Question 1

For a snow-removal business,the capital stock would include inputs such as snow blowers and shovels.

Accepted Answer

A) True 
 B)False

Question 2

In a competitive market for labor,the equilibrium wage always equals the value of the marginal product.

Accepted Answer

A) True 
 B)False

Question 3

When a firm experiences diminishing marginal product,what is the shape of the curve that represents the value of the marginal product of labor?

Accepted Answer

A)   U-shaped
B)   flat
C)   downward sloping
D)   upward sloping

Question 4

When labor supply increases,

Accepted Answer

A)   the marginal productivity of workers always increases.
B)   profit-maximizing firms reduce employment.
C)   wages increase as long as labor supply is upward sloping.
D)   wages decrease as long as labor demand is downward sloping.

Question 5

The equilibrium rental income paid to the owners of capital at any point in time equals the

Accepted Answer

A)   marginal product of capital.
B)   value of the marginal product of capital.
C)   percentage of profits paid out to stockholders in the form of dividends.
D)   equilibrium purchase price of capital.

Question 6

Labor-saving technological advances decrease the marginal productivity of labor.

Accepted Answer

A) True 
 B)False

Question 7

Firms pay out a portion of their earnings in the form of interest and dividends,and those payments are a portion of the economy's capital income.

Accepted Answer

A) True 
 B)False

Question 8

Figure 18-10
 
-Refer to Figure 18-10.If the relevant labor demand curve is D₂ and the current wage is W₁,

Accepted Answer

A)   there is a surplus of labor.
B)   there is a shortage of labor.
C)   the quantity of labor supplied exceeds the quantity of labor demanded.
D)   workers are failing to take into account the work-leisure tradeoff in deciding what quantity of labor to supply at alternative wages.

Question 9

Consider the market for university economics professors.Suppose the opportunity cost of going to graduate school to get a Ph.D.in economics decreases for many individuals.Suppose it generally takes about five years to get a Ph.D.in economics.Holding all else constant,in five years the equilibrium wage for university economics professors will

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   It is not possible to determine what will happen to the equilibrium wage.

Question 10

Abdul is trying to convince the owner of a sandwich shop to hire him.He argues that he could help the shop sell an additional five sandwiches per day at the market price of $8 each.If the facts are not in dispute,but the owner does not hire him,then

Accepted Answer

A)   the wage rate must be less than $40 per day.
B)   hiring Abdul would involve a negative marginal product.
C)   the wage rate must be more than $40 per day.
D)   the wage rate must be less than $8 per day.

Question 11

A competitive firm sells its output for $30 per unit.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)   $120.
B)   $480.
C)   $600.
D)   $2,400.

Question 12

The factors of production are best defined as the

Accepted Answer

A)   output produced from raw materials.
B)   inputs used to produce goods and services.
C)   wages paid to the workforce.
D)   goods and services sold in the market.

Question 13

Suppose that a competitive firm hires labor up to the point at which the value of the marginal product equals the wage and that labor is the only input that varies for the firm.If the firm pays a wage of $700 per week and the marginal product of labor equals 100 units per week,then the marginal cost of producing an additional unit of output is

Accepted Answer

A)   $7.
B)   $70.
C)   $700.
D)   We do not have enough information to answer this question.

Question 14

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,the equilibrium quantity of health care employees would

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   It is not possible to determine what happens to the equilibrium quantity.

Question 15

Paul is the owner of Paul's Popcorn Palace.Paul is a profit-maximizing owner whose firm operates in a competitive market.An additional worker costs Paul $200 and has a marginal productivity of 40 canisters of popcorn.Assuming no other variable costs,what is the marginal cost of a popcorn?

Accepted Answer

A)   $200
B)   $8
C)   $5
D)   There is insufficient information available to answer this question.

Question 16

Capital,labor,and land

Accepted Answer

A)   have derived demands.
B)   are factors of production.
C)   are inputs used in the production of goods and services.
D)   All of the above are correct.

Question 17

Which of the following is not correct?

Accepted Answer

A)   High-skilled immigration increases GDP growth.
B)   In the United States, about 40 percent of PhD. scientists and engineers are foreign born.
C)   Low-skilled immigration lowers the earnings of native-born workers by 10-20 percent.
D)   Illegal immigrants may pay less in taxes, but they also are eligible for fewer government benefits.

Question 18

When economists refer to a firm's capital,they are describing the

Accepted Answer

A)   markets for final goods and services.
B)   stock of equipment and buildings used in production.
C)   amount of bank financing used by the firm.
D)   amount of financing provided by the equity markets.

Question 19

Consider the market for university economics professors.Suppose the opportunity cost of going to graduate school to get a Ph.D.in economics decreases for many individuals.Suppose it generally takes about five years to get a Ph.D.in economics.Holding all else constant,in five years the equilibrium quantity of university economics professors will

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   It is not possible to determine what will happen to the equilibrium quantity.

Question 20

If a worker respond to an increase in the opportunity cost of leisure by taking less leisure,then his labor supply curve is

Accepted Answer

A)   horizontal.
B)   vertical.
C)   backward sloping.
D)   upward sloping.

Exam 18: The Market For the Factors of Production.

Correct Answer
verified

Paul is the owner of Paul's Popcorn Palace.Paul is a profit-maximizing owner whose firm operates in a competitive market.An additional worker costs Paul $200 and has a marginal productivity of 40 canisters of popcorn.Assuming no other variable costs,what is the marginal cost of a popcorn?

Correct Answer
verified

Capital,labor,and land

Correct Answer
verified

Figure 18-10 -Refer to Figure 18-10.If the relevant labor demand curve is D₂ and the current wage is W₁,

Correct Answer
verified

Correct Answer
verified

In a competitive market for labor,the equilibrium wage always equals the value of the marginal product.

Correct Answer
verified

When labor supply increases,

Correct Answer
verified

The equilibrium rental income paid to the owners of capital at any point in time equals the

Correct Answer
verified

The factors of production are best defined as the

Correct Answer
verified

Firms pay out a portion of their earnings in the form of interest and dividends,and those payments are a portion of the economy's capital income.

Correct Answer
verified

Labor-saving technological advances decrease the marginal productivity of labor.

Correct Answer
verified

If a worker respond to an increase in the opportunity cost of leisure by taking less leisure,then his labor supply curve is

Correct Answer
verified

Abdul is trying to convince the owner of a sandwich shop to hire him.He argues that he could help the shop sell an additional five sandwiches per day at the market price of $8 each.If the facts are not in dispute,but the owner does not hire him,then

Correct Answer
verified

Which of the following is not correct?

Correct Answer
verified

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,the equilibrium quantity of health care employees would

Correct Answer
verified

When a firm experiences diminishing marginal product,what is the shape of the curve that represents the value of the marginal product of labor?

Correct Answer
verified

For a snow-removal business,the capital stock would include inputs such as snow blowers and shovels.

Correct Answer
verified

Correct Answer
verified

When economists refer to a firm's capital,they are describing the

Correct Answer
verified

Correct Answer
verified

Exam 18: The Market For the Factors of Production.

Correct AnswerverifiedShow Answer

Paul is the owner of Paul's Popcorn Palace.Paul is a profit-maximizing owner whose firm operates in a competitive market.An additional worker costs Paul $200 and has a marginal productivity of 40 canisters of popcorn.Assuming no other variable costs,what is the marginal cost of a popcorn?

Correct AnswerverifiedShow Answer

Capital,labor,and land

Correct AnswerverifiedShow Answer

Figure 18-10 -Refer to Figure 18-10.If the relevant labor demand curve is D₂ and the current wage is W₁,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In a competitive market for labor,the equilibrium wage always equals the value of the marginal product.

Correct AnswerverifiedShow Answer

When labor supply increases,

Correct AnswerverifiedShow Answer

The equilibrium rental income paid to the owners of capital at any point in time equals the

Correct AnswerverifiedShow Answer

The factors of production are best defined as the

Correct AnswerverifiedShow Answer

Firms pay out a portion of their earnings in the form of interest and dividends,and those payments are a portion of the economy's capital income.

Correct AnswerverifiedShow Answer

Labor-saving technological advances decrease the marginal productivity of labor.

Correct AnswerverifiedShow Answer

If a worker respond to an increase in the opportunity cost of leisure by taking less leisure,then his labor supply curve is

Correct AnswerverifiedShow Answer

Abdul is trying to convince the owner of a sandwich shop to hire him.He argues that he could help the shop sell an additional five sandwiches per day at the market price of $8 each.If the facts are not in dispute,but the owner does not hire him,then

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,the equilibrium quantity of health care employees would

Correct AnswerverifiedShow Answer

When a firm experiences diminishing marginal product,what is the shape of the curve that represents the value of the marginal product of labor?

Correct AnswerverifiedShow Answer

For a snow-removal business,the capital stock would include inputs such as snow blowers and shovels.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When economists refer to a firm's capital,they are describing the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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