Question 1

If producers who hire labor in a competitive labor market decide to purchase the new automated machine that completes the work of 30 employees,in the short run we would expect the:

Accepted Answer

A)   labor-supply curve to shift to the left and wages would rise.
B)   labor-demand curve to shift to the right and wages would increase.
C)   labor-supply curve to shift to the right and wages would rise.
D)   labor-demand curve to shift to the left and wages would decrease.E) B) and C)
F) All of the above

Question 2

The quantity of labor supplied is determined by the:

Accepted Answer

A)   number of firms.
B)   opportunity cost of providing labor.
C)   marginal product of labor.
D)   technology.E) A) and D)
F) B) and C)

Question 3

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

Accepted Answer

A)   also increase.
B)   decrease slightly.
C)   stay the same.
D)   drop significantly and producers will use another material.E) All of the above
F) B) and D)

Question 4

If the graph shown is displaying a competitive market and the market is currently offering a wage more than P*:

Accepted Answer

A)   there would be a shortage of workers who want to work at that wage.
B)   there would be unemployment in the market.
C)   firms would have a hard time finding employees.
D)   other firms would increase demand and shift the equilibrium.E) B) and C)
F) None of the above

Question 5

The labor supply could decrease when wages increase only if the:

Accepted Answer

A)   price effect outweighs the income effect.
B)   income effect outweighs the price effect.
C)   substitution effect outweighs the income effect.
D)   price effect outweighs the substitution effect.E) None of the above
F) B) and C)

Question 6

Workers compete against workers who have:

Accepted Answer

A)   the exact same type of human capital.
B)   similar human capital.
C)   totally different human capital.
D)   all levels of human capital.E) A) and D)
F) A) and C)

Question 7

If it is a cultural norm to practice an afternoon "siesta" (nap) ,it is likely that the labor:

Accepted Answer

A)   demand in that culture would be relatively greater at any wage.
B)   demand in that culture would be relatively lower at any wage.
C)   supply in that culture would be relatively greater at any wage.
D)   supply in that culture would be relatively lower at any wage.E) None of the above
F) B) and D)

Question 8

The factor of production called "land" can be defined as the:

Accepted Answer

A)   earth and anything naturally occurring on or in it used to produce goods and services.
B)   area of the earth exchanged in the real estate market by businesses.
C)   fraction of total costs spent on rent, lease, or mortgage.
D)   earth and any structures on it that are used to produce goods and services.E) All of the above
F) A) and B)

Question 9

A person will choose to work another hour if the benefit of another hour of work is:

Accepted Answer

A)   greater than the opportunity cost.
B)   exactly equal to the opportunity cost.
C)   less than the opportunity cost.
D)   exactly equal to the average total cost to the firm.E) B) and D)
F) None of the above

Question 10

Which of the following has a production process that would be considered capital intensive?

Accepted Answer

A)   A chorale
B)   Police detective work
C)   Auto manufacturing
D)   Serving food at a restaurant.E) A) and B)
F) A) and C)

Question 11

A production function represents the:

Accepted Answer

A)   relative values of the inputs and modes of production.
B)   relative costs of the inputs across various modes of production.
C)   relationship between the quantity of inputs and the quantity of outputs.
D)   relationship between the cost of the inputs and the revenue generated by the outputs.E) All of the above
F) B) and C)

Question 12

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 that point.
C)   should consider shutting down since it is not earning profits.
D)   has found the profit-maximizing quantity of labor to hire.E) None of the above
F) A) and B)

Question 13

If the price effect outweighs the income effect of a wage increase,the quantity of labor supplied will:

Accepted Answer

A)   increase.
B)   decrease.
C)   remain the same.
D)   be negative.E) B) and C)
F) C) and D)

Question 14

Which of the following industries would be considered to have a capital intensive production process?

Accepted Answer

A)   Auto manufacturing
B)   Farming in a poor country
C)   Writing a novel.
D)   Art restoration.E) B) and C)
F) A) and D)

Question 15

A worker deciding how many hours to work can be represented:

Accepted Answer

A)   with an individual labor-supply curve.
B)   in the market labor-supply curve.
C)   with an individual labor-demand curve.
D)   in the market labor-demand curve.E) A) and B)
F) All of the above

Question 16

Which of the following would be considered a "leisure" activity by economists?

Accepted Answer

A)   Mopping the floor at McDonald's for minimum wage
B)   Mopping your kitchen floor
C)   Folding sweaters while working at the Gap
D)   None of these activities would be considered leisure.E) B) and D)
F) A) and B)

Question 17

The demand for factor inputs:

Accepted Answer

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

Question 18

If a firm adopts a labor-saving piece of technology,it will:

Accepted Answer

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

Question 19

In the U.S.,some of the most powerful unions:

Accepted Answer

A)   have organized workers across several markets.
B)   have nearly 100 percent participation of workers.
C)   existed in the 1940s.
D)   All of these statements are true.E) B) and C)
F) None of the above

Question 20

In the graph of supply and demand in the market for labor:

Accepted Answer

A)   individuals make up the demand curve.
B)   the equilibrium price of labor is generally denoted as L*.
C)   firms provide the demand.
D)   equilibrium is rarely achieved.E) A) and C)
F) All of the above

Exam 16: The Factors of Production

If producers who hire labor in a competitive labor market decide to purchase the new automated machine that completes the work of 30 employees,in the short run we would expect the:

Correct AnswerverifiedShow Answer

If the price effect outweighs the income effect of a wage increase,the quantity of labor supplied will:

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The demand for factor inputs:

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The factor of production called "land" can be defined as the:

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Which of the following would be considered a "leisure" activity by economists?

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If a firm adopts a labor-saving piece of technology,it will:

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In the U.S.,some of the most powerful unions:

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If the graph shown is displaying a competitive market and the market is currently offering a wage more than P*:

Correct AnswerverifiedShow Answer

In the graph of supply and demand in the market for labor:

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Which of the following has a production process that would be considered capital intensive?

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If it is a cultural norm to practice an afternoon "siesta" (nap) ,it is likely that the labor:

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The quantity of labor supplied is determined by the:

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Workers compete against workers who have:

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A worker deciding how many hours to work can be represented:

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

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A person will choose to work another hour if the benefit of another hour of work is:

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The labor supply could decrease when wages increase only if the:

Correct AnswerverifiedShow Answer

Which of the following industries would be considered to have a capital intensive production process?

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A production function represents the:

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

Correct AnswerverifiedShow Answer

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