Question 1

There will be an increase in factor demand because of a(n)_____ in the price of the _____.

Accepted Answer

A) increase;factor 
B) increase;good the factor produces 
C) decrease;factor 
D) decrease;good the factor produces 
A) increase;factor 
B) increase;good the factor produces 
C) decrease;factor 
D) decrease;good the factor produces

Question 2

Which statement is TRUE?

Accepted Answer

A) The value of the marginal product of labor equals the marginal product of labor times price. 
B) The value of the marginal product of labor equals a one-unit change in a factor divided by the change in total revenue. 
C) Marginal cost equals change in total revenue divided by the one-unit change in a factor. 
D) The value of the marginal product of labor equals the change in the quantity of a factor times the price of the factor. 
A) The value of the marginal product of labor equals the marginal product of labor times price. 
B) The value of the marginal product of labor equals a one-unit change in a factor divided by the change in total revenue. 
C) Marginal cost equals change in total revenue divided by the one-unit change in a factor. 
D) The value of the marginal product of labor equals the change in the quantity of a factor times the price of the factor.

Question 3

The demand for factors of production is called a derived demand because it is:

Accepted Answer

A) derived from the demand for the outputs that are produced by the factors of production. 
B) derived from the available supply of factors,such as land,that can be overexploited. 
C) not easy to determine and must be derived by a technical (and often complicated)process. 
D) derived on the basis of questions posed to residents during the census. 
A) derived from the demand for the outputs that are produced by the factors of production. 
B) derived from the available supply of factors,such as land,that can be overexploited. 
C) not easy to determine and must be derived by a technical (and often complicated)process. 
D) derived on the basis of questions posed to residents during the census.

Question 4

Use the following to answer question:
Figure: The Demand for Bricklayers  
-(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If the equilibrium market wage for bricklayers falls from $110 to $100,the _____ bricklayers will _____.

Accepted Answer

A) demand for;rise 
B) quantity demanded of;rise 
C) demand for;fall 
D) quantity demanded of;fall 
A) demand for;rise 
B) quantity demanded of;rise 
C) demand for;fall 
D) quantity demanded of;fall

Question 5

According to the efficiency wage model,efficiency wages do NOT:

Accepted Answer

A) reduce unemployment. 
B) represent a response to a type of market failure. 
C) get set above the equilibrium wage. 
D) reduce worker turnover. 
A) reduce unemployment. 
B) represent a response to a type of market failure. 
C) get set above the equilibrium wage. 
D) reduce worker turnover.

Question 6

The amount by which an additional unit of a factor increases a firm's total _____ during a period is the _____.

Accepted Answer

A) revenue;value of the marginal product 
B) revenue;marginal factor cost 
C) cost;value of marginal product 
D) cost;marginal product 
A) revenue;value of the marginal product 
B) revenue;marginal factor cost 
C) cost;value of marginal product 
D) cost;marginal product

Question 7

Labor with a particular skill level and training is used in only two industries: grape cultivation and cranberry cultivation.Which occurrence is likely to cause an INCREASE in the demand for this type of labor?

Accepted Answer

A) improved technology that leads to more efficient machines for grape picking 
B) publication of a report asserting that drinking two glasses of grape or cranberry juice every day improves digestion and heart health 
C) a report by the USDA that an increasing proportion of grapes are contaminated with unacceptable pesticides 
D) a decrease in the acreage of cranberry bogs 
A) improved technology that leads to more efficient machines for grape picking 
B) publication of a report asserting that drinking two glasses of grape or cranberry juice every day improves digestion and heart health 
C) a report by the USDA that an increasing proportion of grapes are contaminated with unacceptable pesticides 
D) a decrease in the acreage of cranberry bogs

Question 8

A change in the wage rate will shift the supply curve in the market for labor.

Accepted Answer

A) True 
 B)False

Question 9

When each factor is paid an amount equal to the value of the marginal product of the last unit of that factor employed in the factor market as a whole,this is:

Accepted Answer

A) the marginal productivity theory of income distribution. 
B) diminishing marginal product. 
C) the factor distribution of income. 
D) the efficiency wage model. 
A) the marginal productivity theory of income distribution. 
B) diminishing marginal product. 
C) the factor distribution of income. 
D) the efficiency wage model.

Question 10

The individual producer's labor demand curve is the:

Accepted Answer

A) marginal product of labor curve. 
B) value of the average product of labor curve. 
C) average product curve. 
D) value of the marginal product of labor curve. 
A) marginal product of labor curve. 
B) value of the average product of labor curve. 
C) average product curve. 
D) value of the marginal product of labor curve.

Question 11

An increase in the demand for autoworkers would NOT come about because of a(n):

Accepted Answer

A) increase in the price of cars. 
B) decrease in the market wage rate. 
C) increase in the productivity of autoworkers. 
D) increase in the supply of other factors that autoworkers use in production. 
A) increase in the price of cars. 
B) decrease in the market wage rate. 
C) increase in the productivity of autoworkers. 
D) increase in the supply of other factors that autoworkers use in production.

Question 12

One reason that wage discrimination based on gender or ethnicity can continue is:

Accepted Answer

A) market interference or market failure associated with above-equilibrium wages. 
B) market competition making it profitable to engage in discrimination. 
C) it is justified by the marginal productivity theory of income distribution. 
D) because,as the South African experience with apartheid showed,discrimination leads to more rapid economic growth. 
A) market interference or market failure associated with above-equilibrium wages. 
B) market competition making it profitable to engage in discrimination. 
C) it is justified by the marginal productivity theory of income distribution. 
D) because,as the South African experience with apartheid showed,discrimination leads to more rapid economic growth.

Question 13

Use the following to answer question:  
-(Table: Value of the Marginal Product of Labor and Demand)Use Table: Value of the Marginal Product of Labor and Demand.In the table,the total product of labor is shown for the hourly production of power cords.Assume that the market for power cords is perfectly competitive.If the price of a power cord is $2 and the market wage rate is $20 per hour,the profit-maximizing quantity of labor is _____ workers.

Accepted Answer

A) 2 
B) 4 
C) 6 
D) 8 
A) 2 
B) 4 
C) 6 
D) 8

Question 14

A shift in demand for a given factor of production will NOT occur if:

Accepted Answer

A) the price of that factor falls. 
B) the productivity of that factor increases. 
C) the productivity of that factor decreases. 
D) there is a decrease in the price of a substitute factor. 
A) the price of that factor falls. 
B) the productivity of that factor increases. 
C) the productivity of that factor decreases. 
D) there is a decrease in the price of a substitute factor.

Question 15

Liyun owns a small flower shop,and the industry is perfectly competitive.She is considering whether to hire an additional worker.The wage rate for the worker is $500 per week;the marginal product of the additional worker would be 100 units per week;and the price of the units is $10 each.Liyun should:

Accepted Answer

A) hire the additional worker. 
B) not hire the additional worker. 
C) raise the price of the flower arrangements that she sells. 
D) Not enough information is given to answer the question. 
A) hire the additional worker. 
B) not hire the additional worker. 
C) raise the price of the flower arrangements that she sells. 
D) Not enough information is given to answer the question.

Question 16

In terms of contribution to total U.S.income,the factor of production that receives the SMALLEST share is:

Accepted Answer

A) capital. 
B) labor. 
C) land. 
D) entrepreneurship. 
A) capital. 
B) labor. 
C) land. 
D) entrepreneurship.

Question 17

According to the marginal productivity theory of income distribution,in a competitive economy each factor of production is paid its equilibrium value of the marginal product.

Accepted Answer

A) True 
 B)False

Question 18

Median earnings in the U.S.labor market are highest for White men,followed by African-Americans,followed by women (regardless of ethnicity),and then Hispanics.

Accepted Answer

A) True 
 B)False

Question 19

(Scenario: The Decision to Hire Labor)Use Scenario: The Decision to Hire Labor.How many workers will this perfectly competitive,profit-maximizing firm choose to hire if the equilibrium wage is $30? Scenario: The Decision to Hire Labor
Assume that both the product market and the labor market are perfectly competitive.The price of this firm's product is $5.The firm's total product with respect to labor is given in the table that follows.

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 20

In markets for goods and services,households demand goods and services and firms supply goods and services.

Accepted Answer

A) True 
 B)False

There will be an increase in factor demand because of a(n)_ in the price of the _.

Which statement is TRUE?

The demand for factors of production is called a derived demand because it is:

Use the following to answer question: Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If the equilibrium market wage for bricklayers falls from $110 to $100,the _ bricklayers will _.

According to the efficiency wage model,efficiency wages do NOT:

The amount by which an additional unit of a factor increases a firm's total _ during a period is the _.

Labor with a particular skill level and training is used in only two industries: grape cultivation and cranberry cultivation.Which occurrence is likely to cause an INCREASE in the demand for this type of labor?

A change in the wage rate will shift the supply curve in the market for labor.

When each factor is paid an amount equal to the value of the marginal product of the last unit of that factor employed in the factor market as a whole,this is:

The individual producer's labor demand curve is the:

An increase in the demand for autoworkers would NOT come about because of a(n):

One reason that wage discrimination based on gender or ethnicity can continue is:

A shift in demand for a given factor of production will NOT occur if:

In terms of contribution to total U.S.income,the factor of production that receives the SMALLEST share is:

According to the marginal productivity theory of income distribution,in a competitive economy each factor of production is paid its equilibrium value of the marginal product.

Median earnings in the U.S.labor market are highest for White men,followed by African-Americans,followed by women (regardless of ethnicity),and then Hispanics.

In markets for goods and services,households demand goods and services and firms supply goods and services.

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

Exam 19: Factor Markets and the Distribution of Income

There will be an increase in factor demand because of a(n)_____ in the price of the _____.

Which statement is TRUE?

The demand for factors of production is called a derived demand because it is:

Use the following to answer question: Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If the equilibrium market wage for bricklayers falls from $110 to $100,the _____ bricklayers will _____.

According to the efficiency wage model,efficiency wages do NOT:

The amount by which an additional unit of a factor increases a firm's total _____ during a period is the _____.

Labor with a particular skill level and training is used in only two industries: grape cultivation and cranberry cultivation.Which occurrence is likely to cause an INCREASE in the demand for this type of labor?

A change in the wage rate will shift the supply curve in the market for labor.

When each factor is paid an amount equal to the value of the marginal product of the last unit of that factor employed in the factor market as a whole,this is:

The individual producer's labor demand curve is the:

An increase in the demand for autoworkers would NOT come about because of a(n):

One reason that wage discrimination based on gender or ethnicity can continue is:

A shift in demand for a given factor of production will NOT occur if:

In terms of contribution to total U.S.income,the factor of production that receives the SMALLEST share is:

According to the marginal productivity theory of income distribution,in a competitive economy each factor of production is paid its equilibrium value of the marginal product.

Median earnings in the U.S.labor market are highest for White men,followed by African-Americans,followed by women (regardless of ethnicity),and then Hispanics.

In markets for goods and services,households demand goods and services and firms supply goods and services.

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

There will be an increase in factor demand because of a(n)_ in the price of the _.

Use the following to answer question: Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If the equilibrium market wage for bricklayers falls from $110 to $100,the _ bricklayers will _.

The amount by which an additional unit of a factor increases a firm's total _ during a period is the _.