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Exam 18: The Markets for the Factors of Production

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Question 231

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Approximately how much of the income in the United States is earned by workers in the form of wages and fringe benefits?

A) 25 percent
B) 50 percent
C) 67 percent
D) 90 percent

E) A) and D)
F) B) and C)

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Question 232

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Increases in productivity are not responsible for increased standards of living in the United States.

A) True
B) False

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Question 233

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Table 18-9 The following table shows the production function for a particular business. The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis. -Refer to Table 18-9. Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day. What is the value of the marginal product of labor for the fourth worker?

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?

A competitive, profit-maximizing pays its workers a wage of $200 per day and it sells its output for $10 per unit. Determine the marginal product, on a daily basis, of the last worker hired.

What are the three most important factors of production?

Competitive firms that maximize profits will hire workers until the value of the marginal product of labor

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

The demand for rocket scientists is inseparably linked to the supply of .

Angie was the last worker hired by a firm that is competitive in the labor market. The labor market always is in equilibrium. The firm sells its output for $24 per unit. When Angie was hired, the firm's output increased by 2 units per hour as a result. What is Angie's hourly wage?

Table 18-11 Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $2 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the value of the marginal product of the first worker?

Figure 18-12. 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 18-12. Suppose the shop charges $125 per repair. Over what interval of wages, W, would the shop maximize its profit by hiring exactly 4 mechanics? (Determine W1 and W2 such that W1 < W < W2.)

Which of the following would not shift a market labor supply curve to the right?

Figure 18-12. 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 18-12. If the shop charges $120 per repair, then what is the value of the marginal product of the third mechanic?

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 wages of university economics professors will

Factor markets are different from product markets in an important way because

The rental price of capital is the price a person pays to own the capital indefinitely.

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

Labor-saving technological advances decrease the marginal productivity of labor.

Suppose that workers immigrate to Minnesota from Canada. Which of the following correctly describes what would happen in the market for labor in Minnesota?