Question 1

Increases in the minimum wage

Accepted Answer

A) have more support among economists than among the general public 
B) raise the opportunity cost of staying in school 
C) raise the opportunity cost of working 
D) have no effect on the actual wages workers receive 
E) raise overall employment in the economy 
A) have more support among economists than among the general public 
B) raise the opportunity cost of staying in school 
C) raise the opportunity cost of working 
D) have no effect on the actual wages workers receive 
E) raise overall employment in the economy B

Question 2

If all of the returns to a resource are in the form of economic rent,

Accepted Answer

A) the price of that resource is determined exclusively by supply 
B) the price of that resource is determined exclusively by demand 
C) the price and quantity of that resource are determined exclusively by supply 
D) the price and quantity of that resource are determined exclusively by demand 
E) the equilibrium price is zero 
A) the price of that resource is determined exclusively by supply 
B) the price of that resource is determined exclusively by demand 
C) the price and quantity of that resource are determined exclusively by supply 
D) the price and quantity of that resource are determined exclusively by demand 
E) the equilibrium price is zero B

Question 3

A resource price taker's resource demand curve is

Accepted Answer

A) horizontal 
B) the same as its marginal resource cost curve 
C) the same as its marginal revenue product curve 
D) the same as its marginal product curve 
E) the same as its average variable cost curve 
A) horizontal 
B) the same as its marginal resource cost curve 
C) the same as its marginal revenue product curve 
D) the same as its marginal product curve 
E) the same as its average variable cost curve C

Question 4

Exhibit 11-10   In Exhibit 11-10, the marginal revenue product of the fourth unit of the variable resource is

Accepted Answer

A) $14 
B) $24 
C) $168 
D) $84 
E) $756 
A) $14 
B) $24 
C) $168 
D) $84 
E) $756

Question 5

Exhibit 11-2   In Exhibit 11-2, the twentieth unit of the resource is earning a wage of

Accepted Answer

A) $4, all of which is economic rent 
B) $4, none of which is economic rent 
C) $8, all of which is economic rent 
D) $8, none of which is economic rent 
E) $8, half of which is economic rent 
A) $4, all of which is economic rent 
B) $4, none of which is economic rent 
C) $8, all of which is economic rent 
D) $8, none of which is economic rent 
E) $8, half of which is economic rent

Question 6

A game show host who gave up his job as a teacher brags about his salary, saying "the rest is pure gravy." Here, "the rest" refers to

Accepted Answer

A) opportunity cost 
B) implicit cost 
C) explicit cost 
D) the height of his labor supply curve 
E) economic rent 
A) opportunity cost 
B) implicit cost 
C) explicit cost 
D) the height of his labor supply curve 
E) economic rent

Question 7

If the demand for tacos increases,

Accepted Answer

A) the supply of corn increases 
B) the supply of corn decreases 
C) the demand for corn increases 
D) the demand for corn decreases 
E) the price of corn falls 
A) the supply of corn increases 
B) the supply of corn decreases 
C) the demand for corn increases 
D) the demand for corn decreases 
E) the price of corn falls

Question 8

The difference in land prices between Washington,

Accepted Answer

A) True 
 B)False

Question 9

Marginal revenue product is measured in dollars per unit of output.

Accepted Answer

A) True 
 B)False

Question 10

Marginal revenue product of labor equals marginal product times the wage only when the firm is a perfect competitor in the product market.

Accepted Answer

A) True 
 B)False

Question 11

A firm's marginal revenue product curve is downward sloping, which means the derived demand curve for an input is downward sloping.

Accepted Answer

A) True 
 B)False

Question 12

If all of the income paid to a resource is opportunity costs,

Accepted Answer

A) the price and quantity of that resource are determined exclusively by supply 
B) the price and quantity of that resource are determined exclusively by demand 
C) the quantity of that resource is determined exclusively by supply 
D) the price of that resource is determined exclusively by demand 
E) the quantity of that resource is determined exclusively by demand 
A) the price and quantity of that resource are determined exclusively by supply 
B) the price and quantity of that resource are determined exclusively by demand 
C) the quantity of that resource is determined exclusively by supply 
D) the price of that resource is determined exclusively by demand 
E) the quantity of that resource is determined exclusively by demand

Question 13

An increase in the price of a resource will cause a movement along the demand curve for that resource.

Accepted Answer

A) True 
 B)False

Question 14

The dean of your college is considering hiring another economics professor.If the additional revenue that the college can earn from employing the professor exceeds the additional cost, the college should

Accepted Answer

A) do nothing 
B) continue to study the issue 
C) hire the professor 
D) stop offering economics classes 
E) not hire the professor and lay off a professor already on the faculty 
A) do nothing 
B) continue to study the issue 
C) hire the professor 
D) stop offering economics classes 
E) not hire the professor and lay off a professor already on the faculty

Question 15

The non-wage job features that an employer could alter in response to a higher minimum wage include

Accepted Answer

A) the supply of labor 
B) the quantity of labor supplied 
C) on-the-job training and vacation days 
D) barriers to entry 
E) Social Security taxes 
A) the supply of labor 
B) the quantity of labor supplied 
C) on-the-job training and vacation days 
D) barriers to entry 
E) Social Security taxes

Question 16

A change in demand for a resource can be caused by

Accepted Answer

A) proportion of economic rent in the total earnings of the resource 
B) opportunity cost of the resource 
C) price of the resource 
D) a change in the number of firms producing the final product 
E) ease with which resources can be put to alternative uses 
A) proportion of economic rent in the total earnings of the resource 
B) opportunity cost of the resource 
C) price of the resource 
D) a change in the number of firms producing the final product 
E) ease with which resources can be put to alternative uses

Question 17

Suppose a firm is a price searcher in the product market and hires labor in a perfectly competitive labor market.If the wage rate is $20, the marginal product of the last worker hired is 5, and the firm is hiring the profit-maximizing amount of labor, then the marginal revenue from the last unit of output must be

Accepted Answer

A) $1 
B) $1.50 
C) $4 
D) $5 
E) $20 
A) $1 
B) $1.50 
C) $4 
D) $5 
E) $20

Question 18

Exhibit 11-6   In Exhibit 11-6, economic rent in equilibrium is represented by area

Accepted Answer

A) abe 
B) befc 
C) gfeh 
D) cdf 
E) bed 
A) abe 
B) befc 
C) gfeh 
D) cdf 
E) bed

Question 19

Which of the following resources will a producer demand another unit of so long as the additional unit's marginal revenue exceeds its marginal cost?

Accepted Answer

A) labor 
B) capital 
C) natural resources 
D) entrepreneurial ability 
E) All of the answers are correct. 
A) labor 
B) capital 
C) natural resources 
D) entrepreneurial ability 
E) All of the answers are correct.

Question 20

A profit-maximizing firm will hire an additional unit of a resource as long as the

Accepted Answer

A) marginal product of the resource is greater than the marginal resource cost 
B) marginal product of the resource is less than the marginal resource cost 
C) marginal revenue product of the resource is greater than the marginal resource cost 
D) marginal revenue product of the resource is less than the marginal resource cost 
E) price of the resource is less than the marginal resource cost 
A) marginal product of the resource is greater than the marginal resource cost 
B) marginal product of the resource is less than the marginal resource cost 
C) marginal revenue product of the resource is greater than the marginal resource cost 
D) marginal revenue product of the resource is less than the marginal resource cost 
E) price of the resource is less than the marginal resource cost

Exam 11: Resource Markets

Increases in the minimum wage

If all of the returns to a resource are in the form of economic rent,

A resource price taker's resource demand curve is

Exhibit 11-10 In Exhibit 11-10, the marginal revenue product of the fourth unit of the variable resource is

Exhibit 11-2 In Exhibit 11-2, the twentieth unit of the resource is earning a wage of

A game show host who gave up his job as a teacher brags about his salary, saying "the rest is pure gravy." Here, "the rest" refers to

If the demand for tacos increases,

The difference in land prices between Washington,

Marginal revenue product is measured in dollars per unit of output.

Marginal revenue product of labor equals marginal product times the wage only when the firm is a perfect competitor in the product market.

A firm's marginal revenue product curve is downward sloping, which means the derived demand curve for an input is downward sloping.

If all of the income paid to a resource is opportunity costs,

An increase in the price of a resource will cause a movement along the demand curve for that resource.

The dean of your college is considering hiring another economics professor.If the additional revenue that the college can earn from employing the professor exceeds the additional cost, the college should

The non-wage job features that an employer could alter in response to a higher minimum wage include

A change in demand for a resource can be caused by

Exhibit 11-6 In Exhibit 11-6, economic rent in equilibrium is represented by area

Which of the following resources will a producer demand another unit of so long as the additional unit's marginal revenue exceeds its marginal cost?

A profit-maximizing firm will hire an additional unit of a resource as long as the

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

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