If a resource is purchased and sold in a perfectly competitive market:

Accepted Answer

A) there are a large number of resource suppliers and the resources are identical. 
B) there is a single buyer of resource and the resources are identical. 
C) there is a single buyer of resource and the resources are differentiated. 
D) there are a large number of resource suppliers and the resources are differentiated. 
E) there are a large number of resource suppliers and there is no entry or exit.

Question 7

The following table shows output per hour produced by the different units of labor.Table 14.1
The marginal revenue product of a resource is equal to the product of the marginal product of an input and marginal revenue. 
-According to Table 14.1, the marginal revenue product of the:

Accepted Answer

A) fourth worker is $8. 
B) fifth worker is $3. 
C) first worker is $3. 
D) third worker is $5. 
E) second worker is $12.

Question 8

Scenario 14.1
A worker in Firm A earns an income of $5,000 per month. He has been offered a job in Firm B where he will be paid a salary of $7,000 per month.
-The profit-maximizing number of workers for a monopsony to employ is derived at the point where the marginal revenue product of labor is equal to the marginal factor cost of labor.

Accepted Answer

A) True 
 B)False

Question 9

Scenario 14.1
A worker in Firm A earns an income of $5,000 per month. He has been offered a job in Firm B where he will be paid a salary of $7,000 per month.
-Households' expenditure on goods and services are sources of revenue for the firms.

Accepted Answer

A) True 
 B)False

Question 10

The table below shows the total output produced by different units of a resource. Assume that the resource and output markets are both perfectly competitive. The equilibrium price of the resource is $15.00, and the equilibrium price of the product is $0.50.Table 14.2
Marginal revenue product (MRP) of a resource is the product of the marginal product of the resource and the marginal revenue. 
-Refer to Table 14.2. What is the marginal factor cost for the third unit of the resource?

Accepted Answer

A) $13.00 
B) $15.00 
C) $17.50 
D) $195.00 
E) $19.50

Exam 15: Resource Markets

The following table shows output per hour produced by the different units of labor.Table 14.1 The marginal revenue product of a resource is equal to the product of the marginal product of an input and marginal revenue. -According to Table 14.1, the marginal revenue product of the:

Scenario 14.1 A worker in Firm A earns an income of $5,000 per month. He has been offered a job in Firm B where he will be paid a salary of $7,000 per month. -Households' expenditure on goods and services are sources of revenue for the firms.