Question 1

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.The marginal product of the fourth worker is

Accepted Answer

A)   60 units of output.
B)   75 units of output.
C)   285 units of output.
D)   345 units of output.E) A) and C)
F) B) and C)

Question 2

An increase in the supply of labor has the effect of decreasing the

Accepted Answer

A)   wage.
B)   marginal product of labor.
C)   value of the marginal product of labor.
D)   All of the above are correct.E) B) and C)
F) C) and D)

Question 3

When economists refer to a firm's capital,they are describing the

Accepted Answer

A)   markets for final goods and services.
B)   stock of equipment and buildings used in production.
C)   amount of bank financing used by the firm.
D)   amount of financing provided by the equity markets.E) A) and B)
F) A) and C)

Question 4

The Black Death in fourteenth-century Europe resulted in

Accepted Answer

A)   a lower marginal product of land.
B)   a lower marginal product of labor of surviving workers.
C)   economic hardship for surviving peasants.
D)   economic prosperity for surviving landowners.E) A) and B)
F) C) and D)

Question 5

Suppose that the labor market for high school chemistry teachers is initially in equilibrium.Chemistry teachers use laboratory chemicals as an important part of their jobs.New environmental regulations ban the use of many chemicals,which means that fewer laboratory chemicals are available for high school chemistry teachers to use in their jobs.What happens to the equilibrium wage and quantity of high school chemistry teachers?

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) All of the above

Question 6

A change in the supply of any one factor alters the earnings of all the other factors.

Accepted Answer

A) True 
 B)False

Question 7

Figure 18-5
The figure shows a particular profit-maximizing,competitive firm's value-of-marginal-product (VMP) curve.On the horizontal axis,L represents the number of workers.The time frame is daily. 
-Refer to Figure 18-5.The value-of-marginal-product curve that is drawn could be relabeled as the firm's

Accepted Answer

A)   production function.
B)   total revenue curve.
C)   labor supply curve.
D)   labor demand curve.E) None of the above
F) C) and D)

Question 8

Figure 18-10 1 to D2? A)  technological progress B)  an increase in the price of firms' output C)  an increase in the supply of a relevant factor of production other than labor D)  All of the above are correct." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-10.Which of the following would shift of the labor demand curve from D1 to D2?

Accepted Answer

A)   technological progress
B)   an increase in the price of firms' output
C)   an increase in the supply of a relevant factor of production other than labor
D)   All of the above are correct.E) A) and D)
F) None of the above

Question 9

When labor is the only input a firm uses,the marginal cost of a unit of output can be defined as

Accepted Answer

A)   the marginal revenue multiplied by the wage.
B)   the marginal product of labor multiplied by the wage.
C)   the wage divided by the marginal product of labor.
D)   the marginal product of labor divided by the wage.E) All of the above
F) B) and C)

Question 10

Diminishing marginal product occurs when

Accepted Answer

A)   the marginal product of an input increases as the quantity of the input increases.
B)   the marginal product of an input decreases as the quantity of the input increases.
C)   total output increases as the quantity of an input increases.
D)   total output decreases as the quantity of an input increases.E) A) and D)
F) B) and C)

Question 11

The supply of labor in any one market depends on the opportunities available in other markets.

Accepted Answer

A) True 
 B)False

Question 12

Owners of land are compensated according to the

Accepted Answer

A)   absolute level of production from the land.
B)   number of laborers the land can support.
C)   purchase price of the land stock.
D)   value of the marginal product of land.E) A) and B)
F) B) and D)

Question 13

The equilibrium rental income paid to landowners at any point in time equals the

Accepted Answer

A)   purchase price of land.
B)   value of the marginal product of land.
C)   marginal product of land.
D)   wage paid to laborers.E) B) and C)
F) None of the above

Question 14

Suppose that the labor market for high school chemistry teachers is initially in equilibrium.Chemistry teachers use laboratory chemicals as an important part of their jobs.New environmental regulations ban the use of many chemicals,which means that fewer laboratory chemicals are available for high school chemistry teachers to use in their jobs.In the market for high school chemistry teachers,the equilibrium wage

Accepted Answer

A)   increases because the marginal productivity of high school chemistry teachers increases.
B)   decreases because the marginal productivity of high school chemistry teachers decreases.
C)   increases because the supply of high school chemistry teachers increases.
D)   decreases because the supply of high school chemistry teachers decreases.E) A) and C)
F) B) and D)

Question 15

Economists define capital as the

Accepted Answer

A)   accumulation of goods produced in the past that are being used in the present to produce new goods and services.
B)   goods and services that are most affected by changes in technology.
C)   factors of production that can be rented by firms.
D)   factors of production that can be purchased by firms.E) B) and D)
F) A) and B)

Question 16

Table 18-10
Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day.
 
-Refer to Table 18-10.What is the value of the marginal product of the second worker?

Accepted Answer

A)   $180
B)   $450
C)   $950
D)   $1,080E) B) and C)
F) A) and B)

Question 17

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 18

The rental price of capital is determined by the

Accepted Answer

A)   forces of supply and demand in capital markets.
B)   amount of equity that is generated in equity markets.
C)   amount of bond financing used by profit-maximizing firms.
D)   amount of dividends paid out to stockholders by profit-maximizing firms.E) A) and B)
F) A) and C)

Question 19

When an individual's income goes up,that individual may choose to supply less labor,resulting in a backward-sloping labor supply curve.

Accepted Answer

A) True 
 B)False

Question 20

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 D)
F) B) and D)

Exam 18: The Market for the Factors of Production

When labor is the only input a firm uses,the marginal cost of a unit of output can be defined as

Correct Answer
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Correct Answer
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A change in the supply of any one factor alters the earnings of all the other factors.

Correct Answer
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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
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When economists refer to a firm's capital,they are describing the

Correct Answer
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Figure 18-10 -Refer to Figure 18-10.Which of the following would shift of the labor demand curve from D₁ to D₂?

Correct Answer
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Correct Answer
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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.The marginal product of the fourth worker is

Correct Answer
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Owners of land are compensated according to the

Correct Answer
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The rental price of capital is determined by the

Correct Answer
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Diminishing marginal product occurs when

Correct Answer
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An increase in the supply of labor has the effect of decreasing the

Correct Answer
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Economists define capital as the

Correct Answer
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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

The equilibrium rental income paid to landowners at any point in time equals the

Correct Answer
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The Black Death in fourteenth-century Europe resulted in

Correct Answer
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The supply of labor in any one market depends on the opportunities available in other markets.

Correct Answer
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Table 18-10 Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day. -Refer to Table 18-10.What is the value of the marginal product of the second worker?

Correct Answer
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Correct Answer
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When an individual's income goes up,that individual may choose to supply less labor,resulting in a backward-sloping labor supply curve.

Correct Answer
verified

Exam 18: The Market for the Factors of Production

When labor is the only input a firm uses,the marginal cost of a unit of output can be defined as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A change in the supply of any one factor alters the earnings of all the other factors.

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 economists refer to a firm's capital,they are describing the

Correct AnswerverifiedShow Answer

Figure 18-10 -Refer to Figure 18-10.Which of the following would shift of the labor demand curve from D1 to D2?

Correct AnswerverifiedShow Answer

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.The marginal product of the fourth worker is

Correct AnswerverifiedShow Answer

Owners of land are compensated according to the

Correct AnswerverifiedShow Answer

The rental price of capital is determined by the

Correct AnswerverifiedShow Answer

Diminishing marginal product occurs when

Correct AnswerverifiedShow Answer

An increase in the supply of labor has the effect of decreasing the

Correct AnswerverifiedShow Answer

Economists define capital as the

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

The equilibrium rental income paid to landowners at any point in time equals the

Correct AnswerverifiedShow Answer

The Black Death in fourteenth-century Europe resulted in

Correct AnswerverifiedShow Answer

The supply of labor in any one market depends on the opportunities available in other markets.

Correct AnswerverifiedShow Answer

Table 18-10 Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day. -Refer to Table 18-10.What is the value of the marginal product of the second worker?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When an individual's income goes up,that individual may choose to supply less labor,resulting in a backward-sloping labor supply curve.

Correct AnswerverifiedShow Answer

Correct Answer
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Figure 18-10 -Refer to Figure 18-10.Which of the following would shift of the labor demand curve from D₁ to D₂?

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