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Exam 18: The Markets for the Factors of Production

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Question 171

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Consider the labor market for short-order cooks. A labor-augmenting technological change such as a faster food processor will cause

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.

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Question 172

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Suppose that a rare virus infects and kills a significant percentage of the population. Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and the rents earned by landowners?

A) Both wages and rents would increase.
B) Both wages and rents would decrease.
C) Wages would increase, and rents would decrease.
D) Wages would decrease, and rents would increase.

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Question 173

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Table 18-5 -Refer to Table 18-5. The price of output is

Suppose that the market for labor is initially in equilibrium. Suppose that workers' tastes change so that they choose to retire at age 55 rather than age 67. Then the equilibrium wage

Which of the following is correct?

Consider the labor market for computer programmers. During the late 1990s, the value of the marginal product of all computer programmers increased dramatically. Holding all else equal, the equilibrium quantity in the labor market for computer programmers

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

If the wages of a CPA decrease, (i) her opportunity cost of leisure increases. (ii) her opportunity cost of leisure decreases. (iii) her hours of labor supply may increase. (iv) her hours of labor supply may decrease.

For profit-maximizing, competitive firms, the demand curve for each factor of production equals the value of the marginal product of that factor.

Harold owns a cranberry bog in which he grows cranberries. Harold's farm is a competitive, profit-maximizing firm. As such, Harold much decide (i) how many cranberries to sell. (ii) what price to charge for his cranberries. (iii) what wages to pay his workers. (iv) how many workers to hire.

For a profit-maximizing, competitive firm, the value of the marginal product of labor

Scenario 18-5 Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada. -Refer to Scenario 18-5. In the labor market in southern Canada, the equilibrium wage

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-B. What is the third worker's marginal product of labor?

Table 18-7 -Refer to Table 18-7. What is the value of the cell labeled GG?

Figure 18-1 On the graph, L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1. Suppose the firm sells its output for $12 per unit, and it pays each of its workers $700 per week. How many workers will the firm hire to maximize its profit?

Table 18-12 The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. -Refer to Table 18-12. Suppose the firm sells each box of envelopes that it produces for $6. What is the value of the marginal product of the second worker?

The marginal product of labor is the

Suppose that the labor market for life guards is initially in equilibrium. Then a new television series debuts which glamorizes the social opportunities for life guards. What happens to the equilibrium wage and quantity of life guards?

If the value of the marginal product of labor exceeds the wage, then hiring another worker increases the firm's

Table 18-7 -Refer to Table 18-7. What is the value of the cell labeled II?