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Exam 18: The Market for the Factors of Production

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Question 121

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Figure 18-5 The figure shows a particular profit-maximizing,competitive firm's value-of-marginal-product (VMP) curve.On the horizontal axis,L represents the number of workers.The time frame is daily. -Refer to Figure 18-5.The firm would choose to hire three workers if

A) the market wage for a day's work is $220.
B) the market wage for a day's work is $260.
C) the output price is $220.
D) the output price is $260.

E) A) and B)
F) C) and D)

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Question 122

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Capital income does not include income paid to households for the use of their capital.

A) True
B) False

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Question 123

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Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2.Suppose the firm pays a wage equal to $160 per unit of labor and sells its output at $10 per unit.How many units of labor should the firm hire to maximize profit?

Figure 18-9 -Refer to Figure 18-9.If the price of apples decreases,the

Labor-saving technology causes which of the following? (i) The marginal productivity of labor increases. (ii) The marginal productivity of labor decreases. (iii) Labor demand shifts to the right. (iv) Labor demand shifts to the left.

Table 18-5 -Refer to Table 18-5.What is the value for the cell labeled AA?

Table 18-3 -Refer to Table 18-3.For Firm B,the marginal product of labor is

Figure 18-1.On the graph,L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1.Suppose the firm sells its output for $15 per unit,and it pays each of its workers $750 per week.When output increases from 210 units to 285 units,the

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

If the demand for labor in a particular industry increases,the equilibrium wage in that industry will also increase.

Table 18-10 Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day. -Refer to Table 18-10.The marginal product of labor begins to diminish with the addition of which worker?

Which of the following is not correct?

Firms pay out a portion of their earnings in the form of interest and dividends,and those payments are a portion of the economy's capital income.

Table 18-8 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 18-8.Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day.What is the value of the marginal product of labor for the fourth worker?

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 equilibrium purchase price of an acre of land depends upon the current value of the marginal product of land and upon the __________.

Which of the following statements is correct?

Christine works for a firm that makes tires for cars.How is Christine's wage affected if the price of tires decreases?

Competitive firms decide how much output to sell by producing output until the price of the good equals

Figure 18-4 -Refer to Figure 18-4.The graph above illustrates the market for bakers who make homemade breads and breakfast pastries.If the supply of commercial-grade ovens in which the bakers bake their breads and pastries increases,what happens in the market for bakers?