Question 1

For any competitive labor market, changes that decrease the number of workers will _______ labor supply and shift the labor supply curve to the _______.

Accepted Answer

A)  decrease; left
B)  increase; right
C)  decrease; right
D)  increase; leftE) A) and D)
F) A) and C) A

Question 2

In order to see how the labor market works as a whole, we must:

Accepted Answer

A)  add up all the supply curves of individual workers and the demand curves of individual firms to find market level supply and demand.
B)  sum the observed equilibrium wages across all individual markets and take the weighted average.
C)  add up all the demand curves of individual workers and the supply curves of individual firms to find market level demand and supply.
D)  None of these are true.E) C) and D)
F) B) and C)

Question 3

When labor is substitutable between two markets, we should expect:

Accepted Answer

A)  the two markets to pay the same or similar equilibrium wage.
B)  those markets to produce substitutable outputs.
C)  wages to gradually decrease in these markets due to competition.
D)  All of these are true.E) A) and B)
F) None of the above

Question 4

The demand for factors of production is known as _______ demand.

Accepted Answer

A)  primary
B)  derived
C)  implied
D)  productionE) A) and D)
F) B) and C)

Question 5

Consider the labor market for public defense lawyers. Suppose the salaries paid to private sector lawyers increase. Which of the following statements is true? The opportunity cost of working as a public defense lawyer has increased. The wage for public defense lawyers will decrease. The labor supply of public defense lawyers will decrease.

Accepted Answer

A)  II only
B)  II and III only
C)  I and III only
D)  I, II, and IIIE) A) and B)
F) All of the above

Question 6

Farming in poor countries is considered to be:

Accepted Answer

A)  capital intensive.
B)  labor intensive.
C)  production intensive.
D)  cost intensive.E) All of the above
F) B) and C)

Question 7

The value of marginal product graphed against the quantity of a given input used gives us the value of marginal product curve, which is the same as the _______ curve.

Accepted Answer

A)  total product
B)  total revenue
C)  demand
D)  value productE) None of the above
F) B) and C)

Question 8

Which of the following is not true of the intersection of the labor supply and labor demand curves?

Accepted Answer

A)  They only intersect once.
B)  They intersect at the equilibrium wage.
C)  They intersect at the profit-maximizing quantity for the firms in the market.
D)  They intersect at the revenue-maximizing quantity for the firms in the market.E) All of the above
F) A) and D)

Question 9

When individuals are debating whether to supply labor in a competitive market, they think about all of the following except:

Accepted Answer

A)  the cost in terms of forgone leisure.
B)  the benefit of more income for each hour worked.
C)  whether the benefits outweigh the costs.
D)  the level of profits they bring to the firm.E) A) and D)
F) A) and C)

Question 10

Labor supply will decrease when wages increase if the _______ effect outweighs the _______ effect.

Accepted Answer

A)  price; income
B)  income; price
C)  substitution; income
D)  price; substitutionE) B) and C)
F) A) and D)

Question 11

In most real-world labor markets, the _______ effect usually dominates, and thus we assume a(n) _______ supply curve.

Accepted Answer

A)  price; downward-sloping
B)  income; downward-sloping
C)  price; upward-sloping
D)  income; upward-slopingE) A) and C)
F) B) and D)

Question 12

If it is a cultural norm to believe that "a busy person is an important person," then we would expect that labor _______ in this culture will be relatively _______ at any wage.

Accepted Answer

A)  supply; greater
B)  demand; greater
C)  supply; lower
D)  demand; lowerE) None of the above
F) C) and D) A

Question 13

If the supply of another input used decreases, the marginal product of labor can:

Accepted Answer

A)  decrease, decreasing the supply of labor.
B)  increase, increasing the demand for labor.
C)  decrease, increasing the demand for labor.
D)  increase, increasing the supply of labor.E) All of the above
F) B) and C)

Question 14

Jian works as a delivery man and can work as many hours as he likes for $12 an hour. He typically works 40 hours a week. Recently, his pay has been cut. If Jian decides to work _______, this indicates that the _______ effect dominates his labor supply decision.

Accepted Answer

A)  more hours; price
B)  less hours; income
C)  more hours; income
D)  the same number of hours; priceE) A) and C)
F) None of the above

Question 15

The demand for factor inputs:

Accepted Answer

A)  depends upon the markets for the goods that the inputs are used to produce.
B)  is referred to as imputed demand.
C)  is independent of how much the inputs contribute to the value of the end product.
D)  is generally constant across most factor markets.E) B) and C)
F) A) and C)

Question 16

Consider the labor market for neurologists. Suppose the salaries paid to cardiologists decrease. Which of the following statements is true? The labor demand for neurologists will increase. The wage for neurologists will decrease. The opportunity cost of working as a neurologist has increased.

Accepted Answer

A)  II only
B)  I and III only
C)  I and II only
D)  I, II, and IIIE) A) and D)
F) A) and C)

Question 17

The decrease in the quantity of labor supplied due to the greater demand for leisure caused by a higher income is called the:

Accepted Answer

A)  income effect.
B)  price effect.
C)  substitution effect.
D)  labor effect.E) B) and D)
F) A) and D)

Question 18

In general, people who say they are investing:

Accepted Answer

A)  have lent their money to someone who will use it to buy physical capital.
B)  have put money in the stock market.
C)  hold stocks or bonds.
D)  All of these are true.E) A) and B)
F) All of the above

Question 19

A "capitalist" may be someone who:

Accepted Answer

A)  owns stock.
B)  holds a treasury bond.
C)  opens a retirement account.
D)  All of these are true.E) B) and D)
F) All of the above D

Question 20

For any competitive labor market, what change would have to occur to cause labor supply to decrease and the labor supply curve to shift to the left?

Accepted Answer

A)  Number of firms increases
B)  None of these statements are true.
C)  Number of workers increases
D)  Opportunity cost of work increasesE) All of the above
F) A) and B)

Exam 16: The Facts of Production

For any competitive labor market, changes that decrease the number of workers will _ labor supply and shift the labor supply curve to the _.

Correct Answer
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A

In order to see how the labor market works as a whole, we must:

Correct Answer
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When labor is substitutable between two markets, we should expect:

Correct Answer
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The demand for factors of production is known as _______ demand.

Correct Answer
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Correct Answer
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Farming in poor countries is considered to be:

Correct Answer
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The value of marginal product graphed against the quantity of a given input used gives us the value of marginal product curve, which is the same as the _______ curve.

Correct Answer
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Which of the following is not true of the intersection of the labor supply and labor demand curves?

Correct Answer
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When individuals are debating whether to supply labor in a competitive market, they think about all of the following except:

Correct Answer
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Labor supply will decrease when wages increase if the _ effect outweighs the _ effect.

Correct Answer
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In most real-world labor markets, the _ effect usually dominates, and thus we assume a(n) _ supply curve.

Correct Answer
verified

If it is a cultural norm to believe that "a busy person is an important person," then we would expect that labor _ in this culture will be relatively _ at any wage.

Correct Answer
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A

If the supply of another input used decreases, the marginal product of labor can:

Correct Answer
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Jian works as a delivery man and can work as many hours as he likes for $12 an hour. He typically works 40 hours a week. Recently, his pay has been cut. If Jian decides to work _, this indicates that the _ effect dominates his labor supply decision.

Correct Answer
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The demand for factor inputs:

Correct Answer
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Consider the labor market for neurologists. Suppose the salaries paid to cardiologists decrease. Which of the following statements is true? The labor demand for neurologists will increase. The wage for neurologists will decrease. The opportunity cost of working as a neurologist has increased.

Correct Answer
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The decrease in the quantity of labor supplied due to the greater demand for leisure caused by a higher income is called the:

Correct Answer
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In general, people who say they are investing:

Correct Answer
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A "capitalist" may be someone who:

Correct Answer
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D

For any competitive labor market, what change would have to occur to cause labor supply to decrease and the labor supply curve to shift to the left?

Correct Answer
verified

Exam 16: The Facts of Production

For any competitive labor market, changes that decrease the number of workers will _______ labor supply and shift the labor supply curve to the _______.

Correct AnswerverifiedA

In order to see how the labor market works as a whole, we must:

Correct AnswerverifiedShow Answer

When labor is substitutable between two markets, we should expect:

Correct AnswerverifiedShow Answer

The demand for factors of production is known as _______ demand.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Farming in poor countries is considered to be:

Correct AnswerverifiedShow Answer

The value of marginal product graphed against the quantity of a given input used gives us the value of marginal product curve, which is the same as the _______ curve.

Correct AnswerverifiedShow Answer

Which of the following is not true of the intersection of the labor supply and labor demand curves?

Correct AnswerverifiedShow Answer

When individuals are debating whether to supply labor in a competitive market, they think about all of the following except:

Correct AnswerverifiedShow Answer

Labor supply will decrease when wages increase if the _______ effect outweighs the _______ effect.

Correct AnswerverifiedShow Answer

In most real-world labor markets, the _______ effect usually dominates, and thus we assume a(n) _______ supply curve.

Correct AnswerverifiedShow Answer

If it is a cultural norm to believe that "a busy person is an important person," then we would expect that labor _______ in this culture will be relatively _______ at any wage.

Correct AnswerverifiedA

If the supply of another input used decreases, the marginal product of labor can:

Correct AnswerverifiedShow Answer

Jian works as a delivery man and can work as many hours as he likes for $12 an hour. He typically works 40 hours a week. Recently, his pay has been cut. If Jian decides to work _______, this indicates that the _______ effect dominates his labor supply decision.

Correct AnswerverifiedShow Answer

The demand for factor inputs:

Correct AnswerverifiedShow Answer

Consider the labor market for neurologists. Suppose the salaries paid to cardiologists decrease. Which of the following statements is true? The labor demand for neurologists will increase. The wage for neurologists will decrease. The opportunity cost of working as a neurologist has increased.

Correct AnswerverifiedShow Answer

The decrease in the quantity of labor supplied due to the greater demand for leisure caused by a higher income is called the:

Correct AnswerverifiedShow Answer

In general, people who say they are investing:

Correct AnswerverifiedShow Answer

A "capitalist" may be someone who:

Correct AnswerverifiedD

For any competitive labor market, what change would have to occur to cause labor supply to decrease and the labor supply curve to shift to the left?

Correct AnswerverifiedShow Answer

For any competitive labor market, changes that decrease the number of workers will _ labor supply and shift the labor supply curve to the _.

Correct Answer
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A

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Labor supply will decrease when wages increase if the _ effect outweighs the _ effect.

Correct Answer
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In most real-world labor markets, the _ effect usually dominates, and thus we assume a(n) _ supply curve.

Correct Answer
verified

If it is a cultural norm to believe that "a busy person is an important person," then we would expect that labor _ in this culture will be relatively _ at any wage.

Correct Answer
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A

Correct Answer
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Jian works as a delivery man and can work as many hours as he likes for $12 an hour. He typically works 40 hours a week. Recently, his pay has been cut. If Jian decides to work _, this indicates that the _ effect dominates his labor supply decision.

Correct Answer
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D

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