Question 1

When a competitive firm maximizes profit, it will hire workers up to the point where the

Accepted Answer

A)  marginal product of labor is equal to the product price.
B)  marginal product of labor is equal to the wage.
C)  value of the marginal product of labor is equal to the product price.
D)  value of the marginal product of labor is equal to the wage.E) All of the above
F) A) and B)

Question 2

Suppose that a large tornado destroys the fleet of fire trucks for the city of Omaha, Nebraska. What happens to the earnings of firefighters in Omaha?

Accepted Answer

A)  The reduction in the supply of fire trucks reduces the marginal productivities of Omaha firefighters, which causes the equilibrium wage to fall.
B)  The reduction in the supply of fire trucks increases the marginal productivities of Omaha firefighters, which causes the equilibrium wage to fall.
C)  The reduction in the supply of fire trucks reduces the marginal productivities of Omaha firefighters, which causes the equilibrium wage to rise.
D)  The reduction in the supply of fire trucks increases the marginal productivities of Omaha firefighters, which causes the equilibrium wage to rise.E) A) and C)
F) B) and C)

Question 3

When labor supply increases,

Accepted Answer

A)  the marginal productivity of workers always increases.
B)  profit-maximizing firms reduce employment.
C)  wages increase as long as labor supply is upward sloping.
D)  wages decrease as long as labor demand is downward sloping.E) A) and C)
F) A) and B)

Question 4

The value of the marginal product of labor can be calculated as the price of the final good minus the marginal product of labor.

Accepted Answer

A) True 
 B)False

Question 5

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.E) B) and D)
F) A) and D)

Question 6

Which of the following events can not cause the labor-supply curve to shift?

Accepted Answer

A)  a change in people's attitudes toward work
B)  an increase in the price of output
C)  a change in workers' alternative opportunities
D)  an increase in the rate of immigrationE) None of the above
F) A) and B)

Question 7

Figure 18-4
The graph below illustrates the market for nurses who work in doctors' offices. 
-Refer to Figure 18-4. If the supply of medical supplies that nurses use when performing sports physicals decreases, 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.E) All of the above
F) A) and C)

Question 8

Figure 18-7 1 to S2? A) technological progress B) a decrease in the price of the firm's output C) a change in workers' attitudes toward the work-leisure tradeoff D) an increase in the price of the firm's output" class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-7. Which of the following would shift the labor supply curve from S1 to S2?

Accepted Answer

A)  technological progress
B)  a decrease in the price of the firm's output
C)  a change in workers' attitudes toward the work-leisure tradeoff
D)  an increase in the price of the firm's outputE) B) and C)
F) All of the above

Question 9

Suppose that a college professor is creating an exam in her university office. Which of the following would be an example of a factor of production used by the professor?
(i) the professor's time
(ii) a computer software program into which the professor types the exam questions
(iii) the physical space of the professors office where she works when creating the exam
(iv) the interest on the professor's home mortgage

Accepted Answer

A)  (i)  only
B)  (i)  and (ii)  only
C)  (i) , (ii) , and (iii)  only
D)  (i) , (ii) , (iii) , and (iv) E) None of the above
F) A) and B)

Question 10

Figure 18-1. 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 18-1. What is the marginal product of the third mechanic?

Accepted Answer

The marginal product...

Question 11

The purchase price of capital is

Accepted Answer

A)  the value of the capital to the firm.
B)  always less than the rental price.
C)  the price received from the flow of some capital services.
D)  the price a person pays to own that factor of production indefinitely.E) None of the above
F) C) and D)

Question 12

Chuckie's Pizza Palace produces gourmet pizzas that sell for $20 each. Assume that labor is the only input that varies for the firm. If Chuckie hires 10 workers, he can produce and sell 600 pizzas per week. If he hires 11 workers, he can produce and sell 650 pizzas per week. Chuckie pays each of his workers $400 per week. Which of the following is correct?

Accepted Answer

A)  For the 11th worker, the marginal profit is $1,000.
B)  For the 11th worker, the marginal revenue product is $1,000.
C)  The firm is maximizing its profit.
D)  If the firm is employing 11 workers, then its profit would increase if it cut back to 10 workers.E) B) and D)
F) A) and D)

Question 13

The effect of the Black Death in 14th-century Europe was to

Accepted Answer

A)  decrease wages.
B)  increase land rents.
C)  reduce income inequality between peasants and the landed classes.
D)  Both a)  and b)  are correct.E) B) and D)
F) None of the above

Question 14

Figure 18-4
The graph below illustrates the market for nurses who work in doctors' offices. 
-In 2015, the total income of all U.S. residents was about

Accepted Answer

A)  $10 billion.
B)  $16 billion.
C)  $10 trillion.
D)  $16 trillion.E) B) and D)
F) B) and C)

Question 15

If a worker responds to an increase in the opportunity cost of leisure by taking less leisure, then his labor supply curve is

Accepted Answer

A)  horizontal.
B)  vertical.
C)  backward sloping.
D)  upward sloping.E) C) and D)
F) B) and C)

Question 16

A competitive firm sells its output for $50 per unit. Assume that labor is the only input that varies for the firm. The marginal product of the 10th worker is 10 units of output per day; the marginal product of the 11th worker is 8 units of output per day. The firm pays its workers a wage of $160 per day. For the 10th worker, the value of the marginal product of labor is

Accepted Answer

A)  $250.
B)  $400.
C)  $500.
D)  $1,280.E) B) and C)
F) A) and C)

Question 17

Labor-augmenting 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.

Accepted Answer

A)  (i)  only
B)  (ii)  only
C)  (i)  and (iii)  only
D)  (ii)  and (iv)  onlyE) A) and B)
F) A) and C)

Question 18

Factor markets for chocolate bars are influenced by the

Accepted Answer

A)  demand for chocolate bars.
B)  marginal productivities of labor and capital.
C)  market prices for final goods and services.
D)  All of the above are correct.E) A) and B)
F) A) and D)

Question 19

Suppose that a new invention increases the marginal productivity of labor, shifting labor demand to the right. 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.E) All of the above
F) A) and B)

Question 20

Scenario 18-6
Rocchetta Industries manufactures and supplies bottled water in Mexico. As a result of a contamination of water supplies at many of Mexico's resort communities, the demand for bottled water has increased.
-Refer to Scenario 18-6. We would expect that, as a result of the contamination, the value of the marginal product for Rocchetta Industries' workers would

Accepted Answer

A)  be offset by a decrease in wages.
B)  be unaffected by a rise in demand for bottled water.
C)  increase.
D)  decrease.E) None of the above
F) A) and D)

Exam 18: The Markets for the Factors of Production

Figure 18-7 -Refer to Figure 18-7. Which of the following would shift the labor supply curve from S₁ to S₂?

Correct Answer
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Suppose that a new invention increases the marginal productivity of labor, shifting labor demand to the right. Such an invention would be an example of

Correct Answer
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Which of the following events can not cause the labor-supply curve to shift?

Correct Answer
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Correct Answer
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Figure 18-1. 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 18-1. What is the marginal product of the third mechanic?

Correct Answer
verified
The marginal product...
View Answer

Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -In 2015, the total income of all U.S. residents was about

Correct Answer
verified

Suppose that a large tornado destroys the fleet of fire trucks for the city of Omaha, Nebraska. What happens to the earnings of firefighters in Omaha?

Correct Answer
verified

When a competitive firm maximizes profit, it will hire workers up to the point where the

Correct Answer
verified

If a worker responds to an increase in the opportunity cost of leisure by taking less leisure, then his labor supply curve is

Correct Answer
verified

The effect of the Black Death in 14th-century Europe was to

Correct Answer
verified

The value of the marginal product of labor can be calculated as the price of the final good minus the marginal product of labor.

Correct Answer
verified

Correct Answer
verified

When labor supply increases,

Correct Answer
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The purchase price of capital is

Correct Answer
verified

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?

Correct Answer
verified

Correct Answer
verified

Factor markets for chocolate bars are influenced by the

Correct Answer
verified

Correct Answer
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Labor-augmenting 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.

Correct Answer
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Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -Refer to Figure 18-4. If the supply of medical supplies that nurses use when performing sports physicals decreases, what happens in the market for nurses?

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Figure 18-7 -Refer to Figure 18-7. Which of the following would shift the labor supply curve from S1 to S2?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following events can not cause the labor-supply curve to shift?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 18-1. 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 18-1. What is the marginal product of the third mechanic?

Correct AnswerverifiedThe marginal product...View AnswerShow Answer

Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -In 2015, the total income of all U.S. residents was about

Correct AnswerverifiedShow Answer

Suppose that a large tornado destroys the fleet of fire trucks for the city of Omaha, Nebraska. What happens to the earnings of firefighters in Omaha?

Correct AnswerverifiedShow Answer

When a competitive firm maximizes profit, it will hire workers up to the point where the

Correct AnswerverifiedShow Answer

If a worker responds to an increase in the opportunity cost of leisure by taking less leisure, then his labor supply curve is

Correct AnswerverifiedShow Answer

The effect of the Black Death in 14th-century Europe was to

Correct AnswerverifiedShow Answer

The value of the marginal product of labor can be calculated as the price of the final good minus the marginal product of labor.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When labor supply increases,

Correct AnswerverifiedShow Answer

The purchase price of capital is

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Factor markets for chocolate bars are influenced by the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Labor-augmenting 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.

Correct AnswerverifiedShow Answer

Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -Refer to Figure 18-4. If the supply of medical supplies that nurses use when performing sports physicals decreases, what happens in the market for nurses?

Correct AnswerverifiedShow Answer

Figure 18-7 -Refer to Figure 18-7. Which of the following would shift the labor supply curve from S₁ to S₂?

Correct Answer
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The marginal product...
View Answer

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