Question 1

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, the equilibrium quantity of health care employees would

Accepted Answer

A)  increase.
B)  decrease.
C)  not change.
D)  It is not possible to determine what happens to the equilibrium quantity.E) All of the above
F) A) and D)

Question 2

Figure 18-1. 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 18-1. If the shop charges $120 per repair and pays each of its mechanics a wage of $400 per day, then what is the marginal profit of the third mechanic?

Accepted Answer

The marginal product of the th...

Question 3

Table 18-B
Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. 
-Refer to Table 18-B. What is the second worker's marginal product of labor?

Accepted Answer

A)  350 cupcakes
B)  150 cupcakes
C)  125 cupcakes
D)  100 cupcakesE) B) and D)
F) B) and C)

Question 4

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) B) and C)
F) A) and C)

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) None of the above
F) C) and D)

Question 6

For competitive firms, the curve that represents the value of marginal product of labor is the same as the demand for labor curve.

Accepted Answer

A) True 
 B)False

Question 7

Figure 18-1. 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 18-1. If the shop charges $150 per repair and pays each of its mechanics a wage of $700 per day, then what is the marginal profit of the second mechanic?

Accepted Answer

The marginal product of the se...

Question 8

Figure 18-4
The graph below illustrates the market for nurses who work in doctors' offices. 
-Refer to Figure 18-4. If doctors' offices adopt new labor-saving technologies, what happens in the market for nurses?

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) C) and D)
F) All of the above

Question 9

Competitive firms decide how much output to sell by producing output until the price of the good equals

Accepted Answer

A)  marginal product.
B)  the value of marginal product.
C)  marginal cost.
D)  marginal profit.E) B) and D)
F) A) and D)

Question 10

The distinction between purchase price and rental price applies to which factor(s)  of production?

Accepted Answer

A)  land only
B)  capital only
C)  land and capital only
D)  land, capital, and laborE) None of the above
F) A) and C)

Question 11

Sonny's Surfer Shop produces and sells custom surf boards. Assume that labor is the only input that varies for the firm. The firm's owner has determined that if she hires 10 workers, the firm can produce 10 surf boards per day. If she hires 11 workers, the firm can produce 12 surfboards per day. The firm sells each surfboard for $2,000, and it pays each of its workers $200 per day. Which of the following is correct?

Accepted Answer

A)  For the 11th worker, the value of the marginal product of labor is $400.
B)  For the 11th worker, the value of the marginal product of labor is $4,000.
C)  The firm should not hire the 11th worker since hiring this worker reduces profit.
D)  In order to justify hiring the 11th worker the firm will need to raise the price of a surfboard.E) A) and D)
F) All of the above

Question 12

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 figure illustrates the

Accepted Answer

A)  demand for labor.
B)  supply of labor.
C)  production function.
D)  wage function.E) A) and B)
F) None of the above

Question 13

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

Accepted Answer

A)  -$300
B)  -$200
C)  -$100
D)  $0E) B) and C)
F) A) and B)

Question 14

An upward-sloping labor supply curve means that

Accepted Answer

A)  workers prefer to buy more leisure time when their incomes increase.
B)  workers prefer to supply less labor when wages are high.
C)  an increase in the opportunity cost of leisure leads workers to increase the quantity of labor they supply.
D)  All of the above are correct.E) A) and D)
F) A) and B)

Question 15

Define monopsony.

Accepted Answer

A monopson...

Question 16

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. 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 D)

Question 17

Labor-augmenting technology causes which of the following? (i) 
The marginal productivity of labor increases.
(ii) 
The marginal productivity of labor decreases.
(iii) 
Labor demand shifts to the right.
(iv) 
Labor demand shifts to the left.

Accepted Answer

A)  (i)  only
B)  (ii)  only
C)  (i)  and (iii)  only
D)  (ii)  and (iv)  onlyE) B) and D)
F) All of the above

Question 18

The Black Death in fourteenth-century Europe resulted in

Accepted Answer

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

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Suppose that Chloe opens a dog grooming business in a local shopping center. Which of the following would be an example of a factor of production used by Chloe? (i) 
Her employees' time
(ii) 
Brushes, combs, scissors, and clippers
(iii) 
Shampoo, water, and flea prevention treatments
(iv) 
Chloe's time spent on bookkeeping and bill paying

Accepted Answer

A)  (i)  only
B)  (i)  and (ii)  only
C)  (i) , (ii) , and (iii)  only
D)  (i) , (ii) , (iii) , and (iv) E) A) and B)
F) None of the above

Exam 18: The Markets for the Factors of Production

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-B. What is the second worker's marginal product of labor?

Correct Answer
verified

The distinction between purchase price and rental price applies to which factor(s) of production?

Correct Answer
verified

Correct Answer
verified
The marginal product of the se...
View Answer

Correct Answer
verified
The marginal product of the th...
View Answer

Correct Answer
verified

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

Correct Answer
verified

Labor-augmenting technology causes which of the following? (i) The marginal productivity of labor increases. (ii) The marginal productivity of labor decreases. (iii) Labor demand shifts to the right. (iv) Labor demand shifts to the left.

Correct Answer
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For competitive firms, the curve that represents the value of marginal product of labor is the same as the demand for labor curve.

Correct Answer
verified

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. How many units of labor should the firm hire to maximize profit?

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

Correct Answer
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Define monopsony.

Correct Answer
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A monopson...
View Answer

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, the equilibrium quantity of health care employees would

Correct Answer
verified

The Black Death in fourteenth-century Europe resulted in

Correct Answer
verified

The rental price of capital is determined by the

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. The figure illustrates 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

Correct Answer
verified

Competitive firms decide how much output to sell by producing output until the price of the good equals

Correct Answer
verified

Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -Refer to Figure 18-4. If doctors' offices adopt new labor-saving technologies, what happens in the market for nurses?

Correct Answer
verified

An upward-sloping labor supply curve means that

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-B. What is the second worker's marginal product of labor?

Correct AnswerverifiedShow Answer

The distinction between purchase price and rental price applies to which factor(s) of production?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe marginal product of the se...View AnswerShow Answer

Correct AnswerverifiedThe marginal product of the th...View AnswerShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Labor-augmenting technology causes which of the following? (i) The marginal productivity of labor increases. (ii) The marginal productivity of labor decreases. (iii) Labor demand shifts to the right. (iv) Labor demand shifts to the left.

Correct AnswerverifiedShow Answer

For competitive firms, the curve that represents the value of marginal product of labor is the same as the demand for labor curve.

Correct AnswerverifiedShow Answer

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. How many units of labor should the firm hire to maximize profit?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Define monopsony.

Correct AnswerverifiedA monopson...View AnswerShow Answer

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, the equilibrium quantity of health care employees would

Correct AnswerverifiedShow Answer

The Black Death in fourteenth-century Europe resulted in

Correct AnswerverifiedShow Answer

The rental price of capital is determined by the

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 figure illustrates 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

Correct AnswerverifiedShow Answer

Competitive firms decide how much output to sell by producing output until the price of the good equals

Correct AnswerverifiedShow Answer

Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -Refer to Figure 18-4. If doctors' offices adopt new labor-saving technologies, what happens in the market for nurses?

Correct AnswerverifiedShow Answer

An upward-sloping labor supply curve means that

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The marginal product of the se...
View Answer

Correct Answer
verified
The marginal product of the th...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A monopson...
View Answer

Correct Answer
verified

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
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Correct Answer
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Correct Answer
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Correct Answer
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