Question 1

A monopsonist firm pays a price to a factor that is:

Accepted Answer

A)  equal to the marginal revenue product of the factor.
B)  greater than the marginal revenue product of the factor.
C)  equal to the marginal factor cost.
D)  greater than the marginal factor cost.
E)  less than the marginal revenue product of the factor.

Question 2

Goods which are demanded to produce something else are said to have a(n) :

Accepted Answer

A)  direct demand.
B)  composite demand.
C)  derived demand.
D)  joint demand.
E)  inelastic demand.

Question 3

The buyers and sellers in a resource market are:

Accepted Answer

A)  household and firms respectively.
B)  banks and farmers respectively.
C)  households and land owners respectively.
D)  firms and household respectively.
E)  exporters and importers respectively.

Question 4

If a resource is purchased and sold in a perfectly competitive market:

Accepted Answer

A)  there are a large number of resource suppliers and the resources are identical.
B)  there is a single buyer of resource and the resources are identical.
C)  there is a single buyer of resource and the resources are differentiated.
D)  there is a large number of resource suppliers and the resources are differentiated.
E)  there are a large number of resource suppliers and there is no entry or exit.

Question 5

Burger King has a direct demand for the cheese which it uses in its burgers.

Accepted Answer

A) True 
 B)False

Question 6

The following table shows the total output produced by different units of a resource.Assume that the resource and output markets are both perfectly competitive.The equilibrium price of the resource is $15.00, and the equilibrium price of the product is $0.50. Table 14.2
 Marginal revenue product (MRP) of a resource is the product of the marginal product of the resource and the marginal revenue.
Refer to Table 14.2.What is the marginal-revenue product of the third unit of the resource?

Accepted Answer

A)  $6.50
B)  $13.00
C)  $17.50
D)  $70.00
E)  $20.00

Question 7

If a resource can be put to a single use and has no alternative uses then:

Accepted Answer

A)  economic rents are zero.
B)  transfer earnings are maximized.
C)  total earnings are zero.
D)  all earnings are economic rents.
E)  all earnings are transfer earnings.

Question 8

The following table shows the marginal productivity of different units of labor for producing a product. Table 14.4
 In the table,
MR: Marginal Revenue
MPP: Marginal Physical Product
In Table 14.4, if marginal revenue product is equal to the product of MPP and MR, what wage rate would be consistent with a profit-maximizing firm hiring six laborers?

Accepted Answer

A)  $6
B)  $10
C)  $12
D)  $18
E)  $24

Question 9

Consider a perfectly competitive firm that produces computers.Each additional worker at this firm can produce four computers.Calculate the marginal factor cost if the computers are sold for $1, 000 each, and the firm is maximizing profit.(Assume that marginal revenue product is the product of marginal product of the input and the marginal revenue of the firm. )

Accepted Answer

A)  $4, 000.
B)  $500
C)  $1, 000
D)  $1, 500
E)  $400

Question 10

The following table shows total output produced by different units of capital. Table 14.3
 The marginal revenue product of a resource is the product of the marginal product of the resource and the marginal revenue.
In Table 14.3, how many units of capital will the firm hire if the price per unit of capital is $60?

Accepted Answer

A)  1 unit of capital.
B)  2 units of capital.
C)  3 units of capital.
D)  4 units of capital.
E)  5 units of capital.

Question 11

The following table shows the total output produced by different units of a resource.Assume that the resource and output markets are both perfectly competitive.The equilibrium price of the resource is $15.00, and the equilibrium price of the product is $0.50. Table 14.2
 Marginal revenue product (MRP) of a resource is the product of the marginal product of the resource and the marginal revenue.
Refer to Table 14.2.How many units of the resource will a profit-maximizing firm hire?

Accepted Answer

A)  Two labor hours
B)  Between two and three labor hours
C)  Between three and four labor hours
D)  More than four labor hours
E)  Three labor hours

Question 12

The figure given below represents equilibrium in the labor market. Figure 14.5  In the figure,
VMP: Value of marginal product curve
MRP: Marginal revenue product curve
MFC: Marginal factor cost
S: Supply curve of labor
In Figure 14.5, the firm is:

Accepted Answer

A)  a monopsonist in the labor market and a perfect competitor in the output market.
B)  a monopsonist in the labor market and a monopolist in the output market.
C)  a perfect competitor in all markets.
D)  a perfect competitor in the labor market and a monopolist in the output market.
E)  either a monopolist or a monopsonist, but not both.

Question 13

The following table shows the marginal productivity of different units of labor for producing a product. Table 14.4
 In the table,
MR: Marginal Revenue
MPP: Marginal Physical Product
According to Table 14.4, how many laborers should be hired if the wage rate is $18? (Marginal revenue product = MPP ´ MR)

Accepted Answer

A)  2
B)  3
C)  4
D)  5
E)  6

Question 14

If there is imperfect competition in the product market, the marginal revenue product of a factor will be greater than the value of its marginal product.

Accepted Answer

A) True 
 B)False

Question 15

If an individual thinks about how he purchase goods and services, he will realize that he allocates his expenditures so that the pleasure he gets out of spending one more dollar is the same no matter what he spends that dollar on.For a firm purchasing resources, this is the same as ensuring that:

Accepted Answer

A)  the ratio between marginal revenue product and the marginal factor cost is equal for all the resources used.
B)  the marginal revenue product of the resources are equal.
C)  the marginal factor cost of the resources are equal.
D)  the ratio between marginal revenue product and the marginal factor cost is greater than one for all resources.
E)  the marginal revenue product is greater than the marginal factor cost of all resources.

Question 16

A general study of resource markets shows that the roles of firms and households are:

Accepted Answer

A)  reversed from what they are in the product markets.
B)  the same as what they are in the product markets.
C)  different from what they are in the product markets because households are residual claimants.
D)  different from what they are in the product markets because firms are residual claimants.
E)  different from what they are in the product markets because the laws of demand and supply do not work for the resource markets.

Question 17

A monopolist hiring labor in a perfectly competitive resource market is faced with a:

Accepted Answer

A)  perfectly elastic demand curve for labor.
B)  horizontal marginal factor cost curve.
C)  perfectly inelastic demand curve for labor.
D)  perfectly inelastic supply curve of labor.
E)  positively sloped marginal factor cost curve.

Question 18

The demand curve for labor indicates that:

Accepted Answer

A)  as the real wage rate increases, employers will hire more workers.
B)  as the nominal wage rate increases, employers will hire more workers.
C)  as the nominal wage rate decreases, the real wage rate increases.
D)  as the real wage rate increases, employers will hire fewer workers.
E)  the real wage rate does not affect firms' hiring decisions.

Question 19

The following table shows output per hour produced by the different units of labor. Table 14.1
 The marginal revenue product of a resource is equal to the product of the marginal product of an input and marginal revenue.
According to Table 14.1, the marginal-revenue product of the:

Accepted Answer

A)  fourth worker is $8.
B)  fifth worker is $3.
C)  first worker is $3.
D)  third worker is $5.
E)  second worker is $12.

Question 20

The resource market is the same as the product market except that, in the resource market:

Accepted Answer

A)  the demand curve slopes upward.
B)  the households are the sellers and the firms are the buyers.
C)  there is no substitution effect.
D)  the supply curve is perfectly inelastic.
E)  there is no income effect.

Exam 24: Resource Markets

Correct Answer
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Correct Answer
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The figure given below represents equilibrium in the labor market. Figure 14.5 In the figure, VMP: Value of marginal product curve MRP: Marginal revenue product curve MFC: Marginal factor cost S: Supply curve of labor In Figure 14.5, the firm is:

Correct Answer
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The following table shows output per hour produced by the different units of labor. Table 14.1 The marginal revenue product of a resource is equal to the product of the marginal product of an input and marginal revenue. According to Table 14.1, the marginal-revenue product of the:

Correct Answer
verified

The resource market is the same as the product market except that, in the resource market:

Correct Answer
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If a resource can be put to a single use and has no alternative uses then:

Correct Answer
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A general study of resource markets shows that the roles of firms and households are:

Correct Answer
verified

Correct Answer
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The buyers and sellers in a resource market are:

Correct Answer
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Goods which are demanded to produce something else are said to have a(n) :

Correct Answer
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A monopsonist firm pays a price to a factor that is:

Correct Answer
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The demand curve for labor indicates that:

Correct Answer
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If an individual thinks about how he purchase goods and services, he will realize that he allocates his expenditures so that the pleasure he gets out of spending one more dollar is the same no matter what he spends that dollar on.For a firm purchasing resources, this is the same as ensuring that:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Burger King has a direct demand for the cheese which it uses in its burgers.

Correct Answer
verified

If a resource is purchased and sold in a perfectly competitive market:

Correct Answer
verified

A monopolist hiring labor in a perfectly competitive resource market is faced with a:

Correct Answer
verified

If there is imperfect competition in the product market, the marginal revenue product of a factor will be greater than the value of its marginal product.

Correct Answer
verified

Correct Answer
verified

Exam 24: Resource Markets

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The figure given below represents equilibrium in the labor market. Figure 14.5 In the figure, VMP: Value of marginal product curve MRP: Marginal revenue product curve MFC: Marginal factor cost S: Supply curve of labor In Figure 14.5, the firm is:

Correct AnswerverifiedShow Answer

The following table shows output per hour produced by the different units of labor. Table 14.1 The marginal revenue product of a resource is equal to the product of the marginal product of an input and marginal revenue. According to Table 14.1, the marginal-revenue product of the:

Correct AnswerverifiedShow Answer

The resource market is the same as the product market except that, in the resource market:

Correct AnswerverifiedShow Answer

If a resource can be put to a single use and has no alternative uses then:

Correct AnswerverifiedShow Answer

A general study of resource markets shows that the roles of firms and households are:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The buyers and sellers in a resource market are:

Correct AnswerverifiedShow Answer

Goods which are demanded to produce something else are said to have a(n) :

Correct AnswerverifiedShow Answer

A monopsonist firm pays a price to a factor that is:

Correct AnswerverifiedShow Answer

The demand curve for labor indicates that:

Correct AnswerverifiedShow Answer

If an individual thinks about how he purchase goods and services, he will realize that he allocates his expenditures so that the pleasure he gets out of spending one more dollar is the same no matter what he spends that dollar on.For a firm purchasing resources, this is the same as ensuring that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Burger King has a direct demand for the cheese which it uses in its burgers.

Correct AnswerverifiedShow Answer

If a resource is purchased and sold in a perfectly competitive market:

Correct AnswerverifiedShow Answer

A monopolist hiring labor in a perfectly competitive resource market is faced with a:

Correct AnswerverifiedShow Answer

If there is imperfect competition in the product market, the marginal revenue product of a factor will be greater than the value of its marginal product.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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