Question 1

When people make more money,they sometimes take more vacation time.Based on this information,we can say that leisure is a(n):

Accepted Answer

A) substitute good. 
B) complement good. 
C) inferior good. 
D) Giffen good. 
E) normal good. 
A) substitute good. 
B) complement good. 
C) inferior good. 
D) Giffen good. 
E) normal good.

Question 2

The substitution effect describes the:

Accepted Answer

A) incentive to work more when the wage rises. 
B) incentive to work less when the wage rises. 
C) decision whether to work more or less. 
D) decision whether to join the labor force. 
E) incentive to change jobs. 
A) incentive to work more when the wage rises. 
B) incentive to work less when the wage rises. 
C) decision whether to work more or less. 
D) decision whether to join the labor force. 
E) incentive to change jobs.

Question 3

Assume that the labor market for coffee roasters is in equilibrium.
a.Graph this labor market.
b.A new ad campaign by the coffee industry,"A coffee a day keeps the sleepies away," is successful and consumers prefer more coffee.Graph the effect of this on equilibrium wages W1 and quantity of labor L1 of workers.Label the new equilibrium W2 and L2.
c.At the old W1,what situation exists? How does the labor market adjust to the new W2?

Accepted Answer

@#IMG-DLM& b.This increase in consumer demand shif

Question 4

The government lowers the retirement age to 55.We would expect to see the labor supply curve:

Accepted Answer

A) stay the same. 
B) shift left. 
C) stay the same but move upward. 
D) stay the same but move downward. 
E) shift right. 
A) stay the same. 
B) shift left. 
C) stay the same but move upward. 
D) stay the same but move downward. 
E) shift right.

Question 5

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow.
  
-Assume that the price per duffle bag rises from $10 to $20.What is the value of the marginal product of labor of the twentieth worker?

Accepted Answer

A) $30 
B) $40 
C) $50 
D) $60 
E) $70 
A) $30 
B) $40 
C) $50 
D) $60 
E) $70

Question 6

What is the best economic explanation for the high pay earned by National Hockey League stars?

Accepted Answer

A) There are many highly skilled players. 
B) They have superior bargaining skills in contract negotiations. 
C) Talent allows for higher pay. 
D) Fans want to see really good players,and team owners are willing to pay more for good players. 
E) The league is promoting these players. 
A) There are many highly skilled players. 
B) They have superior bargaining skills in contract negotiations. 
C) Talent allows for higher pay. 
D) Fans want to see really good players,and team owners are willing to pay more for good players. 
E) The league is promoting these players.

Question 7

Economic rent is:

Accepted Answer

A) what a landlord earns by leasing land or capital. 
B) the amount of money a person could have earned by using land for another purpose. 
C) the difference between the market price and the rental price of a piece of land. 
D) the difference between the rental price and the amount of money that could have been earned using the piece of land for another purpose. 
E) the profits earned by a firm in production. 
A) what a landlord earns by leasing land or capital. 
B) the amount of money a person could have earned by using land for another purpose. 
C) the difference between the market price and the rental price of a piece of land. 
D) the difference between the rental price and the amount of money that could have been earned using the piece of land for another purpose. 
E) the profits earned by a firm in production.

Question 8

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
-If the wage is $8 and the price of a cupcake is $4,find King Kupcake's profits at the optimal amount of labor.

Accepted Answer

A) $2,200 
B) $2,600 
C) $4,600 
D) $5,000 
E) $7,500 
A) $2,200 
B) $2,600 
C) $4,600 
D) $5,000 
E) $7,500

Question 9

The fact that workers must share a limited amount of space and equipment results in __________ marginal productivity.

Accepted Answer

A) increasing 
B) constant 
C) fluctuating 
D) unpredictable 
E) decreasing 
A) increasing 
B) constant 
C) fluctuating 
D) unpredictable 
E) decreasing

Question 10

You have recently been trained as a highly specialized medical physician.There is only one hospital that needs your services.You can expect your wages to be __________ compared to what your wages would be in a situation of perfect competition.

Accepted Answer

A) higher 
B) double 
C) half 
D) the same 
E) lower 
A) higher 
B) double 
C) half 
D) the same 
E) lower

Question 11

The labor market for doctors can be represented with the following two equations:
LS =5 + 3W
LD = 30 - 2W
Graph this labor market,highlighting equilibrium wages W* and quantity of labor L*.Label the wages where a shortage and a surplus would exist if the wage deviates from W*.

Accepted Answer

To graph the labor supply curve,find the

Question 12

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow.
  
-Assume that the price of duffle bags is $10.If the marginal product of labor of the sixtieth worker drops by half,what is the value of the marginal product of labor of the sixtieth worker now?

Accepted Answer

A) $10 
B) $15 
C) $20 
D) $25 
E) $30 
A) $10 
B) $15 
C) $20 
D) $25 
E) $30

Question 13

If the wage is temporarily set at $25,it will need to __________ to restore equilibrium.

Accepted Answer

A) rise 
B) fall 
C) remain unchanged 
D) decrease to zero 
E) increase to $30 
A) rise 
B) fall 
C) remain unchanged 
D) decrease to zero 
E) increase to $30

Question 14

If the price of output falls from $5 to $2,the value of the marginal product of labor of all workers:

Accepted Answer

A) increases. 
B) remains unchanged. 
C) increases at an increasing rate. 
D) decreases at an increasing rate. 
E) decreases. 
A) increases. 
B) remains unchanged. 
C) increases at an increasing rate. 
D) decreases at an increasing rate. 
E) decreases.

Question 15

Joe has several different offers for his land,which is located in the city center.He currently rents the land to a community-supported agriculture (CSA)farm for $5,000 per month.The city is offering a yearly rent payment of $12,000,to be paid in monthly installments,to put in a city park.Calculate the economic rent Joe is earning and use it to decide whether he should rent his land to the city.

Accepted Answer

First,convert the $12,000 to monthly ins

Question 16

If the price of output is $2 and the wage for workers is $4,how many workers will the firm hire?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
E) 5 
A) 1 
B) 2 
C) 3 
D) 4 
E) 5

Question 17

The citizens of Kingsville notice that their friends and family in the neighboring city of Deville are earning higher wages.We would expect the labor supply in Kingsville __________ and the labor supply in Deville to __________.

Accepted Answer

A) shift right; shift right 
B) shift left; shift left 
C) remain unchanged; shift right 
D) shift left; shift right 
E) shift right; shift left 
A) shift right; shift right 
B) shift left; shift left 
C) remain unchanged; shift right 
D) shift left; shift right 
E) shift right; shift left

Question 18

The accompanying table shows the supply and demand schedules for workers in the country of Hovian.The supply schedule indicates that the labor supply curve is:

Accepted Answer

A) backward bending. 
B) upward-sloping. 
C) downward-sloping. 
D) vertical. 
E) horizontal. 
A) backward bending. 
B) upward-sloping. 
C) downward-sloping. 
D) vertical. 
E) horizontal.

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 King Kupcake firm's worker productivity is presented in the accompanying table.When King Kupcake hires its 300th worker,what is that worker's marginal product of labor?

Accepted Answer

A) 300 cupcakes 
B) 200 cupcakes 
C) 100 cupcakes 
D) 2 cupcakes 
E) 3 cupcakes 
A) 300 cupcakes 
B) 200 cupcakes 
C) 100 cupcakes 
D) 2 cupcakes 
E) 3 cupcakes

Question 20

If more of the production process for automobiles were switched over to machines,the demand for auto-factory assembly-line workers would __________ for machine maintenance.

Accepted Answer

A) decline but increase 
B) decline and also decline 
C) increase but decline 
D) increase and also increase 
E) remained unchanged but increase 
A) decline but increase 
B) decline and also decline 
C) increase but decline 
D) increase and also increase 
E) remained unchanged but increase

When people make more money,they sometimes take more vacation time.Based on this information,we can say that leisure is a(n):

The substitution effect describes the:

The government lowers the retirement age to 55.We would expect to see the labor supply curve:

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow. -Assume that the price per duffle bag rises from $10 to $20.What is the value of the marginal product of labor of the twentieth worker?

What is the best economic explanation for the high pay earned by National Hockey League stars?

Economic rent is:

The fact that workers must share a limited amount of space and equipment results in __________ marginal productivity.

You have recently been trained as a highly specialized medical physician.There is only one hospital that needs your services.You can expect your wages to be __________ compared to what your wages would be in a situation of perfect competition.

The labor market for doctors can be represented with the following two equations: L_S =5 + 3W L_D = 30 - 2W Graph this labor market,highlighting equilibrium wages W* and quantity of labor L.Label the wages where a shortage and a surplus would exist if the wage deviates from W.

If the wage is temporarily set at $25,it will need to __________ to restore equilibrium.

If the price of output falls from $5 to $2,the value of the marginal product of labor of all workers:

If the price of output is $2 and the wage for workers is $4,how many workers will the firm hire?

The citizens of Kingsville notice that their friends and family in the neighboring city of Deville are earning higher wages.We would expect the labor supply in Kingsville and the labor supply in Deville to .

The accompanying table shows the supply and demand schedules for workers in the country of Hovian.The supply schedule indicates that the labor supply curve is:

If more of the production process for automobiles were switched over to machines,the demand for auto-factory assembly-line workers would __________ for machine maintenance.

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 people make more money,they sometimes take more vacation time.Based on this information,we can say that leisure is a(n):

The substitution effect describes the:

The government lowers the retirement age to 55.We would expect to see the labor supply curve:

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow. -Assume that the price per duffle bag rises from $10 to $20.What is the value of the marginal product of labor of the twentieth worker?

What is the best economic explanation for the high pay earned by National Hockey League stars?

Economic rent is:

The fact that workers must share a limited amount of space and equipment results in __________ marginal productivity.

You have recently been trained as a highly specialized medical physician.There is only one hospital that needs your services.You can expect your wages to be __________ compared to what your wages would be in a situation of perfect competition.

The labor market for doctors can be represented with the following two equations: LS =5 + 3W LD = 30 - 2W Graph this labor market,highlighting equilibrium wages W* and quantity of labor L*.Label the wages where a shortage and a surplus would exist if the wage deviates from W*.

If the wage is temporarily set at $25,it will need to __________ to restore equilibrium.

If the price of output falls from $5 to $2,the value of the marginal product of labor of all workers:

If the price of output is $2 and the wage for workers is $4,how many workers will the firm hire?

The citizens of Kingsville notice that their friends and family in the neighboring city of Deville are earning higher wages.We would expect the labor supply in Kingsville __________ and the labor supply in Deville to __________.

The accompanying table shows the supply and demand schedules for workers in the country of Hovian.The supply schedule indicates that the labor supply curve is:

If more of the production process for automobiles were switched over to machines,the demand for auto-factory assembly-line workers would __________ for machine maintenance.

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

The labor market for doctors can be represented with the following two equations: L_S =5 + 3W L_D = 30 - 2W Graph this labor market,highlighting equilibrium wages W* and quantity of labor L.Label the wages where a shortage and a surplus would exist if the wage deviates from W.

The citizens of Kingsville notice that their friends and family in the neighboring city of Deville are earning higher wages.We would expect the labor supply in Kingsville and the labor supply in Deville to .