Question 1

If one worker can pick $30 worth of grapes and two workers together can pick $50 worth of grapes, the

Accepted Answer

A)   marginal revenue product of each worker is $25.
B)   marginal revenue product of the first worker is $20.
C)   marginal revenue product of the second worker is $20.
D)   data given do not permit the determination of the marginal revenue product of either worker.E) None of the above
F) A) and D)

Question 2

Marginal resource cost is

Accepted Answer

A)   the increase in total resource cost associated with the production of one more unit of output.
B)   the increase in total resource cost associated with the hire of one more unit of the resource.
C)   total resource cost divided by the number of inputs employed.
D)   the change in total revenue associated with the employment of one more unit of the resource.E) None of the above
F) B) and C)

Question 3

Which of the following statements is true? Other things equal, the demand for labor will be less elastic the

Accepted Answer

A)   easier it is to substitute capital for labor.
B)   greater the elasticity of resource supply.
C)   greater the elasticity of product demand.
D)   smaller the ratio of labor costs to total costs.E) A) and B)
F) A) and C)

Question 4

The less the elasticity of product demand, the greater the elasticity of resource demand.

Accepted Answer

A) True 
 B)False

Question 5

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. What is the farmer's profit-maximizing output?

Accepted Answer

A)   20
B)   32
C)   37
D)   40E) None of the above
F) A) and C)

Question 6

The marginal revenue product of a resource depends on the following factors, except

Accepted Answer

A)   the price of the resource.
B)   the price of the product.
C)   the quantity of the resource employed.
D)   the marginal product of the resource.E) A) and D)
F) A) and C)

Question 7

Which of the following increases in labor demand is due to a change in the product demand?

Accepted Answer

A)   Access to computers increases the productivity of mail order businesses, thus increasing the demand for their workers.
B)   Tourism increases in popularity, increasing the demand for workers at tourist resorts.
C)   A decrease in the price of trucks decreases the cost of transporting goods, thus increasing the demand for truckers.
D)   A change in work rules increases output per worker in the auto industry, thus increasing the demand for autoworkers.E) A) and B)
F) A) and C)

Question 8

Assume that a restaurant is hiring labor in an amount such that the MRC of the last worker is $16 and her MRP is $12. On the basis of this information, we can say that

Accepted Answer

A)   profits will be increased by hiring additional workers.
B)   profits will be increased by hiring fewer workers.
C)   marginal revenue product must exceed average revenue product.
D)   the restaurant is maximizing profits.E) A) and B)
F) B) and C)

Question 9

A competitive employer will hire inputs up to the point where the

Accepted Answer

A)   marginal product of the input reaches a maximum.
B)   price of the input equals the price of the output.
C)   price of the input equals the marginal product of the input.
D)   price of the input equals the marginal revenue product of the input.E) C) and D)
F) A) and D)

Question 10

The marginal product of labor and the marginal revenue product of labor are both measured in the same units, that is, units of output.

Accepted Answer

A) True 
 B)False

Question 11

Other things being the same, if the demand for labor is inelastic,

Accepted Answer

A)   decreases in wage rates will result in greater payrolls.
B)   increases in wage rates will result in greater payrolls.
C)   increases in wage rates will result in smaller payrolls.
D)   decreases in wage rates will increase both employment and worker incomes.E) C) and D)
F) None of the above

Question 12

If technology dictates that labor and capital must be used in fixed proportions, an increase in the price of capital will cause a firm to use

Accepted Answer

A)   more labor as a consequence of the substitution effect.
B)   more labor as a consequence of the output effect.
C)   less labor as a consequence of the substitution effect.
D)   less labor as a consequence of the output effect.E) A) and D)
F) B) and D)

Question 13

A profit-maximizing firm will employ labor up to the point where the

Accepted Answer

A)   MRP of labor = MRC of labor.
B)   MP of labor = MRC of labor.
C)   MC = MRP.
D)   MP = MC.E) C) and D)
F) B) and D)

Question 14

From 2014 to 2024, the U.S. Bureau of Labor Statistics expects that there will be a fall in demand for

Accepted Answer

A)   manufactured building and mobile home installers.
B)   physical therapists.
C)   commercial drivers.
D)   occupational therapy assistants.E) A) and B)
F) C) and D)

Question 15

Which of the following statements is most accurate about the occupations projected to be the most rapidly declining in the U.S. in terms of percentage decreases?

Accepted Answer

A)   The majority are in education related professions.
B)   The majority are in health care related professions.
C)   The majority are in manufacturing related professions.
D)   The majority are in unskilled jobs.E) A) and D)
F) All of the above

Question 16

When economists say that the demand for labor is a derived demand, they mean that it is

Accepted Answer

A)   dependent on government expenditures for public goods and services.
B)   related to the demand for the product or service labor is producing.
C)   based on the desire of businesses to exploit labor by paying below equilibrium wage rates.
D)   based on the assumption that workers are trying to maximize their money incomes.E) None of the above
F) B) and D)

Question 17

A firm is observed using 15 units of input X when the price of X is $2. If the price of X increases to $4, the firm uses only 6 units of it. What is the price elasticity of demand for input X? (Use the simple formula for percentage change: [(new# − old#) /old#] × 100%.)

Accepted Answer

A)   1/2 = 0.5
B)   3/5 = 0.6
C)   5/3 = 1.67
D)   2E) B) and C)
F) None of the above

Question 18

The MRP curve for labor

Accepted Answer

A)   is downsloping and shows the relationship between wage rates and the quantity of labor demanded.
B)   is perfectly elastic if the firm is selling its output competitively.
C)   is upsloping and lies above the labor supply curve.
D)   will shift location when the wage rate changes.E) B) and C)
F) A) and D)

Question 19

Other things being equal, a labor union will find it harder to obtain a wage increase for its members the

Accepted Answer

A)   less elastic is the demand for the product labor produces.
B)   easier it is to substitute other resources for labor.
C)   greater the amount of unionization in the industry.
D)   less elastic is the demand for labor.E) A) and B)
F) None of the above

Question 20

The marginal revenue product of labor and the marginal resource cost of labor are both measured in the same units, that is, in dollars per unit of labor.

Accepted Answer

A) True 
 B)False

Exam 16: The Demand for Resources

Which of the following increases in labor demand is due to a change in the product demand?

Correct Answer
verified

When economists say that the demand for labor is a derived demand, they mean that it is

Correct Answer
verified

Other things being equal, a labor union will find it harder to obtain a wage increase for its members the

Correct Answer
verified

The MRP curve for labor

Correct Answer
verified

From 2014 to 2024, the U.S. Bureau of Labor Statistics expects that there will be a fall in demand for

Correct Answer
verified

The less the elasticity of product demand, the greater the elasticity of resource demand.

Correct Answer
verified

Which of the following statements is true? Other things equal, the demand for labor will be less elastic the

Correct Answer
verified

If technology dictates that labor and capital must be used in fixed proportions, an increase in the price of capital will cause a firm to use

Correct Answer
verified

A firm is observed using 15 units of input X when the price of X is $2. If the price of X increases to $4, the firm uses only 6 units of it. What is the price elasticity of demand for input X? (Use the simple formula for percentage change: [(new# − old#) /old#] × 100%.)

Correct Answer
verified

If one worker can pick $30 worth of grapes and two workers together can pick $50 worth of grapes, the

Correct Answer
verified

Other things being the same, if the demand for labor is inelastic,

Correct Answer
verified

A competitive employer will hire inputs up to the point where the

Correct Answer
verified

Marginal resource cost is

Correct Answer
verified

The marginal revenue product of labor and the marginal resource cost of labor are both measured in the same units, that is, in dollars per unit of labor.

Correct Answer
verified

Which of the following statements is most accurate about the occupations projected to be the most rapidly declining in the U.S. in terms of percentage decreases?

Correct Answer
verified

Assume that a restaurant is hiring labor in an amount such that the MRC of the last worker is $16 and her MRP is $12. On the basis of this information, we can say that

Correct Answer
verified

The marginal product of labor and the marginal revenue product of labor are both measured in the same units, that is, units of output.

Correct Answer
verified

The marginal revenue product of a resource depends on the following factors, except

Correct Answer
verified

Correct Answer
verified

A profit-maximizing firm will employ labor up to the point where the

Correct Answer
verified

Exam 16: The Demand for Resources

Which of the following increases in labor demand is due to a change in the product demand?

Correct AnswerverifiedShow Answer

When economists say that the demand for labor is a derived demand, they mean that it is

Correct AnswerverifiedShow Answer

Other things being equal, a labor union will find it harder to obtain a wage increase for its members the

Correct AnswerverifiedShow Answer

The MRP curve for labor

Correct AnswerverifiedShow Answer

From 2014 to 2024, the U.S. Bureau of Labor Statistics expects that there will be a fall in demand for

Correct AnswerverifiedShow Answer

The less the elasticity of product demand, the greater the elasticity of resource demand.

Correct AnswerverifiedShow Answer

Which of the following statements is true? Other things equal, the demand for labor will be less elastic the

Correct AnswerverifiedShow Answer

If technology dictates that labor and capital must be used in fixed proportions, an increase in the price of capital will cause a firm to use

Correct AnswerverifiedShow Answer

A firm is observed using 15 units of input X when the price of X is $2. If the price of X increases to $4, the firm uses only 6 units of it. What is the price elasticity of demand for input X? (Use the simple formula for percentage change: [(new# − old#) /old#] × 100%.)

Correct AnswerverifiedShow Answer

If one worker can pick $30 worth of grapes and two workers together can pick $50 worth of grapes, the

Correct AnswerverifiedShow Answer

Other things being the same, if the demand for labor is inelastic,

Correct AnswerverifiedShow Answer

A competitive employer will hire inputs up to the point where the

Correct AnswerverifiedShow Answer

Marginal resource cost is

Correct AnswerverifiedShow Answer

The marginal revenue product of labor and the marginal resource cost of labor are both measured in the same units, that is, in dollars per unit of labor.

Correct AnswerverifiedShow Answer

Which of the following statements is most accurate about the occupations projected to be the most rapidly declining in the U.S. in terms of percentage decreases?

Correct AnswerverifiedShow Answer

Assume that a restaurant is hiring labor in an amount such that the MRC of the last worker is $16 and her MRP is $12. On the basis of this information, we can say that

Correct AnswerverifiedShow Answer

The marginal product of labor and the marginal revenue product of labor are both measured in the same units, that is, units of output.

Correct AnswerverifiedShow Answer

The marginal revenue product of a resource depends on the following factors, except

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A profit-maximizing firm will employ labor up to the point where the

Correct AnswerverifiedShow Answer

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