Question 1

When the competitive firm's value of the marginal product of labor intersects the market-wage level, the firm:

Accepted Answer

A)  can increase its profits by hiring any amount less than this point.
B)  can increase its profits by hiring any amount greater than this point.
C)  should consider shutting down because it is not earning profit.
D)  has found the profit-maximizing quantity of labor to hire.E) A) and C)
F) None of the above

Question 2

By comparing the value of marginal product with the cost of each input, a firm can find the _______ quantity of inputs to use.

Accepted Answer

A)  cost-maximizing
B)  profit-maximizing
C)  revenue-maximizing
D)  output-maximizingE) B) and C)
F) A) and D)

Question 3

If the graph shown displays a competitive labor market:  A) S represents an individual worker's supply of labor at each wage. B) S represents the firm's supply of jobs at each wage. C) P* represents the equilibrium wage. D) Q* represents the equilibrium wage." class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)  S represents an individual worker's supply of labor at each wage.
B)  S represents the firm's supply of jobs at each wage.
C)  P* represents the equilibrium wage.
D)  Q* represents the equilibrium wage.E) A) and B)
F) A) and C)

Question 4

The factors of production are the:

Accepted Answer

A)  ingredients that go into making any good or service.
B)  outputs that society as a whole has chosen to produce.
C)  costs and benefits of a given production process.
D)  inputs required for a given durable good.E) A) and B)
F) A) and C)

Question 5

The set of skills, knowledge, experience, and talent that determine the productivity of workers is called:

Accepted Answer

A)  human capital.
B)  physical capital.
C)  capital per worker.
D)  workers per capita.E) A) and D)
F) C) and D)

Question 6

An increase in the demand for spinach will cause an increase in the price for spinach and will affect the labor market for spinach farm workers. We would expect to see a(n) _______ in labor demand, resulting in _______ wages.

Accepted Answer

A)  decrease; higher
B)  increase; higher
C)  increase; lower
D)  decrease; lowerE) A) and B)
F) None of the above

Question 7

If a firm adopts a labor-augmenting piece of technology, the:

Accepted Answer

A)  marginal product of labor will increase.
B)  marginal product of labor will decrease.
C)  marginal supply of labor will increase.
D)  marginal supply of labor will decrease.E) All of the above
F) A) and C)

Question 8

Any event that increases the value of the marginal product of labor will:

Accepted Answer

A)  increase labor demand.
B)  decrease labor demand.
C)  increase labor supply.
D)  decrease labor supply.E) None of the above
F) B) and C)

Question 9

Farming in poor countries is considered to be _______ intensive because _______.

Accepted Answer

A)  labor; labor is relatively cheaper than machinery in poor countries
B)  capital; the labor used is concentrated and shared across a lot of capital
C)  labor; the tools in poor countries are more plentiful than the people
D)  capital; the tools in poor countries are relatively cheaper than the cost of hiring laborE) B) and C)
F) All of the above

Question 10

Safiya works at a factory for $15 an hour and typically works 40 hours a week. Safiya receives a pay raise and now earns $20 an hour. She decides to work 45 hours a week at her new wage. Which of the following statements is true about her decision to increase her hours worked upon receiving a wage increase?

Accepted Answer

A)  The price effect outweighed the income effect of her pay raise.
B)  Her labor supply curve is upward sloping.
C)  This type of outcome is typically observed.
D)  All of these statements are true.E) A) and D)
F) All of the above

Question 11

The supply of labor is determined by the:

Accepted Answer

A)  number of workers.
B)  opportunity cost of hiring labor.
C)  marginal product of labor.
D)  All of these are true.E) B) and D)
F) A) and B)

Question 12

The labor supply curve will be downward sloping if the _______ effect outweighs the _______ effect.

Accepted Answer

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

Question 13

A profit-seeking firm will choose the combination of inputs that maximizes profit, based on the:

Accepted Answer

A)  ratio of one factor of production to another.
B)  substitutability of each factor of production.
C)  price of each factor of production.
D)  total productivity of each factor of production.E) B) and D)
F) B) and C)

Question 14

If the current wage is below the market equilibrium level in a competitive labor market:

Accepted Answer

A)  firms will demand more labor than workers are willing to supply.
B)  firms will be able to offer lower wages and still fill all the jobs they have.
C)  unemployment will persist until the wage increases.
D)  All of these are true.E) A) and D)
F) A) and B)

Question 15

In the capital market, the rental price is what a:

Accepted Answer

A)  producer pays to use a factor of production for a certain period or task.
B)  producer pays to gain permanent ownership of a factor of production.
C)  consumer pays to use labor or land services for a certain period or task.
D)  consumer pays to gain permanent ownership of a factor of production.E) B) and C)
F) A) and B)

Question 16

In general, economists place all factors of production into which three categories?

Accepted Answer

A)  Land, labor, and capital
B)  Technology, land, and capital
C)  Land, labor, and technology
D)  Technology, labor, and capitalE) A) and B)
F) A) and C)

Question 17

If the labor market worked efficiently, then an effective minimum wage law would:

Accepted Answer

A)  cause unemployment.
B)  hold wages higher than the equilibrium price.
C)  help those who were employed at that price.
D)  All of these are true.E) A) and D)
F) A) and C)

Question 18

If the demand for hand-sewn leather shoes increases, the demand for leather will likely:

Accepted Answer

A)  also increase.
B)  decrease slightly.
C)  stay the same.
D)  drop significantly, and producers will use another material.E) B) and C)
F) None of the above

Question 19

In the market for labor, the monopsonist is the sole _______ and can push wages _______ the competitive wage.

Accepted Answer

A)  seller; below
B)  buyer; above
C)  buyer; below
D)  seller; aboveE) B) and D)
F) A) and B)

Question 20

The table shown displays the production schedule for a bakery in a competitive market that sells cookies for $2 each.

What is the value of the marginal product of labor for the sixth worker?

Accepted Answer

A)  $50
B)  $100
C)  $470
D)  $390E) A) and B)
F) All of the above

Exam 16: The Facts of Production

If the graph shown displays a competitive labor market:

Correct Answer
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In general, economists place all factors of production into which three categories?

Correct Answer
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The supply of labor is determined by the:

Correct Answer
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A profit-seeking firm will choose the combination of inputs that maximizes profit, based on the:

Correct Answer
verified

If a firm adopts a labor-augmenting piece of technology, the:

Correct Answer
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If the current wage is below the market equilibrium level in a competitive labor market:

Correct Answer
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In the capital market, the rental price is what a:

Correct Answer
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The table shown displays the production schedule for a bakery in a competitive market that sells cookies for $2 each. What is the value of the marginal product of labor for the sixth worker?

Correct Answer
verified

In the market for labor, the monopsonist is the sole _ and can push wages _ the competitive wage.

Correct Answer
verified

The set of skills, knowledge, experience, and talent that determine the productivity of workers is called:

Correct Answer
verified

If the demand for hand-sewn leather shoes increases, the demand for leather will likely:

Correct Answer
verified

By comparing the value of marginal product with the cost of each input, a firm can find the _______ quantity of inputs to use.

Correct Answer
verified

Any event that increases the value of the marginal product of labor will:

Correct Answer
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Farming in poor countries is considered to be _ intensive because _.

Correct Answer
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The labor supply curve will be downward sloping if the _ effect outweighs the _ effect.

Correct Answer
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Correct Answer
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The factors of production are the:

Correct Answer
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An increase in the demand for spinach will cause an increase in the price for spinach and will affect the labor market for spinach farm workers. We would expect to see a(n) _ in labor demand, resulting in _ wages.

Correct Answer
verified

If the labor market worked efficiently, then an effective minimum wage law would:

Correct Answer
verified

When the competitive firm's value of the marginal product of labor intersects the market-wage level, the firm:

Correct Answer
verified

Exam 16: The Facts of Production

If the graph shown displays a competitive labor market:

Correct AnswerverifiedShow Answer

In general, economists place all factors of production into which three categories?

Correct AnswerverifiedShow Answer

The supply of labor is determined by the:

Correct AnswerverifiedShow Answer

A profit-seeking firm will choose the combination of inputs that maximizes profit, based on the:

Correct AnswerverifiedShow Answer

If a firm adopts a labor-augmenting piece of technology, the:

Correct AnswerverifiedShow Answer

If the current wage is below the market equilibrium level in a competitive labor market:

Correct AnswerverifiedShow Answer

In the capital market, the rental price is what a:

Correct AnswerverifiedShow Answer

The table shown displays the production schedule for a bakery in a competitive market that sells cookies for $2 each. What is the value of the marginal product of labor for the sixth worker?

Correct AnswerverifiedShow Answer

In the market for labor, the monopsonist is the sole _______ and can push wages _______ the competitive wage.

Correct AnswerverifiedShow Answer

The set of skills, knowledge, experience, and talent that determine the productivity of workers is called:

Correct AnswerverifiedShow Answer

If the demand for hand-sewn leather shoes increases, the demand for leather will likely:

Correct AnswerverifiedShow Answer

By comparing the value of marginal product with the cost of each input, a firm can find the _______ quantity of inputs to use.

Correct AnswerverifiedShow Answer

Any event that increases the value of the marginal product of labor will:

Correct AnswerverifiedShow Answer

Farming in poor countries is considered to be _______ intensive because _______.

Correct AnswerverifiedShow Answer

The labor supply curve will be downward sloping if the _______ effect outweighs the _______ effect.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The factors of production are the:

Correct AnswerverifiedShow Answer

An increase in the demand for spinach will cause an increase in the price for spinach and will affect the labor market for spinach farm workers. We would expect to see a(n) _______ in labor demand, resulting in _______ wages.

Correct AnswerverifiedShow Answer

If the labor market worked efficiently, then an effective minimum wage law would:

Correct AnswerverifiedShow Answer

When the competitive firm's value of the marginal product of labor intersects the market-wage level, the firm:

Correct AnswerverifiedShow Answer

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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In the market for labor, the monopsonist is the sole _ and can push wages _ the competitive wage.

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
verified

Farming in poor countries is considered to be _ intensive because _.

Correct Answer
verified

The labor supply curve will be downward sloping if the _ effect outweighs the _ effect.

Correct Answer
verified

Correct Answer
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Correct Answer
verified

An increase in the demand for spinach will cause an increase in the price for spinach and will affect the labor market for spinach farm workers. We would expect to see a(n) _ in labor demand, resulting in _ wages.

Correct Answer
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Correct Answer
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Correct Answer
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