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Over time, carpenters become aware of more attractive employment opportunities outside of carpentry. Does this development affect the demand for carpenters, or does it affect the supply of carpenters?

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The change in altern...

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Labor-augmenting technological advances increase the marginal productivity of labor.

A) True
B) False

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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. 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. What is the marginal product of the fourth unit of labor? A) 40 units B) 50 units C) 60 units D) 180 units -Refer to Table 18-9. What is the marginal product of the fourth unit of labor?


A) 40 units
B) 50 units
C) 60 units
D) 180 units

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

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Capital, labor, and land


A) have derived demands.
B) are factors of production.
C) are inputs used in the production of goods and services.
D) All of the above are correct.

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

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Suppose that the labor market for life guards is initially in equilibrium. Whistles are an important safety tool that life guards use as a part of their jobs. A fire destroys the largest factory that produces whistles. What happens to the equilibrium wage and quantity of life guards?


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) All of the above
F) A) and B)

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Which of the following would increase the demand for labor? (i) A decrease in the output price (ii) An increase in the output price (iii) A labor-saving technological advance (iv) A labor-augmenting technological advance


A) (i) only
B) (i) and (iii) only
C) (ii) only
D) (ii) and (iv) only

E) A) and B)
F) None of the above

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Table 18-6 Table 18-6 -Refer to Table 18-6. What is the value for the cell labeled DD? A) −$100 B) $300 C) $100 D) $50 -Refer to Table 18-6. What is the value for the cell labeled DD?


A) −$100
B) $300
C) $100
D) $50

E) All of the above
F) A) and B)

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Labor supply curves are always upward sloping.

A) True
B) False

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Christine works for a firm that makes tires for cars. How is Christine's wage affected if the demand for cars increases?

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The increase in the demand for...

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Which of the following could decrease the labor-supply curve for teachers?


A) a decrease in the wages paid to teachers
B) an increase in immigration
C) a change in the work preferences of men, with more of them preferring to be stay-at-home fathers
D) any factor that would decrease the labor-demand curve

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

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The quantity available of one factor of production can affect the marginal product of other factors.

A) True
B) False

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Who has a greater opportunity cost of leisure - a president of a major corporation or a babysitter?

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The opportunity cost...

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What are the three most important factors of production?

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The three most impor...

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Figure 18-11 Figure 18-11 -Refer to Figure 18-11. What is measured on the vertical axis of the graph? A) the rate of technological progress B) wages paid to workers in markets where capital goods are produced C) wages paid to workers in markets where capital goods are not produced D) the rental price of capital -Refer to Figure 18-11. What is measured on the vertical axis of the graph?


A) the rate of technological progress
B) wages paid to workers in markets where capital goods are produced
C) wages paid to workers in markets where capital goods are not produced
D) the rental price of capital

E) All of the above
F) None of the above

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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. 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. What is the marginal product of the fifth unit of labor? A) 30 units B) 40 units C) 50 units D) 250 units -Refer to Table 18-9. What is the marginal product of the fifth unit of labor?


A) 30 units
B) 40 units
C) 50 units
D) 250 units

E) A) and D)
F) All of the above

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When a firm experiences diminishing marginal product, what is the shape of the curve that represents the value of the marginal product of labor?


A) U-shaped
B) vertical
C) downward sloping
D) upward sloping

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

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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. 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. 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 and such that .) -Refer to Figure 18-1. 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 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. 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 and such that .) and 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. 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 and such that .) such that 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. 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 and such that .) .)

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The marginal product of the fourth mecha...

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Figure 18-3 Figure 18-3 -Refer to Figure 18-3. Suppose that the price of the output is $20. What is the value of the marginal product of the third worker? A) $2 B) $10 C) $40 D) $280 -Refer to Figure 18-3. Suppose that the price of the output is $20. What is the value of the marginal product of the third worker?


A) $2
B) $10
C) $40
D) $280

E) A) and B)
F) All of the above

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Consider the market for university economics professors. Suppose the opportunity cost of going to graduate school to get a Ph.D. in economics increases for many individuals. Suppose it generally takes about five years to get a Ph.D. in economics. Holding all else constant, in five years the equilibrium wage for university economics professors will


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

E) A) and D)
F) None of the above

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Christopher owns and manages a small tea shop. We assume that Christopher (i) Does not directly care about the quantity of tea that he sells. (ii) Does not directly care about the number of workers that he hires. (iii) Wants to maximize the quantity of tea that he sells. (iv) Wants to minimize the number of workers that he hires. (v) Wants to maximize profits.


A) (i) and (ii) only
B) (i) , (ii) , and (v) only
C) (iii) and (iv) only
D) (iii) , (iv) , and (v) only

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

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