Question 1

When a new major league baseball stadium is built in the suburbs of a large city,the rents of apartments surrounding the stadium skyrocket because:

Accepted Answer

A) the supply of the apartments is high. 
B) the amount of land available for apartments is fixed. 
C) stadium owners want the area to be upscale. 
D) everyone wants to live near a stadium. 
E) the players want to live nearby and can afford high rents. 
A) the supply of the apartments is high. 
B) the amount of land available for apartments is fixed. 
C) stadium owners want the area to be upscale. 
D) everyone wants to live near a stadium. 
E) the players want to live nearby and can afford high rents. B

Question 2

At all wages below __________,there will be __________.

Accepted Answer

A) $10; a surplus 
B) $25; a shortage 
C) $40; a surplus 
D) $35; no labor supplied 
E) $20; no labor demanded 
A) $10; a surplus 
B) $25; a shortage 
C) $40; a surplus 
D) $35; no labor supplied 
E) $20; no labor demanded B

Question 3

Outsourcing is when:

Accepted Answer

A) consumers buy products made in another country. 
B) foreign consumers buy products made in the United States. 
C) U.S.firms relocate their production to overseas facilities. 
D) the costs of operating are higher in another country. 
E) the domestic labor supply shrinks. 
A) consumers buy products made in another country. 
B) foreign consumers buy products made in the United States. 
C) U.S.firms relocate their production to overseas facilities. 
D) the costs of operating are higher in another country. 
E) the domestic labor supply shrinks. C

Question 4

If the wage is set temporarily at $15,it will need to __________ to restore equilibrium.

Accepted Answer

A) decrease to zero 
B) increase to $35 
C) fall 
D) increase 
E) remain unchanged 
A) decrease to zero 
B) increase to $35 
C) fall 
D) increase 
E) remain unchanged

Question 5

Derived demand is:

Accepted Answer

A) consumer demand for goods and services. 
B) based on the prices of factors of production. 
C) the demand for factors of production directly by business. 
D) the demand for factors of production dependent on consumer demand for output. 
E) calculated for firms. 
A) consumer demand for goods and services. 
B) based on the prices of factors of production. 
C) the demand for factors of production directly by business. 
D) the demand for factors of production dependent on consumer demand for output. 
E) calculated for firms.

Question 6

The fundamental decision faced by workers is called:

Accepted Answer

A) labor demand. 
B) labor supply. 
C) income effect. 
D) the labor-leisure trade-off. 
E) the substitution effect. 
A) labor demand. 
B) labor supply. 
C) income effect. 
D) the labor-leisure trade-off. 
E) the substitution effect.

Question 7

The use of farm machinery to plant and harvest crops has increased because it is more productive than the typical farmhand.Demand for farmhands has:

Accepted Answer

A) remained steady. 
B) shifted to other areas of the farm. 
C) decreased. 
D) fallen to zero. 
E) increased. 
A) remained steady. 
B) shifted to other areas of the farm. 
C) decreased. 
D) fallen to zero. 
E) increased.

Question 8

In the short run,wages in the home country will __________ when a company outsources its operations because labor demand in the home country has __________.

Accepted Answer

A) rise; risen 
B) stay the same; fallen 
C) double; risen 
D) fall by a third; risen 
E) fall; fallen 
A) rise; risen 
B) stay the same; fallen 
C) double; risen 
D) fall by a third; risen 
E) fall; fallen

Question 9

The accompanying graph represents Zendar's labor market.Use this graph to answer the questions that follow.
  
-To have no surplus or shortage of workers in Zendar,what does the wage rate have to be?

Accepted Answer

A) $5 
B) $10 
C) $15 
D) $20 
E) $25 
A) $5 
B) $10 
C) $15 
D) $20 
E) $25

Question 10

Which of the following is NOT a factor of production?

Accepted Answer

A) land 
B) output 
C) inputs 
D) entrepreneurship 
E) capital 
A) land 
B) output 
C) inputs 
D) entrepreneurship 
E) capital

Question 11

The backward-bending labor supply curve has its shape because,at:

Accepted Answer

A) low wages,the income effect dominates the substitution effect,but the reverse occurs at high wages. 
B) high wages,the substitution effect dominates the income effect,but the reverse occurs at low wages. 
C) low wages,the substitution effect dominates the income effect,but the reverse occurs at high wages. 
D) all wages,the income effect dominates the substitution effect. 
E) all wages,the substitution effect dominates the income effect. 
A) low wages,the income effect dominates the substitution effect,but the reverse occurs at high wages. 
B) high wages,the substitution effect dominates the income effect,but the reverse occurs at low wages. 
C) low wages,the substitution effect dominates the income effect,but the reverse occurs at high wages. 
D) all wages,the income effect dominates the substitution effect. 
E) all wages,the substitution effect dominates the income effect.

Question 12

You know that the rental price of capital is $3,000,the rental price of land is $2,000,and the wage of labor is $100.The value of the marginal product produced by each factor is $30,000,$4,000,and $200,respectively.You would advise the company to hire more:

Accepted Answer

A) labor. 
B) land. 
C) capital. 
D) labor and land. 
E) capital and labor. 
A) labor. 
B) land. 
C) capital. 
D) labor and land. 
E) capital and labor.

Question 13

Mary decides that worker turnover is too high at her firm.She hopes that,by paying above-market wages,workers will stay longer.This may create:

Accepted Answer

A) a surplus of workers. 
B) a surplus of jobs. 
C) a shortage of workers. 
D) a shortage of overtime. 
E) no disequilibrium. 
A) a surplus of workers. 
B) a surplus of jobs. 
C) a shortage of workers. 
D) a shortage of overtime. 
E) no disequilibrium.

Question 14

Which position is most easily outsourced?

Accepted Answer

A) a customer service representative at your local cable company 
B) a hair stylist 
C) a local town chocolatier 
D) a general practitioner doctor 
E) an economics professor 
A) a customer service representative at your local cable company 
B) a hair stylist 
C) a local town chocolatier 
D) a general practitioner doctor 
E) an economics professor

Question 15

With a large group of citizens leaving a country,what will happen to the equilibrium wage and quantity of workers employed?

Accepted Answer

A) Both will fall. 
B) Both will rise. 
C) The equilibrium number of workers will rise and the wage will fall. 
D) The equilibrium number of workers will fall and the wage will fall. 
E) The equilibrium number of workers will fall and the wage will rise. 
A) Both will fall. 
B) Both will rise. 
C) The equilibrium number of workers will rise and the wage will fall. 
D) The equilibrium number of workers will fall and the wage will fall. 
E) The equilibrium number of workers will fall and the wage will rise.

Question 16

The labor market is said to be in equilibrium when:

Accepted Answer

A) everyone who wants to work is supplying his or her labor. 
B) the number of workers is equal to the number of jobs available at a specific wage. 
C) firms are unwilling to hire more workers. 
D) workers keep their hours constant. 
E) the number of available workers is increasing. 
A) everyone who wants to work is supplying his or her labor. 
B) the number of workers is equal to the number of jobs available at a specific wage. 
C) firms are unwilling to hire more workers. 
D) workers keep their hours constant. 
E) the number of available workers is increasing.

Question 17

At a wage of __________,there is a __________ of __________ workers.

Accepted Answer

A) $10; surplus; 30 
B) $40; shortage; 30 
C) $10; shortage; 30 
D) $35; shortage; 20 
E) $25; surplus; 10 
A) $10; surplus; 30 
B) $40; shortage; 30 
C) $10; shortage; 30 
D) $35; shortage; 20 
E) $25; surplus; 10

Question 18

When the opportunity cost of leisure is high,people tend to work __________ hours.When it is low,people tend to work __________ hours.

Accepted Answer

A) the same; fewer 
B) more; fewer 
C) fewer; more 
D) more; the same 
E) fewer; the same 
A) the same; fewer 
B) more; fewer 
C) fewer; more 
D) more; the same 
E) fewer; the same

Question 19

Use the following information to answer the questions that follow.
Nicky L,owner of NLD Incorporated,knows that the marginal product of labor (MPL)for his workers can be defined as follows:
MPL = 32 - L
The total output a given level of workers can produce is found as:
Q = 32L - LS1U1P12S1S1P0
He also knows that the price of his output is $3.His profits can be found as:
Profit = P
   Q - W
   L
-The government raises the minimum wage.Which graph reflects this situation?

Accepted Answer

A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D 
E) Graph E 
A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D 
E) Graph E

Question 20

Use the accompanying table,which shows the supply and demand schedules for workings in the country of Hovian,to answer the questions that follow.
  
-The equilibrium wage is __________

Accepted Answer

A) $10. 
B) $20. 
C) $30. 
D) $40. 
E) $50. 
A) $10. 
B) $20. 
C) $30. 
D) $40. 
E) $50.

When a new major league baseball stadium is built in the suburbs of a large city,the rents of apartments surrounding the stadium skyrocket because:

At all wages below ,there will be .

Outsourcing is when:

If the wage is set temporarily at $15,it will need to __________ to restore equilibrium.

Derived demand is:

The fundamental decision faced by workers is called:

The use of farm machinery to plant and harvest crops has increased because it is more productive than the typical farmhand.Demand for farmhands has:

In the short run,wages in the home country will when a company outsources its operations because labor demand in the home country has .

The accompanying graph represents Zendar's labor market.Use this graph to answer the questions that follow. -To have no surplus or shortage of workers in Zendar,what does the wage rate have to be?

Which of the following is NOT a factor of production?

The backward-bending labor supply curve has its shape because,at:

You know that the rental price of capital is $3,000,the rental price of land is $2,000,and the wage of labor is $100.The value of the marginal product produced by each factor is $30,000,$4,000,and $200,respectively.You would advise the company to hire more:

Mary decides that worker turnover is too high at her firm.She hopes that,by paying above-market wages,workers will stay longer.This may create:

Which position is most easily outsourced?

With a large group of citizens leaving a country,what will happen to the equilibrium wage and quantity of workers employed?

The labor market is said to be in equilibrium when:

At a wage of ,there is a of __ workers.

When the opportunity cost of leisure is high,people tend to work hours.When it is low,people tend to work hours.

Use the accompanying table,which shows the supply and demand schedules for workings in the country of Hovian,to answer the questions that follow. -The equilibrium wage is __________

The Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Price Controls

The Efficiency of Markets and the Costs of Taxation

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Filters

Exam 14: The Demand and Supply of Resources

When a new major league baseball stadium is built in the suburbs of a large city,the rents of apartments surrounding the stadium skyrocket because:

At all wages below __________,there will be __________.

Outsourcing is when:

If the wage is set temporarily at $15,it will need to __________ to restore equilibrium.

Derived demand is:

The fundamental decision faced by workers is called:

The use of farm machinery to plant and harvest crops has increased because it is more productive than the typical farmhand.Demand for farmhands has:

In the short run,wages in the home country will __________ when a company outsources its operations because labor demand in the home country has __________.

The accompanying graph represents Zendar's labor market.Use this graph to answer the questions that follow. -To have no surplus or shortage of workers in Zendar,what does the wage rate have to be?

Which of the following is NOT a factor of production?

The backward-bending labor supply curve has its shape because,at:

You know that the rental price of capital is $3,000,the rental price of land is $2,000,and the wage of labor is $100.The value of the marginal product produced by each factor is $30,000,$4,000,and $200,respectively.You would advise the company to hire more:

Mary decides that worker turnover is too high at her firm.She hopes that,by paying above-market wages,workers will stay longer.This may create:

Which position is most easily outsourced?

With a large group of citizens leaving a country,what will happen to the equilibrium wage and quantity of workers employed?

The labor market is said to be in equilibrium when:

At a wage of __________,there is a __________ of __________ workers.

When the opportunity cost of leisure is high,people tend to work __________ hours.When it is low,people tend to work __________ hours.

Use the accompanying table,which shows the supply and demand schedules for workings in the country of Hovian,to answer the questions that follow. -The equilibrium wage is __________

The Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Price Controls

The Efficiency of Markets and the Costs of Taxation

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Filters

At all wages below ,there will be .

In the short run,wages in the home country will when a company outsources its operations because labor demand in the home country has .

At a wage of ,there is a of __ workers.

When the opportunity cost of leisure is high,people tend to work hours.When it is low,people tend to work hours.