Question 1

The Black Death in fourteenth-century Europe resulted in

Accepted Answer

A)  a lower marginal product of land. 
B)  a lower marginal product of labor of surviving workers. 
C)  economic hardship for surviving peasants. 
D)  economic prosperity for surviving landowners.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Fiona's hourly wage decreases from $10 to $8. Which of the following describes a consequence of the decrease in Fiona's wage?

Accepted Answer

A)  The opportunity cost of Fiona's leisure time has decreased. 
B)  Fiona may choose to work more hours due to the decrease in her wage. 
C)  Fiona may choose to work fewer hours due to the decrease in her wage. 
D)  All of the above are correct.

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

Figure 18-12. 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 18-12. The relationship depicted on the graph is called a _______ function.

Accepted Answer

The answer of Figure 18-12. The figure shows the relationship...

Question 6

If the marginal productivity of the sixth worker hired is less than the marginal productivity of the fifth worker hired, then the addition of the sixth worker causes total output to decline.

Accepted Answer

A) True 
 B)False

Question 7

Table 18-12
The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. 
-Refer to Table 18-12. If the value of the marginal product of the first worker hired is $938, then how many workers does the firm employ?

Accepted Answer

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

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

In the United States, technological advances help explain persistently rising employment in the face of rising wages.

Accepted Answer

A) True 
 B)False

Question 10

Suppose that the market for labor is initially in equilibrium. An increase in the price of output will cause the equilibrium wage

Accepted Answer

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

Question 11

Economists define capital as the

Accepted Answer

A)  accumulation of goods produced in the past that are being used in the present to produce new goods and services. 
B)  goods and services that are most affected by changes in technology. 
C)  factors of production that can be rented by firms. 
D)  factors of production that can be purchased by firms.

Question 12

Suppose that a new invention decreases the marginal productivity of labor, shifting labor demand to the left. Such an invention would be an example of

Accepted Answer

A)  labor-saving technology. 
B)  labor-augmenting technology. 
C)  revenue technology. 
D)  supply-shifting technology.

Question 13

Rob was the last worker hired by a firm that is competitive in the labor market. The labor market always is in equilibrium. Rob's wage is $30 per hour. When Rob was hired, the firm's output increased by 4 units per hour as a result. For what price does the firm sell its output?

Accepted Answer

The answer of Rob was the last worker hired by...

Question 14

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 15

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 16

Consider the market for university economics professors. Suppose the opportunity cost of going to graduate school to get a Ph.D. in economics increases 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 quantity 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 quantity.

Question 17

An event that changes the supply of any factor of production can alter the earnings of all the factors.

Accepted Answer

A) True 
 B)False

Question 18

Suppose that the labor market for life guards is initially in equilibrium. Then a new television series debuts which glamorizes the social opportunities for life guards. 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 19

If the output price of a product rises, the demand for capital will increase, raising the rental price of capital.

Accepted Answer

A) True 
 B)False

Question 20

Suppose that the market for labor is initially in equilibrium. Suppose that workers' tastes change so that they choose to retire at age 70 rather than age 67. Then 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.

Exam 18: The Markets for the Factors of Production

The Black Death in fourteenth-century Europe resulted in

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

Fiona's hourly wage decreases from $10 to $8. Which of the following describes a consequence of the decrease in Fiona's wage?

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.

Figure 18-12. 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 18-12. The relationship depicted on the graph is called a _______ function.

If the marginal productivity of the sixth worker hired is less than the marginal productivity of the fifth worker hired, then the addition of the sixth worker causes total output to decline.

Table 18-12 The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. -Refer to Table 18-12. If the value of the marginal product of the first worker hired is $938, then how many workers does the firm employ?

In the United States, technological advances help explain persistently rising employment in the face of rising wages.

Suppose that the market for labor is initially in equilibrium. An increase in the price of output will cause the equilibrium wage

Economists define capital as the

Suppose that a new invention decreases the marginal productivity of labor, shifting labor demand to the left. Such an invention would be an example of

Rob was the last worker hired by a firm that is competitive in the labor market. The labor market always is in equilibrium. Rob's wage is $30 per hour. When Rob was hired, the firm's output increased by 4 units per hour as a result. For what price does the firm sell its output?

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

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

An event that changes the supply of any factor of production can alter the earnings of all the factors.

Suppose that the labor market for life guards is initially in equilibrium. Then a new television series debuts which glamorizes the social opportunities for life guards. What happens to the equilibrium wage and quantity of life guards?

If the output price of a product rises, the demand for capital will increase, raising the rental price of capital.

Suppose that the market for labor is initially in equilibrium. Suppose that workers' tastes change so that they choose to retire at age 70 rather than age 67. Then the equilibrium wage