Question 1

Table 18-3 
-Refer to Table 18-3. Which firm's production function exhibits negative marginal product?

Accepted Answer

A)  Firm A
B)  Firm B
C)  Firm C
D)  Firm DE) A) and B)
F) A) and C)

Question 2

When deciding whether to hire an additional worker, firms need only consider how the additional worker would affect

Accepted Answer

A)  costs.
B)  revenues.
C)  output.
D)  profit.E) A) and C)
F) C) and D)

Question 3

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.E) B) and D)
F) C) and D)

Question 4

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. Suppose the firm sells each box of envelopes that it produces for $6. What is the marginal profit of the fourth worker?

Accepted Answer

A)  $-132
B)  $-96
C)  $132
D)  $504E) B) and C)
F) A) and D)

Question 5

If the demand for labor decreases and the supply of labor is unchanged, then the opportunity cost of leisure will decrease.

Accepted Answer

A) True 
 B)False

Question 6

Figure 18-7 1 = $20 and W2 = $18, and the market is always in equilibrium. A shift of the labor supply curve from S1 to S2 would A) increase the value of the marginal product of labor by $2. B) decrease the value of the marginal product of labor by $2. C) decrease the value of the marginal product of labor by more than $2. D) not change the value of the marginal product of labor." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-7. Assume W1 = $20 and W2 = $18, and the market is always in equilibrium. A shift of the labor supply curve from S1 to S2 would

Accepted Answer

A)  increase the value of the marginal product of labor by $2.
B)  decrease the value of the marginal product of labor by $2.
C)  decrease the value of the marginal product of labor by more than $2.
D)  not change the value of the marginal product of labor.E) A) and B)
F) B) and D)

Question 7

Suppose that the market for labor is initially in equilibrium. Suppose that workers' tastes change so that they choose to retire at age 55 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.E) All of the above
F) B) and D)

Question 8

Table 18-1 
-Refer to Table 18-1. Suppose that the firm pays its workers $80 per day. Each unit of output sells for $15. How many days of labor should the firm hire?

Accepted Answer

A)  3
B)  4
C)  5
D)  6E) A) and B)
F) A) and C)

Question 9

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. What is the value of the marginal product of labor for the third worker?

Accepted Answer

A)  20 units
B)  $200
C)  $2,720
D)  $3,200E) None of the above
F) A) and B)

Question 10

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 $48.

Accepted Answer

A) True 
 B)False

Question 11

Scenario 18-8
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: A decreasing number of students in U.S. primary and secondary schools decreases the number of students entering college, decreasing the output price of university economics professors' services.
-Refer to Scenario 18-8. As a result of these two events, holding all else constant, 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.E) All of the above
F) A) and B)

Question 12

Suppose that technological progress increases the productivity of teachers. Which of the following accurately describes the labor market for teachers after the technological change? Equilibrium wages will

Accepted Answer

A)  rise, and the equilibrium quantity of teachers employed will fall.
B)  rise, and the equilibrium quantity of teachers employed will rise.
C)  fall, and the equilibrium quantity of teachers employed will fall.
D)  fall, and the equilibrium quantity of teachers employed will rise.E) All of the above
F) A) and B)

Question 13

Explain how a firm values the contribution of workers to its profitability. Would a profit-maximizing competitive firm ever stop increasing employment as long as marginal product is rising? Explain your answer.

Accepted Answer

A firm values the contribution of a work...

Question 14

For a competitive, profit-maximizing firm, the labor demand curve is the same as the

Accepted Answer

A)  marginal cost curve.
B)  value of marginal product curve.
C)  production function.
D)  profit function.E) A) and D)
F) B) and C)

Question 15

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school increases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium quantity of doctors will

Accepted Answer

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

Question 16

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) A) and B)
F) A) and D)

Question 17

In economics, the term capital refers to

Accepted Answer

A)  money.
B)  stocks and bonds.
C)  equipment and structures used in production.
D)  All of the above are correct.E) None of the above
F) C) and D)

Question 18

Table 18-7 
-Refer to Table 18-7. What is the value of the cell labeled GG?

Accepted Answer

A)  $400
B)  $100
C)  $0
D)  −$100E) A) and B)
F) All of the above

Question 19

The wage is to the labor market as the

Accepted Answer

A)  rental price of capital is to the capital market.
B)  purchase price of capital is to the capital market.
C)  supply of land is to the land market.
D)  demand for land is to the land market.E) None of the above
F) A) and B)

Question 20

Suppose an influenza pandemic were to significantly decrease the population of a country. We would predict a decrease in the marginal product of land in that country.

Accepted Answer

A) True 
 B)False

Exam 18: The Markets for the Factors of Production

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. What is the value of the marginal product of labor for the third worker?

Correct Answer
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Table 18-7 -Refer to Table 18-7. What is the value of the cell labeled GG?

Correct Answer
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Table 18-1 -Refer to Table 18-1. Suppose that the firm pays its workers $80 per day. Each unit of output sells for $15. How many days of labor should the firm hire?

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

Correct Answer
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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. Suppose the firm sells each box of envelopes that it produces for $6. What is the marginal profit of the fourth worker?

Correct Answer
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Suppose that the market for labor is initially in equilibrium. Suppose that workers' tastes change so that they choose to retire at age 55 rather than age 67. Then the equilibrium wage

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 $48.

Correct Answer
verified

Suppose that technological progress increases the productivity of teachers. Which of the following accurately describes the labor market for teachers after the technological change? Equilibrium wages will

Correct Answer
verified

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school increases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium quantity of doctors will

Correct Answer
verified

Figure 18-7 -Refer to Figure 18-7. Assume W₁ = $20 and W₂ = $18, and the market is always in equilibrium. A shift of the labor supply curve from S₁ to S₂ would

Correct Answer
verified

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?

Correct Answer
verified

In economics, the term capital refers to

Correct Answer
verified

If the demand for labor decreases and the supply of labor is unchanged, then the opportunity cost of leisure will decrease.

Correct Answer
verified

Suppose an influenza pandemic were to significantly decrease the population of a country. We would predict a decrease in the marginal product of land in that country.

Correct Answer
verified

Table 18-3 -Refer to Table 18-3. Which firm's production function exhibits negative marginal product?

Correct Answer
verified

The wage is to the labor market as the

Correct Answer
verified

Explain how a firm values the contribution of workers to its profitability. Would a profit-maximizing competitive firm ever stop increasing employment as long as marginal product is rising? Explain your answer.

Correct Answer
verified
A firm values the contribution of a work...
View Answer

When deciding whether to hire an additional worker, firms need only consider how the additional worker would affect

Correct Answer
verified

For a competitive, profit-maximizing firm, the labor demand curve is the same as the

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

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. What is the value of the marginal product of labor for the third worker?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. What is the value of the cell labeled GG?

Correct AnswerverifiedShow Answer

Table 18-1 -Refer to Table 18-1. Suppose that the firm pays its workers $80 per day. Each unit of output sells for $15. How many days of labor should the firm hire?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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. Suppose the firm sells each box of envelopes that it produces for $6. What is the marginal profit of the fourth worker?

Correct AnswerverifiedShow Answer

Suppose that the market for labor is initially in equilibrium. Suppose that workers' tastes change so that they choose to retire at age 55 rather than age 67. Then the equilibrium wage

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 $48.

Correct AnswerverifiedShow Answer

Suppose that technological progress increases the productivity of teachers. Which of the following accurately describes the labor market for teachers after the technological change? Equilibrium wages will

Correct AnswerverifiedShow Answer

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school increases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium quantity of doctors will

Correct AnswerverifiedShow Answer

Figure 18-7 -Refer to Figure 18-7. Assume W1 = $20 and W2 = $18, and the market is always in equilibrium. A shift of the labor supply curve from S1 to S2 would

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

In economics, the term capital refers to

Correct AnswerverifiedShow Answer

If the demand for labor decreases and the supply of labor is unchanged, then the opportunity cost of leisure will decrease.

Correct AnswerverifiedShow Answer

Suppose an influenza pandemic were to significantly decrease the population of a country. We would predict a decrease in the marginal product of land in that country.

Correct AnswerverifiedShow Answer

Table 18-3 -Refer to Table 18-3. Which firm's production function exhibits negative marginal product?

Correct AnswerverifiedShow Answer

The wage is to the labor market as the

Correct AnswerverifiedShow Answer

Explain how a firm values the contribution of workers to its profitability. Would a profit-maximizing competitive firm ever stop increasing employment as long as marginal product is rising? Explain your answer.

Correct AnswerverifiedA firm values the contribution of a work...View AnswerShow Answer

When deciding whether to hire an additional worker, firms need only consider how the additional worker would affect

Correct AnswerverifiedShow Answer

For a competitive, profit-maximizing firm, the labor demand curve is the same as the

Correct AnswerverifiedShow Answer

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Figure 18-7 -Refer to Figure 18-7. Assume W₁ = $20 and W₂ = $18, and the market is always in equilibrium. A shift of the labor supply curve from S₁ to S₂ would

Correct Answer
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Correct Answer
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A firm values the contribution of a work...
View Answer

Correct Answer
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Correct Answer
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