Question 1

The "least-cost combination of resources" to produce a given amount of output means that the output is produced at the lowest

Accepted Answer

A)   ATC for that output.
B)   MC for that output.
C)   P of that output.
D)   TR of that output.E) B) and C)
F) A) and D)

Question 2

Which of the following will not shift the demand curve for labor?

Accepted Answer

A)   the use of a larger stock of capital with the labor force
B)   a change in the wage rate
C)   an increase in the price of the product that labor is helping to produce
D)   the adoption of a more efficient method of combining labor and capital in the production processE) A) and D)
F) All of the above

Question 3

Suppose a technological improvement increases the productivity of a firm's capital and, simultaneously, its workers' union negotiates a wage increase. We can predict that

Accepted Answer

A)   the firm will use relatively more capital and relatively less labor.
B)   the firm will use relatively more labor and relatively less capital.
C)   inputs of capital and labor will be unchanged.
D)   the firm's equilibrium output will necessarily increase.E) All of the above
F) A) and C)

Question 4

If labor costs are 60 percent of production costs, then a 15 percent increase in wage rates would increase production costs by

Accepted Answer

A)   60 percent.
B)   45 percent.
C)   15 percent.
D)   9 percent.E) A) and B)
F) None of the above D

Question 5

Other things being equal, how would the market for tablet computers be affected by a large increase in productivity in the tablet-computer industry?

Accepted Answer

A)   a decrease in price and a leftward movement along the supply curve
B)   a decrease in price and a rightward movement along the demand curve
C)   a decrease in price and a rightward movement along the supply curve
D)   an increase in price and a rightward movement along the demand curveE) A) and C)
F) None of the above

Question 6

In which of the cases given below will the elasticity of demand for workers who produce yo-yos be most inelastic? The price elasticity of demand for yo-yos is

Accepted Answer

A)   5, and labor's share of total costs is 20 percent.
B)   5, and labor's share of total costs is 75 percent.
C)   .1, and labor's share of total costs is 20 percent.
D)   .1, and labor's share of total costs is 75 percent.E) A) and D)
F) A) and C)

Question 7

A firm is hiring resources X, Y, and Z in the profit-maximizing amounts when

Accepted Answer

A)     MRP x/Px equals MRPy/Py equals MRPz/Pz equals 1. 	ext { MRP }_{x} / P_{x} 	ext { equals } \mathrm{MR} \mathrm{P}_{y} / P_{y} 	ext { equals } \mathrm{MRP}_{z} / P_{z} 	ext { equals } 1 	ext {. } MRP x​/Px​ equals MRPy​/Py​ equals MRPz​/Pz​ equals 1.  
B)   the sum of the MRPs of the three resources is at a minimum.
C)   the marginal revenue productivity of all three resources is the same.
D)   the marginal revenue product of the last dollar spent on each of the three resources is the same. E) A) and B)
F) B) and D)

Question 8

Which type of occupation is expected by the U.S. Bureau of Labor Statistics to be the fastest growing from 2014 to 2024 ?

Accepted Answer

A)   manufacturing
B)   service
C)   construction
D)   miningE) A) and B)
F) B) and C) B

Question 9

A major criticism of the marginal productivity theory of income distribution is that

Accepted Answer

A)   the demand for labor resources is price inelastic.
B)   achieving equality in incomes will take time.
C)   imperfectly competitive firms are only interested in profit maximization.
D)   property resources like land are unevenly distributed, which leads to income inequality.E) C) and D)
F) B) and D)

Question 10

A profit-maximizing firm employs resources to the point where

Accepted Answer

A)   MRC = MP.
B)   resource price equals product price.
C)   MRP = MRC.
D)   MP = product price.E) A) and B)
F) B) and D)

Question 11

Two resource inputs, capital and labor, are complementary and used in fixed proportions. An increase in the price of capital will

Accepted Answer

A)   increase the demand for labor.
B)   decrease the demand for labor.
C)   decrease the quantity demanded for labor.
D)   have no effect, because the relationship is fixed.E) A) and B)
F) A) and C)

Question 12

The marginal revenue product of labor is measured in dollars per unit of labor.

Accepted Answer

A) True 
 B)False

Question 13

If the price of a resource is greater than its marginal revenue product, the firm should

Accepted Answer

A)   charge a higher price for its product.
B)   make no change in the units of the resource used.
C)   increase the units of the resource used in order to increase profits.
D)   decrease the units of the resource used in order to increase profits.E) C) and D)
F) None of the above

Question 14

A profit-maximizing firm will use additional units of resources for production until

Accepted Answer

A)   total, average, and marginal cost are equal.
B)   total, average, and marginal revenue are equal.
C)   the marginal revenue product equals the marginal resource cost.
D)   the marginal revenue product is greater than the marginal resource cost.E) A) and B)
F) A) and C)

Question 15

As the baby boomers in America grow old, the demand for health care workers increases. This would be an example of which determinant of labor demand?

Accepted Answer

A)   an increase in labor productivity
B)   an increase in product demand
C)   a decrease in the price of another resource
D)   an increase in the price of another resourceE) A) and B)
F) None of the above

Question 16

The labor demand curve of a firm

Accepted Answer

A)   will shift to the left if the price of the product that the labor is producing falls.
B)   is perfectly elastic if the firm is selling its product in a purely competitive market.
C)   reflects a direct relationship between the number of workers hired and the money wage rate.
D)   is the same as its marginal product curve.E) B) and D)
F) A) and B) A

Question 17

If MRP of labor < wage rate, a firm should hire more workers.

Accepted Answer

A) True 
 B)False

Question 18

A purely competitive firm in the factor and product markets sells its output for $1 and pays factors PL = $4 and PC = $3. What is the profit-maximizing combination of L and C for the firm?
  Q.  MPL  QC  MPC 128118224215320312416495956646372728181.590.591\begin{array} { | c | c | c | c | } \hline 	ext { Q. } & 	ext { MPL } & 	ext { QC } & 	ext { MPC } \\hline 1 & 28 & 1 & 18 \\hline 2 & 24 & 2 & 15 \\hline 3 & 20 & 3 & 12 \\hline 4 & 16 & 4 & 9 \\hline 5 & 9 & 5 & 6 \\hline 6 & 4 & 6 & 3 \\hline 7 & 2 & 7 & 2 \\hline 8 & 1 & 8 & 1.5 \\hline 9 & 0.5 & 9 & 1 \\hline\end{array} Q. 123456789​ MPL 2824201694210.5​ QC 123456789​ MPC 18151296321.51​​

Accepted Answer

A)   8 of L and 8 of C
B)   4 of L and 3 of C
C)   5 of L and 2 of C
D)   6 of L and 6 of C E) B) and D)
F) All of the above

Question 19

Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 80 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is

Accepted Answer

A)   $6.
B)   $8.
C)   $48.
D)   $80.E) B) and D)
F) A) and C)

Question 20

A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired. The farmer's product sells for $3 per unit, and the wage rate is $13 per worker. The marginal product of the second worker is

Accepted Answer

A)   24.
B)   8.
C)   5.
D)   1E) A) and B)
F) A) and C)

Exam 16: The Demand for Resources

The "least-cost combination of resources" to produce a given amount of output means that the output is produced at the lowest

Correct Answer
verified

Which of the following will not shift the demand curve for labor?

Correct Answer
verified

Suppose a technological improvement increases the productivity of a firm's capital and, simultaneously, its workers' union negotiates a wage increase. We can predict that

Correct Answer
verified

If labor costs are 60 percent of production costs, then a 15 percent increase in wage rates would increase production costs by

Correct Answer
verified
D

Other things being equal, how would the market for tablet computers be affected by a large increase in productivity in the tablet-computer industry?

Correct Answer
verified

In which of the cases given below will the elasticity of demand for workers who produce yo-yos be most inelastic? The price elasticity of demand for yo-yos is

Correct Answer
verified

A firm is hiring resources X, Y, and Z in the profit-maximizing amounts when

Correct Answer
verified

Which type of occupation is expected by the U.S. Bureau of Labor Statistics to be the fastest growing from 2014 to 2024 ?

Correct Answer
verified
B

A major criticism of the marginal productivity theory of income distribution is that

Correct Answer
verified

A profit-maximizing firm employs resources to the point where

Correct Answer
verified

Two resource inputs, capital and labor, are complementary and used in fixed proportions. An increase in the price of capital will

Correct Answer
verified

The marginal revenue product of labor is measured in dollars per unit of labor.

Correct Answer
verified

If the price of a resource is greater than its marginal revenue product, the firm should

Correct Answer
verified

A profit-maximizing firm will use additional units of resources for production until

Correct Answer
verified

As the baby boomers in America grow old, the demand for health care workers increases. This would be an example of which determinant of labor demand?

Correct Answer
verified

The labor demand curve of a firm

Correct Answer
verified
A

If MRP of labor < wage rate, a firm should hire more workers.

Correct Answer
verified

Correct Answer
verified

Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 80 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is

Correct Answer
verified

Correct Answer
verified

Exam 16: The Demand for Resources

The "least-cost combination of resources" to produce a given amount of output means that the output is produced at the lowest

Correct AnswerverifiedShow Answer

Which of the following will not shift the demand curve for labor?

Correct AnswerverifiedShow Answer

Suppose a technological improvement increases the productivity of a firm's capital and, simultaneously, its workers' union negotiates a wage increase. We can predict that

Correct AnswerverifiedShow Answer

If labor costs are 60 percent of production costs, then a 15 percent increase in wage rates would increase production costs by

Correct AnswerverifiedD

Other things being equal, how would the market for tablet computers be affected by a large increase in productivity in the tablet-computer industry?

Correct AnswerverifiedShow Answer

In which of the cases given below will the elasticity of demand for workers who produce yo-yos be most inelastic? The price elasticity of demand for yo-yos is

Correct AnswerverifiedShow Answer

A firm is hiring resources X, Y, and Z in the profit-maximizing amounts when

Correct AnswerverifiedShow Answer

Which type of occupation is expected by the U.S. Bureau of Labor Statistics to be the fastest growing from 2014 to 2024 ?

Correct AnswerverifiedB

A major criticism of the marginal productivity theory of income distribution is that

Correct AnswerverifiedShow Answer

A profit-maximizing firm employs resources to the point where

Correct AnswerverifiedShow Answer

Two resource inputs, capital and labor, are complementary and used in fixed proportions. An increase in the price of capital will

Correct AnswerverifiedShow Answer

The marginal revenue product of labor is measured in dollars per unit of labor.

Correct AnswerverifiedShow Answer

If the price of a resource is greater than its marginal revenue product, the firm should

Correct AnswerverifiedShow Answer

A profit-maximizing firm will use additional units of resources for production until

Correct AnswerverifiedShow Answer

As the baby boomers in America grow old, the demand for health care workers increases. This would be an example of which determinant of labor demand?

Correct AnswerverifiedShow Answer

The labor demand curve of a firm

Correct AnswerverifiedA

If MRP of labor < wage rate, a firm should hire more workers.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 80 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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D

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B

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A

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