Question 1

Resource X has many close substitutes, whereas resource Y has no close substitutes. Other things equal, we would expect

Accepted Answer

A)  the demand for resource Y to be more elastic than the demand for resource X.
B)  resources X and Y to be close substitutes.
C)  resource X to be more expensive than resource Y.
D)  the demand for resource X to be more elastic than the demand for resource Y.

Question 2

The more elastic the demand for a product, the less elastic will be the demand for the resources employed in producing it.

Accepted Answer

A) True 
 B)False

Question 3

Refer to the given table. Which of the following best represents the labor demand schedule for this firm?

Accepted Answer

A)   
B)   
C)   
D)

Question 4

A change in a factor's price will have a greater effect on the quantity of the factor demanded the

Accepted Answer

A)  smaller the change in the factor's price.
B)  smaller the factor's share of total cost of production.
C)  more elastic is the demand for the product the factor helps to make.
D)  more inelastic is the demand for the product the factor helps to make.

Question 5

According to the marginal productivity theory of resource demand, the labor-demand schedule for a producer selling in a purely competitive market is

Accepted Answer

A)  the same as the marginal resource cost schedule.
B)  the same as the marginal productivity schedule.
C)  the same as the marginal revenue product schedule.
D)  independent of the value of the product being produced.

Question 6

A decline in the price of resource A will

Accepted Answer

A)  increase the demand for complementary resource B.
B)  shift the demand curve for A to the left.
C)  shift the demand curve for A to the right.
D)  reduce the demand for complementary resource B.

Question 7

A competitive employer is using labor in such an amount that labor's MRP is $10 and its wage rate is $8. This firm

Accepted Answer

A)  should hire more labor because this will increase profits.
B)  should hire more labor, although this may either increase or decrease profits.
C)  is currently hiring the profit-maximizing amount of labor.
D)  is selling its product in an imperfectly competitive market.

Question 8

substitution effect)  B) An increase in the price of a substitute input (if the substitution effect > output effect)  C) An increase in the price of a substitute input (if the output effect > substitution effect)  D) A decrease in the price of a complementary resource" class="answers-bank-image d-inline" rel="preload" > Use the graph to answer the question about the labor resource market faced by producers of good X. What will shift D ₂ to D ₁?

Accepted Answer

A)  A decrease in the price of a substitute input (if the output effect > substitution effect) 
B)  An increase in the price of a substitute input (if the substitution effect > output effect) 
C)  An increase in the price of a substitute input (if the output effect > substitution effect) 
D)  A decrease in the price of a complementary resource

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.

Question 10

The table gives marginal product data for resources a and b. The output of these independent resources sells in a purely competitive market at $1 per unit. Assuming the prices of resources a and b are $5 and $8 respectively, what is the least costly combination of resources for the firm to employ in producing 192 units of output?

Accepted Answer

A)  2 of a and 6 of b
B)  6 of a and 2 of b
C)  4 of a and 3 of b
D)  3 of a and 4 of b

Question 11

In percentage terms, which of the following occupations is expected by the U.S. Bureau of Labor Statistics to be the fastest growing from 2016 to 2026?

Accepted Answer

A)  solar photovoltaic installers
B)  statisticians
C)  nurse practitioners
D)  postal service sorters and processors

Question 12

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.

Question 13

The marginal resource cost of labor for a firm refers to the

Accepted Answer

A)  additional cost of each additional unit of labor employed.
B)  additional cost of producing each extra unit of output.
C)  same concept as the marginal cost of the firm.
D)  same concept as the marginal revenue product of a firm.

Question 14

In the market for superstars,

Accepted Answer

A)  earnings reflect pricing power rather than marginal revenue product.
B)  small differences in talent get magnified into huge differences in pay.
C)  entry and exit rarely occur.
D)  product demand is typically highly elastic.

Question 15

The rising demand for health-care industry workers is due to the following factors, except

Accepted Answer

A)  aging of the U.S. population.
B)  rising income levels in the U.S.
C)  the continued presence of health insurance for U.S. consumers.
D)  decreasing prices of labor in the health-care industry.

Question 16

Increased resource productivity will, ceteris paribus, increase a firm's demand for an input.

Accepted Answer

A) True 
 B)False

Question 17

The change in a firm's total revenue that results from hiring an additional worker is measured by

Accepted Answer

A)  the marginal product.
B)  the marginal revenue.
C)  the marginal revenue product.
D)  the average revenue product.

Question 18

The demand for labor would most likely become less inelastic as a result of

Accepted Answer

A)  a decrease in the elasticity of the demand for the product that the labor produces.
B)  a decrease in the time for employers to make technological changes or purchase new equipment.
C)  a decrease in the proportion of labor costs to total costs.
D)  an increase in the proportion of labor cost to total costs.

Question 19

Marginal revenue product describes the

Accepted Answer

A)  output produced by the last unit of labor employed.
B)  revenue received for the last unit of output produced.
C)  price a consumer paid for the last unit of output produced.
D)  revenue received for the additional output produced by the last unit of labor employed.

Question 20

The general rule for hiring any input (say, labor) in the profit-maximizing amount is MRC = MRP. This rule takes the special form W = MRP (where W is the wage rate) when the

Accepted Answer

A)  labor supply curve is upsloping.
B)  supply of labor is inelastic.
C)  firm is hiring labor under purely competitive conditions.
D)  firm is hiring labor under imperfectly competitive conditions.

Exam 16: The Demand for Resources

A competitive employer is using labor in such an amount that labor's MRP is $10 and its wage rate is $8. This firm

Correct Answer
verified

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

Correct Answer
verified

In the market for superstars,

Correct Answer
verified

The marginal resource cost of labor for a firm refers to the

Correct Answer
verified

The demand for labor would most likely become less inelastic as a result of

Correct Answer
verified

In percentage terms, which of the following occupations is expected by the U.S. Bureau of Labor Statistics to be the fastest growing from 2016 to 2026?

Correct Answer
verified

Marginal revenue product describes the

Correct Answer
verified

The rising demand for health-care industry workers is due to the following factors, except

Correct Answer
verified

The change in a firm's total revenue that results from hiring an additional worker is measured by

Correct Answer
verified

Marginal resource cost is

Correct Answer
verified

The more elastic the demand for a product, the less elastic will be the demand for the resources employed in producing it.

Correct Answer
verified

Use the graph to answer the question about the labor resource market faced by producers of good X. What will shift D ₂ to D ₁?

Correct Answer
verified

According to the marginal productivity theory of resource demand, the labor-demand schedule for a producer selling in a purely competitive market is

Correct Answer
verified

Resource X has many close substitutes, whereas resource Y has no close substitutes. Other things equal, we would expect

Correct Answer
verified

The general rule for hiring any input (say, labor) in the profit-maximizing amount is MRC = MRP. This rule takes the special form W = MRP (where W is the wage rate) when the

Correct Answer
verified

Increased resource productivity will, ceteris paribus, increase a firm's demand for an input.

Correct Answer
verified

A decline in the price of resource A will

Correct Answer
verified

Refer to the given table. Which of the following best represents the labor demand schedule for this firm?

Correct Answer
verified

A change in a factor's price will have a greater effect on the quantity of the factor demanded the

Correct Answer
verified

Correct Answer
verified

Exam 16: The Demand for Resources

A competitive employer is using labor in such an amount that labor's MRP is $10 and its wage rate is $8. This firm

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the market for superstars,

Correct AnswerverifiedShow Answer

The marginal resource cost of labor for a firm refers to the

Correct AnswerverifiedShow Answer

The demand for labor would most likely become less inelastic as a result of

Correct AnswerverifiedShow Answer

In percentage terms, which of the following occupations is expected by the U.S. Bureau of Labor Statistics to be the fastest growing from 2016 to 2026?

Correct AnswerverifiedShow Answer

Marginal revenue product describes the

Correct AnswerverifiedShow Answer

The rising demand for health-care industry workers is due to the following factors, except

Correct AnswerverifiedShow Answer

The change in a firm's total revenue that results from hiring an additional worker is measured by

Correct AnswerverifiedShow Answer

Marginal resource cost is

Correct AnswerverifiedShow Answer

The more elastic the demand for a product, the less elastic will be the demand for the resources employed in producing it.

Correct AnswerverifiedShow Answer

Use the graph to answer the question about the labor resource market faced by producers of good X. What will shift D ₂ to D ₁?

Correct AnswerverifiedShow Answer

According to the marginal productivity theory of resource demand, the labor-demand schedule for a producer selling in a purely competitive market is

Correct AnswerverifiedShow Answer

Resource X has many close substitutes, whereas resource Y has no close substitutes. Other things equal, we would expect

Correct AnswerverifiedShow Answer

The general rule for hiring any input (say, labor) in the profit-maximizing amount is MRC = MRP. This rule takes the special form W = MRP (where W is the wage rate) when the

Correct AnswerverifiedShow Answer

Increased resource productivity will, ceteris paribus, increase a firm's demand for an input.

Correct AnswerverifiedShow Answer

A decline in the price of resource A will

Correct AnswerverifiedShow Answer

Refer to the given table. Which of the following best represents the labor demand schedule for this firm?

Correct AnswerverifiedShow Answer

A change in a factor's price will have a greater effect on the quantity of the factor demanded the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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