Question 1

Rent,interest,and profit are all forms of income paid to the owners of

Accepted Answer

A)   aggregate stock.
B)   aggregate demand.
C)   firms and not-for-profit organizations.
D)   land and capital.E) C) and D)
F) A) and D)

Question 2

Suppose that due to flooding in Louisiana,100,000 farmers relocate from Louisiana to Texas.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and the rents earned by landowners in Texas?

Accepted Answer

A)   Both wages and rents would increase.
B)   Both wages and rents would decrease.
C)   Wages would increase,and rents would decrease.
D)   Wages would decrease,and rents would increase.E) C) and D)
F) A) and D)

Question 3

If one were to consider a university as a business,the computers in the computer labs would be regarded by economists as

Accepted Answer

A)   technology flows.
B)   mechanization flows.
C)   part of the university's stock of capital.
D)   a flow of services from the university's stock of capital.E) A) and D)
F) A) and C)

Question 4

Average productivity can be measured as total output divided by total units of labor.

Accepted Answer

A) True 
 B)False

Question 5

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

Accepted Answer

A) True 
 B)False

Question 6

What happens to the labor supply curve for academic economists when the wages paid to government economists increase?

Accepted Answer

A)   The labor supply curve for academic economists shifts to the left.
B)   The labor supply curve for academic economists shifts to the right.
C)   The labor supply curve for academic economists will become backward-sloping.
D)   The labor supply curve for academic economists will not change.E) All of the above
F) B) and D)

Question 7

If the wage exceeds the value of the marginal product of labor,then hiring another worker

Accepted Answer

A)   decreases the firm's total revenue.
B)   increases the firm's profit.
C)   decreases the firm's total cost.
D)   decreases the firm's profit.E) A) and D)
F) None of the above

Question 8

Consider the market for capital equipment.Suppose the value of the marginal product of capital equipment increases.Holding all else constant,what will happen to the equilibrium rental price of capital equipment?

Accepted Answer

A)   The equilibrium rental price of capital equipment increases.
B)   The equilibrium rental price of capital equipment decreases.
C)   The equilibrium rental price of capital equipment does not change.
D)   It is not possible to determine what will happen to the equilibrium rental price of capital equipment.E) A) and D)
F) All of the above

Question 9

What causes the labor demand curve to shift?

Accepted Answer

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

Question 10

Scenario 18-1
Harry owns a snow-removal business.He hires workers to shovel driveways for him during the winter.The first worker he hires can shovel twelve driveways in one day.When Harry hires two workers,they can shovel a total of 22 driveways in one day.When Harry hires a third worker,he shovels an additional eight driveways in one day.
-Refer to Scenario 18-1.What is the total productivity of three workers?

Accepted Answer

A)   12
B)   22
C)   30
D)   42E) A) and B)
F) A) and C)

Question 11

Figure 18-5 
-Refer to Figure 18-5.If the price of apples decreases,the wage will

Accepted Answer

A)   increase and more apple pickers will be hired.
B)   decrease and more apple pickers will be hired.
C)   increase and fewer apple pickers will be hired.
D)   decrease and fewer apple pickers will be hired.E) A) and C)
F) B) and C)

Question 12

A recent flood in the Midwest has destroyed much of the farmland that lies in fertile regions near the rivers.Describe the effect of the flood on the marginal productivity of land,labor,and capital.How would the flood affect the price of inputs? Provide some examples.

Accepted Answer

The flood would increase the marginal pr...

Question 13

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) B) and C)
F) C) and D)

Question 14

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 $12 per unit,and it pays each of its workers $700 per week.How many workers will the firm hire to maximize its profit?

Accepted Answer

A)   2
B)   3
C)   4
D)   5E) C) and D)
F) A) and C)

Question 15

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 16

The factors of production are best defined as the

Accepted Answer

A)   output produced from raw materials.
B)   inputs used to produce goods and services.
C)   wages paid to the workforce.
D)   goods and services sold in the market.E) A) and C)
F) A) and B)

Question 17

The marginal product of land depends on the quantity of land that is available.

Accepted Answer

A) True 
 B)False

Question 18

When a firm decides to retain its earnings instead of paying dividends,the stockholders necessarily suffer.

Accepted Answer

A) True 
 B)False

Question 19

Table 18-3
 
-Refer to Table 18-3.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $2.50 in a competitive market and the firm pays each unit of labor a wage equal to $225 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) None of the above
F) B) and C)

Question 20

The demand for computer programmers is inseparably tied to the supply of computer software.

Accepted Answer

A) True 
 B)False

Exam 18: The Markets for the Factors of Production

Average productivity can be measured as total output divided by total units of labor.

Correct Answer
verified

The marginal product of land depends on the quantity of land that is available.

Correct Answer
verified

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

Correct Answer
verified

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 $12 per unit,and it pays each of its workers $700 per week.How many workers will the firm hire to maximize its profit?

Correct Answer
verified

Correct Answer
verified

Figure 18-5 -Refer to Figure 18-5.If the price of apples decreases,the wage will

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

What happens to the labor supply curve for academic economists when the wages paid to government economists increase?

Correct Answer
verified

When a firm decides to retain its earnings instead of paying dividends,the stockholders necessarily suffer.

Correct Answer
verified

If one were to consider a university as a business,the computers in the computer labs would be regarded by economists as

Correct Answer
verified

Correct Answer
verified

Consider the market for capital equipment.Suppose the value of the marginal product of capital equipment increases.Holding all else constant,what will happen to the equilibrium rental price of capital equipment?

Correct Answer
verified

The factors of production are best defined as the

Correct Answer
verified

Rent,interest,and profit are all forms of income paid to the owners of

Correct Answer
verified

What causes the labor demand curve to shift?

Correct Answer
verified

If the wage exceeds the value of the marginal product of labor,then hiring another worker

Correct Answer
verified

Suppose that due to flooding in Louisiana,100,000 farmers relocate from Louisiana to Texas.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and the rents earned by landowners in Texas?

Correct Answer
verified

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

Correct Answer
verified

The demand for computer programmers is inseparably tied to the supply of computer software.

Correct Answer
verified

A recent flood in the Midwest has destroyed much of the farmland that lies in fertile regions near the rivers.Describe the effect of the flood on the marginal productivity of land,labor,and capital.How would the flood affect the price of inputs? Provide some examples.

Correct Answer
verified
The flood would increase the marginal pr...
View Answer

Exam 18: The Markets for the Factors of Production

Average productivity can be measured as total output divided by total units of labor.

Correct AnswerverifiedShow Answer

The marginal product of land depends on the quantity of land that is available.

Correct AnswerverifiedShow Answer

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

Correct AnswerverifiedShow Answer

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 $12 per unit,and it pays each of its workers $700 per week.How many workers will the firm hire to maximize its profit?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 18-5 -Refer to Figure 18-5.If the price of apples decreases,the wage will

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

What happens to the labor supply curve for academic economists when the wages paid to government economists increase?

Correct AnswerverifiedShow Answer

When a firm decides to retain its earnings instead of paying dividends,the stockholders necessarily suffer.

Correct AnswerverifiedShow Answer

If one were to consider a university as a business,the computers in the computer labs would be regarded by economists as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Consider the market for capital equipment.Suppose the value of the marginal product of capital equipment increases.Holding all else constant,what will happen to the equilibrium rental price of capital equipment?

Correct AnswerverifiedShow Answer

The factors of production are best defined as the

Correct AnswerverifiedShow Answer

Rent,interest,and profit are all forms of income paid to the owners of

Correct AnswerverifiedShow Answer

What causes the labor demand curve to shift?

Correct AnswerverifiedShow Answer

If the wage exceeds the value of the marginal product of labor,then hiring another worker

Correct AnswerverifiedShow Answer

Suppose that due to flooding in Louisiana,100,000 farmers relocate from Louisiana to Texas.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and the rents earned by landowners in Texas?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The demand for computer programmers is inseparably tied to the supply of computer software.

Correct AnswerverifiedShow Answer

A recent flood in the Midwest has destroyed much of the farmland that lies in fertile regions near the rivers.Describe the effect of the flood on the marginal productivity of land,labor,and capital.How would the flood affect the price of inputs? Provide some examples.

Correct AnswerverifiedThe flood would increase the marginal pr...View AnswerShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
The flood would increase the marginal pr...
View Answer