Question 1

The production function is the

Accepted Answer

A)   increase in the amount of output from an additional unit of labor.
B)   marginal product of an input times the price of output.
C)   relationship between the quantity of inputs and output.
D)   shift in labor demand caused by a change in the price of output.E) A) and B)
F) A) and D)

Question 2

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

Accepted Answer

A)   80 units
B)   100 units
C)   180 units
D)   200 unitsE) B) and C)
F) A) and C)

Question 3

As a result of increasing its workforce from 9 workers to 10 workers,a firm's total revenue per day increases from $60,000 to $60,250 and its total cost per day increases from $58,500 to $58,700.The marginal profit of the 10th worker is

Accepted Answer

A)   $-50.
B)   $50.
C)   $200.
D)   $250.E) None of the above
F) B) and C)

Question 4

To say that a firm is competitive in the labor market is to say that the firm

Accepted Answer

A)   has little or no control over the number of workers it hires.
B)   has little or no control over the wage it pays its workers.
C)   is aggressive in pursuing the most skilled workers in the labor market.
D)   is aggressive in trying to keep its workers' wages low.E) B) and C)
F) A) and D)

Question 5

As a result of a fire,a small business owner loses some of her computers and other equipment.If the property of diminishing returns applies to all factors of production,she should expect to see

Accepted Answer

A)   an increase in the marginal productivity of her remaining capital and an increase in the marginal productivity of her labor.
B)   an increase in the marginal productivity of her remaining capital and a decrease in the marginal productivity of her labor.
C)   a decrease in the marginal productivity of her remaining capital and an increase in the marginal productivity of her labor.
D)   a decrease in the marginal productivity of her remaining capital and a decrease in the marginal productivity of her labor.E) A) and D)
F) A) and C)

Question 6

Suppose that a violent earthquake causes the uninhabited Hawaiian island of Mokuauia (also called Goat Island) to fall into the Pacific Ocean.No people are killed or injured,and since the island is undeveloped,no buildings are destroyed.The island was a source of tourist income for Hawaiian landowners.Which of the following statements correctly describes the rents earned by the people who own land on the surrounding islands?

Accepted Answer

A)   As the supply of vacation land decreases,the marginal productivity of the remaining land will decrease;thus rents will decrease.
B)   As the supply of vacation land decreases,the marginal productivity of the remaining land will increase;thus,rents will decrease.
C)   As the supply of vacation land decreases,the marginal productivity of the remaining land will increase;thus,rents will increase.
D)   There would be no change in the rents earned by the other landowners because the effects of supply and demand would exactly cancel each other out.E) A) and B)
F) A) and C)

Question 7

Consider the market for capital equipment.Suppose the market price of firms' output decreases.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) All of the above

Question 8

What is the relationship between the marginal product of labor and the value of the marginal product of labor?

Accepted Answer

The value of the marginal prod...

Question 9

John owns a number of hot dog stands in New York City.He hires workers to sell hot dogs at his stands.Which of the following events will lead to a decrease in John's demand for hot dog vendors?

Accepted Answer

A)   Hollywood glamorization of a new movie about a hot dog vendor leads hundreds of high-school students in New York City to apply for a job at John's.
B)   The price of hot dogs falls.
C)   The local hot dog vendors form a union increasing hot dog vendor wages.
D)   The demand curve for hot dogs shifts to the right.E) None of the above
F) B) and C)

Question 10

For maximum profit,a firm hires labor up to the point at which the wage equals
 (i) The value of the marginal product of labor.
(ii) The marginal cost of an additional unit of output.
(iii) Output price multiplied by the marginal product of labor.

Accepted Answer

A)   (i) and (ii) 
B)   (i) and (iii) 
C)   (ii) and (iii) 
D)   All of the above are correct.E) A) and B)
F) B) and D)

Question 11

Who receives income from capital in the United States?

Accepted Answer

A)   bank depositors
B)   bondholders
C)   stockholders
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 12

Because a firm's demand for a factor of production is derived from its decision to supply a good in the market,it is called a

Accepted Answer

A)   differentiated demand.
B)   secondary demand.
C)   derived demand.
D)   hybrid demand-supply.E) C) and D)
F) None of the above

Question 13

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 price of breakfast pastries rises,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) None of the above

Question 14

When you receive interest on your bank account,that income is part of the economy's __________ income.

Accepted Answer

The answer of When you receive interest on your bank...

Question 15

We observe a profit-maximizing firm hiring its 51st employee.It is possible to infer that,when 50 employees are hired,the

Accepted Answer

A)   wage exceeds the value of the marginal product of labor.
B)   value of the marginal product of labor exceeds the wage.
C)   marginal product of labor is increasing.
D)   firm is attempting to increase its market share.E) B) and C)
F) A) and D)

Question 16

The term Luddite is used to describe

Accepted Answer

A)   a person who readily adopts the latest technological advances.
B)   a person who is opposed to a reduction in the number of immigrants that are allowed into the country each year.
C)   a person who opposes technological advance.
D)   any mythical historical figure.E) B) and C)
F) All of the above

Question 17

Table 18-1.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 18-1.Suppose the firm sells each box of envelopes that it produces for $6.The firm would not be interested in hiring a third worker unless the wage fell from its current level of $600 to what level?

Accepted Answer

A)   $564
B)   $557
C)   $554
D)   $551E) B) and C)
F) A) and D)

Question 18

Because of diminishing returns,a factor in abundant supply has a

Accepted Answer

A)   high marginal product and a high rental price.
B)   high marginal product and a low rental price.
C)   low marginal product and a high rental price.
D)   low marginal product and a low rental price.E) A) and B)
F) B) and C)

Question 19

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) B) and C)

Question 20

Which of the following events would bring about a change in the value of the marginal product of labor?

Accepted Answer

A)   technological progress that alters the amount a worker can produce
B)   a change in the marginal product of labor
C)   a change in the price of the product that the firm sells
D)   All of the above are correct.E) B) and C)
F) All of the above

Exam 18: The Market for the Factors of Production

Which of the following events would bring about a change in the value of the marginal product of labor?

Correct Answer
verified

Consider the market for capital equipment.Suppose the market price of firms' output decreases.Holding all else constant,the equilibrium quantity of capital equipment will

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

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

Correct Answer
verified

John owns a number of hot dog stands in New York City.He hires workers to sell hot dogs at his stands.Which of the following events will lead to a decrease in John's demand for hot dog vendors?

Correct Answer
verified

When you receive interest on your bank account,that income is part of the economy's __________ income.

Correct Answer
verified

Who receives income from capital in the United States?

Correct Answer
verified

What is the relationship between the marginal product of labor and the value of the marginal product of labor?

Correct Answer
verified
The value of the marginal prod...
View Answer

Because of diminishing returns,a factor in abundant supply has a

Correct Answer
verified

The term Luddite is used to describe

Correct Answer
verified

Because a firm's demand for a factor of production is derived from its decision to supply a good in the market,it is called a

Correct Answer
verified

The production function is the

Correct Answer
verified

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 price of breakfast pastries rises,what happens in the market for bakers?

Correct Answer
verified

Correct Answer
verified

To say that a firm is competitive in the labor market is to say that the firm

Correct Answer
verified

We observe a profit-maximizing firm hiring its 51st employee.It is possible to infer that,when 50 employees are hired,the

Correct Answer
verified

As a result of a fire,a small business owner loses some of her computers and other equipment.If the property of diminishing returns applies to all factors of production,she should expect to see

Correct Answer
verified

For maximum profit,a firm hires labor up to the point at which the wage equals (i) The value of the marginal product of labor. (ii) The marginal cost of an additional unit of output. (iii) Output price multiplied by the marginal product of labor.

Correct Answer
verified

Correct Answer
verified

As a result of increasing its workforce from 9 workers to 10 workers,a firm's total revenue per day increases from $60,000 to $60,250 and its total cost per day increases from $58,500 to $58,700.The marginal profit of the 10^th worker is

Correct Answer
verified

Exam 18: The Market for the Factors of Production

Which of the following events would bring about a change in the value of the marginal product of labor?

Correct AnswerverifiedShow Answer

Consider the market for capital equipment.Suppose the market price of firms' output decreases.Holding all else constant,the equilibrium quantity of capital equipment will

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

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

Correct AnswerverifiedShow Answer

John owns a number of hot dog stands in New York City.He hires workers to sell hot dogs at his stands.Which of the following events will lead to a decrease in John's demand for hot dog vendors?

Correct AnswerverifiedShow Answer

When you receive interest on your bank account,that income is part of the economy's __________ income.

Correct AnswerverifiedShow Answer

Who receives income from capital in the United States?

Correct AnswerverifiedShow Answer

What is the relationship between the marginal product of labor and the value of the marginal product of labor?

Correct AnswerverifiedThe value of the marginal prod...View AnswerShow Answer

Because of diminishing returns,a factor in abundant supply has a

Correct AnswerverifiedShow Answer

The term Luddite is used to describe

Correct AnswerverifiedShow Answer

Because a firm's demand for a factor of production is derived from its decision to supply a good in the market,it is called a

Correct AnswerverifiedShow Answer

The production function is the

Correct AnswerverifiedShow Answer

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 price of breakfast pastries rises,what happens in the market for bakers?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

To say that a firm is competitive in the labor market is to say that the firm

Correct AnswerverifiedShow Answer

We observe a profit-maximizing firm hiring its 51st employee.It is possible to infer that,when 50 employees are hired,the

Correct AnswerverifiedShow Answer

As a result of a fire,a small business owner loses some of her computers and other equipment.If the property of diminishing returns applies to all factors of production,she should expect to see

Correct AnswerverifiedShow Answer

For maximum profit,a firm hires labor up to the point at which the wage equals (i) The value of the marginal product of labor. (ii) The marginal cost of an additional unit of output. (iii) Output price multiplied by the marginal product of labor.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

As a result of increasing its workforce from 9 workers to 10 workers,a firm's total revenue per day increases from $60,000 to $60,250 and its total cost per day increases from $58,500 to $58,700.The marginal profit of the 10th worker is

Correct AnswerverifiedShow Answer

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verified
The value of the marginal prod...
View Answer

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As a result of increasing its workforce from 9 workers to 10 workers,a firm's total revenue per day increases from $60,000 to $60,250 and its total cost per day increases from $58,500 to $58,700.The marginal profit of the 10^th worker is

Correct Answer
verified