Question 1

If the value of the marginal product of labor is less than the wage, then the firm could

Accepted Answer

A)   increase profit by hiring additional labor.
B)   increase profit by reducing the amount of labor hired.
C)   increase revenue by lowering output.
D)   reduce total cost by hiring additional workers.E) None of the above
F) All of the above

Question 2

Movements of workers from country to country can cause shifts in the labor supply curves for both countries.

Accepted Answer

A) True 
 B)False

Question 3

The inputs used to produce goods and services are called

Accepted Answer

A)   profit factors.
B)   marginal products.
C)   labor demands.
D)   factors of production.E) None of the above
F) B) and C)

Question 4

Miguel receives a pay raise at his part-time job from $7.50 to $9 per hour. He used to work 10 hours per week, but now he decides to work 12 hours per week. For this price range, his labor supply curve is

Accepted Answer

A)   vertical.
B)   horizontal.
C)   upward sloping.
D)   backward sloping.E) None of the above
F) A) and D)

Question 5

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. Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day. What is the value of the marginal product of labor for the second worker?

Accepted Answer

A)   $300
B)   $650
C)   $9,600
D)   $20,800E) A) and D)
F) All of the above

Question 6

The labor supply curve reflects how

Accepted Answer

A)   workers' decisions about the labor-leisure tradeoff respond to a change in the wage.
B)   workers' decisions about the opportunity cost of labor respond to a change in the quantity of labor supplied.
C)   firms' decisions about the labor-leisure tradeoff respond to the quantity of labor demanded.
D)   firms' decisions about how the quantity of labor they hire respond to changes in their opportunities to earn profits.E) All of the above
F) B) and C)

Question 7

A competitive firm sells its output for $60 per unit. Assume that labor is the only input that varies for the firm. The marginal product of the 10th worker is 20 units of output per day; the marginal product of the 11th worker is 16 units of output per day. The firm pays its workers a wage of $150 per day. For the 11th worker, the value of the marginal product of labor is

Accepted Answer

A)   $480.
B)   $960.
C)   $1,200.
D)   $2,400.E) A) and D)
F) A) and C)

Question 8

Figure 18-2
The figure below shows the production function for a particular firm. 
-Refer to Figure 18-2. The marginal product of the third worker is

Accepted Answer

A)   20 units.
B)   30 units.
C)   40 units.
D)   70 units.E) C) and D)
F) All of the above

Question 9

Among the people who are characterized below, who has the highest opportunity cost of leisure?

Accepted Answer

A)   an attorney who earns $200 per hour and who plays golf during her leisure time
B)   a medical doctor who earns $210 per hour and who sleeps during his leisure time
C)   a retail clerk who earns $15 per hour and who watches TV during her leisure time
D)   a waiter who earns $12 per hour and who reads poetry during his leisure timeE) A) and B)
F) A) and C)

Question 10

Consider the labor market for short-order cooks. An increase in immigration will cause

Accepted Answer

A)   both equilibrium wages and equilibrium employment to increase.
B)   both equilibrium wages and equilibrium employment to decrease.
C)   equilibrium wages to increase and equilibrium employment to decrease.
D)   equilibrium wages to decrease and equilibrium employment to increase.E) B) and D)
F) B) and C)

Question 11

Changes in supply and demand in the labor market will cause changes in wages.

Accepted Answer

A) True 
 B)False

Question 12

If the wage exceeds the value of the marginal product of labor, then hiring another worker

Accepted Answer

A)   decreases the firm's total revenue.
B)   increases the firm's profit.
C)   decreases the firm's total cost.
D)   decreases the firm's profit.E) B) and C)
F) A) and D)

Question 13

Capital owners are compensated according to the value of the marginal product of that capital.

Accepted Answer

A) True 
 B)False

Question 14

The term "factor market" applies to the market for

Accepted Answer

A)   labor.
B)   capital.
C)   land.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 15

Suppose that in November a profit-maximizing firm has 100 employees. By December, the firm has decreased employment. One can infer that, when 100 employees are hired, the

Accepted Answer

A)   firm is losing market share.
B)   firm is minimizing losses.
C)   wage exceeds the value of the marginal product of labor.
D)   value of the marginal product of labor exceeds the wage.E) C) and D)
F) None of the above

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

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

Question 18

Which of the following is correct?

Accepted Answer

A)   Any event that changes the supply or demand for labor must change the value of the marginal product.
B)   A profit-maximizing firm hires workers so long as the wage rate exceeds the value of the marginal product of labor.
C)   An increase in the supply of labor increases both employment and wages.
D)   A decrease in the demand for labor decreases wages but increases employment.E) B) and D)
F) A) and B)

Question 19

Willie's wage increased, and he responded by enjoying more hours of leisure per day. Is Willie's behavior consistent with an upward-sloping labor-supply curve?

Accepted Answer

No. If Willie's labor­supply c...

Question 20

Figure 18-3 
-Refer to Figure 18-3. What is the marginal product of the third worker?

Accepted Answer

A)   2 units
B)   4 units
C)   4.67 units
D)   14 unitsE) All of the above
F) C) and D)

Exam 18: The Markets for the Factors of Production

Willie's wage increased, and he responded by enjoying more hours of leisure per day. Is Willie's behavior consistent with an upward-sloping labor-supply curve?

Correct Answer
verified
No. If Willie's laborsupply c...
View Answer

The inputs used to produce goods and services are called

Correct Answer
verified

Changes in supply and demand in the labor market will cause changes in wages.

Correct Answer
verified

Which of the following is correct?

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

Correct Answer
verified

Miguel receives a pay raise at his part-time job from $7.50 to $9 per hour. He used to work 10 hours per week, but now he decides to work 12 hours per week. For this price range, his labor supply curve is

Correct Answer
verified

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

Correct Answer
verified

If the value of the marginal product of labor is less than the wage, then the firm could

Correct Answer
verified

Movements of workers from country to country can cause shifts in the labor supply curves for both countries.

Correct Answer
verified

Correct Answer
verified

Suppose that in November a profit-maximizing firm has 100 employees. By December, the firm has decreased employment. One can infer that, when 100 employees are hired, the

Correct Answer
verified

Consider the labor market for short-order cooks. An increase in immigration will cause

Correct Answer
verified

Among the people who are characterized below, who has the highest opportunity cost of leisure?

Correct Answer
verified

Figure 18-3 -Refer to Figure 18-3. What is the marginal product of the third worker?

Correct Answer
verified

If the wage exceeds the value of the marginal product of labor, then hiring another worker

Correct Answer
verified

The term "factor market" applies to the market for

Correct Answer
verified

The labor supply curve reflects how

Correct Answer
verified

Correct Answer
verified

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. The marginal product of the third worker is

Correct Answer
verified

Capital owners are compensated according to the value of the marginal product of that capital.

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Willie's wage increased, and he responded by enjoying more hours of leisure per day. Is Willie's behavior consistent with an upward-sloping labor-supply curve?

Correct AnswerverifiedNo. If Willie's labor­supply c...View AnswerShow Answer

The inputs used to produce goods and services are called

Correct AnswerverifiedShow Answer

Changes in supply and demand in the labor market will cause changes in wages.

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Miguel receives a pay raise at his part-time job from $7.50 to $9 per hour. He used to work 10 hours per week, but now he decides to work 12 hours per week. For this price range, his labor supply curve is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the value of the marginal product of labor is less than the wage, then the firm could

Correct AnswerverifiedShow Answer

Movements of workers from country to country can cause shifts in the labor supply curves for both countries.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that in November a profit-maximizing firm has 100 employees. By December, the firm has decreased employment. One can infer that, when 100 employees are hired, the

Correct AnswerverifiedShow Answer

Consider the labor market for short-order cooks. An increase in immigration will cause

Correct AnswerverifiedShow Answer

Among the people who are characterized below, who has the highest opportunity cost of leisure?

Correct AnswerverifiedShow Answer

Figure 18-3 -Refer to Figure 18-3. What is the marginal product of the third worker?

Correct AnswerverifiedShow Answer

If the wage exceeds the value of the marginal product of labor, then hiring another worker

Correct AnswerverifiedShow Answer

The term "factor market" applies to the market for

Correct AnswerverifiedShow Answer

The labor supply curve reflects how

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. The marginal product of the third worker is

Correct AnswerverifiedShow Answer

Capital owners are compensated according to the value of the marginal product of that capital.

Correct AnswerverifiedShow Answer

Correct Answer
verified
No. If Willie's laborsupply c...
View Answer

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