Question 1

Suppose that the market for labor is initially in equilibrium. If the firm employs labor-augmenting technology, 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.E) B) and C)
F) None of the above

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

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

Accepted Answer

A)  demand for apple pickers will shift to the left.
B)  demand for apple pickers will shift to the right.
C)  supply of apple pickers will shift to the left.
D)  supply of apple pickers will shift to the right.E) A) and B)
F) All of the above

Question 4

Consider the market for capital equipment. Suppose the value of the marginal product of capital equipment increases. Holding all else constant, the equilibrium quantity of capital equipment will

Accepted Answer

A)  increase.
B)  decrease.
C)  not change.
D)  It is not possible to determine what will happen to the equilibrium quantity of capital equipment.E) A) and B)
F) C) and D)

Question 5

The rental price of capital is determined by the

Accepted Answer

A)  forces of supply and demand in capital markets.
B)  amount of equity that is generated in equity markets.
C)  amount of bond financing used by profit-maximizing firms.
D)  amount of dividends paid out to stockholders by profit-maximizing firms.E) B) and D)
F) All of the above

Question 6

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

Accepted Answer

A)  $600
B)  $500
C)  $400
D)  $300E) A) and B)
F) A) and C)

Question 7

Ellen receives a raise at her current part-time job from $8 to $10 per hour. If her labor supply curve is upward sloping, she will work fewer hours after receiving the pay raise.

Accepted Answer

A) True 
 B)False  False

Question 8

Table 18-B
Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. 
-Refer to Table 18-11. What is the marginal profit of the sixth worker?

Accepted Answer

A)  $100
B)  −$50
C)  −$75
D)  −$125E) A) and B)
F) B) and C)

Question 9

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 and the firm pays each unit of labor a wage equal to $320 per day. How many units of labor should the firm hire to maximize profit?

Accepted Answer

A)  2 units
B)  3 units
C)  4 units
D)  5 unitsE) A) and B)
F) A) and C)

Question 10

Figure 18-8
This figure below shows the labor market for automobile workers. The curve labeled S is the labor supply curve, and the curves labeled D1 and D2 are the labor demand curves. On the horizontal axis, L represents the quantity of labor in the market. 1 and D2 are the labor demand curves. On the horizontal axis, L represents the quantity of labor in the market.   -Refer to Figure 18-8. Which of the following events would most likely explain the shift of the labor-demand curve from D1 to D2? A) The price of automobiles decreased. B) A large number of immigrants entered the automobile-worker market. C) A technological advance increased the marginal product of automobile workers. D) All of the above are correct." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-8. Which of the following events would most likely explain the shift of the labor-demand curve from D1 to D2?

Accepted Answer

A)  The price of automobiles decreased.
B)  A large number of immigrants entered the automobile-worker market.
C)  A technological advance increased the marginal product of automobile workers.
D)  All of the above are correct.E) A) and B)
F) B) and C) C

Question 11

Capital owners are compensated according to the value of the marginal product of that capital.

Accepted Answer

A) True 
 B)False

Question 12

How does increased immigration affect the labor market? How would the equilibrium wage and the equilibrium quantity of labor be affected?

Accepted Answer

Increased immigration increase...

Question 13

A consultant interviews the hiring manager of a small, profit-maximizing firm. The manager explains that the firm used to have 15 employees but decided not to rehire when the most-recently-hired employee left the company, so the firm now has 14 employees. We can infer that

Accepted Answer

A)  for the 15th employee, the wage exceeded the value of the marginal product of labor.
B)  for the 15th employee, the value of the marginal product of labor exceeded the wage.
C)  the firm is too small and should rehire to replace the 15th employee.
D)  the firm is no longer attempting to maximize profits.E) B) and D)
F) A) and D)

Question 14

Which of the following statements is correct? An individual worker's labor supply curve

Accepted Answer

A)  can never be backward sloping.
B)  slopes backward if that person responds to a higher wage by taking fewer hours of leisure per week.
C)  slopes backward if that person responds to a higher opportunity cost of leisure by working fewer hours per week.
D)  slopes upward if that person works the same number of hours per week, regardless of the opportunity cost of leisure.E) A) and B)
F) A) and C)

Question 15

According to the neoclassical theory of distribution, the wages paid to workers

Accepted Answer

A)  reflect the market prices of the goods those workers produce.
B)  reflect the degree of market power held by the firms that pay those wages.
C)  fail to reflect those workers' opportunity costs of leisure.
D)  are unrelated to the forces of supply and demand.E) All of the above
F) A) and B)

Question 16

The labor supply curve reflects how

Accepted Answer

A)  workers' decisions about the labor-leisure tradeoff respond to a change in the wage.
B)  workers' decisions about the opportunity cost of labor respond to a change in the quantity of labor supplied.
C)  firms' decisions about the labor-leisure tradeoff respond to the quantity of labor demanded.
D)  firms' decisions about how the quantity of labor they hire respond to changes in their opportunities to earn profits.E) All of the above
F) B) and D)

Question 17

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 marginal revenue product of the third worker?

Accepted Answer

A)  120 baseballs.
B)  $300
C)  $400
D)  $600E) A) and D)
F) A) and C)

Question 18

Suppose that in November a profit-maximizing firm has 100 employees. By December, the firm has decreased employment. One can infer that, when 100 employees are hired, the

Accepted Answer

A)  firm is losing market share.
B)  firm is minimizing losses.
C)  wage exceeds the value of the marginal product of labor.
D)  value of the marginal product of labor exceeds the wage.E) All of the above
F) B) and D)

Question 19

Daryn is raking leaves to earn money for his university's economics club. In the first hour, he rakes 8 bags of leaves. In the second hour, he rakes 6 bags of leaves. If he earns $8 per hour, the value of the marginal product of the second hour of labor is $16.

Accepted Answer

A) True 
 B)False

Question 20

Table 18-7 
-Refer to Table 18-7. To maximize its profit, how many workers will the firm hire?

Accepted Answer

A)  2
B)  3
C)  4
D)  5E) None of the above
F) A) and C)

Exam 18: The Markets for the Factors of Production

Suppose that the market for labor is initially in equilibrium. If the firm employs labor-augmenting technology, the equilibrium wage

Correct Answer
verified

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

Correct Answer
verified
True

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

Correct Answer
verified

Consider the market for capital equipment. Suppose the value of the marginal product of capital equipment increases. Holding all else constant, the equilibrium quantity of capital equipment will

Correct Answer
verified

The rental price of capital is determined by the

Correct Answer
verified

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

Correct Answer
verified

Ellen receives a raise at her current part-time job from $8 to $10 per hour. If her labor supply curve is upward sloping, she will work fewer hours after receiving the pay raise.

Correct Answer
verified
False

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the marginal profit of the sixth worker?

Correct Answer
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Correct Answer
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Correct Answer
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C

Capital owners are compensated according to the value of the marginal product of that capital.

Correct Answer
verified

How does increased immigration affect the labor market? How would the equilibrium wage and the equilibrium quantity of labor be affected?

Correct Answer
verified
Increased immigration increase...
View Answer

A consultant interviews the hiring manager of a small, profit-maximizing firm. The manager explains that the firm used to have 15 employees but decided not to rehire when the most-recently-hired employee left the company, so the firm now has 14 employees. We can infer that

Correct Answer
verified

Which of the following statements is correct? An individual worker's labor supply curve

Correct Answer
verified

According to the neoclassical theory of distribution, the wages paid to workers

Correct Answer
verified

The labor supply curve reflects how

Correct Answer
verified

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 marginal revenue product of the third worker?

Correct Answer
verified

Suppose that in November a profit-maximizing firm has 100 employees. By December, the firm has decreased employment. One can infer that, when 100 employees are hired, the

Correct Answer
verified

Daryn is raking leaves to earn money for his university's economics club. In the first hour, he rakes 8 bags of leaves. In the second hour, he rakes 6 bags of leaves. If he earns $8 per hour, the value of the marginal product of the second hour of labor is $16.

Correct Answer
verified

Table 18-7 -Refer to Table 18-7. To maximize its profit, how many workers will the firm hire?

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Suppose that the market for labor is initially in equilibrium. If the firm employs labor-augmenting technology, the equilibrium wage

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedTrue

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

Correct AnswerverifiedShow Answer

Consider the market for capital equipment. Suppose the value of the marginal product of capital equipment increases. Holding all else constant, the equilibrium quantity of capital equipment will

Correct AnswerverifiedShow Answer

The rental price of capital is determined by the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Ellen receives a raise at her current part-time job from $8 to $10 per hour. If her labor supply curve is upward sloping, she will work fewer hours after receiving the pay raise.

Correct AnswerverifiedFalse

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the marginal profit of the sixth worker?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedC

Capital owners are compensated according to the value of the marginal product of that capital.

Correct AnswerverifiedShow Answer

How does increased immigration affect the labor market? How would the equilibrium wage and the equilibrium quantity of labor be affected?

Correct AnswerverifiedIncreased immigration increase...View AnswerShow Answer

A consultant interviews the hiring manager of a small, profit-maximizing firm. The manager explains that the firm used to have 15 employees but decided not to rehire when the most-recently-hired employee left the company, so the firm now has 14 employees. We can infer that

Correct AnswerverifiedShow Answer

Which of the following statements is correct? An individual worker's labor supply curve

Correct AnswerverifiedShow Answer

According to the neoclassical theory of distribution, the wages paid to workers

Correct AnswerverifiedShow Answer

The labor supply curve reflects how

Correct AnswerverifiedShow Answer

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 marginal revenue product of the third worker?

Correct AnswerverifiedShow Answer

Suppose that in November a profit-maximizing firm has 100 employees. By December, the firm has decreased employment. One can infer that, when 100 employees are hired, the

Correct AnswerverifiedShow Answer

Daryn is raking leaves to earn money for his university's economics club. In the first hour, he rakes 8 bags of leaves. In the second hour, he rakes 6 bags of leaves. If he earns $8 per hour, the value of the marginal product of the second hour of labor is $16.

Correct AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. To maximize its profit, how many workers will the firm hire?

Correct AnswerverifiedShow Answer

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True

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False

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C

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Increased immigration increase...
View Answer

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Correct Answer
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