Question 1

Derived demand best describes the demand for which of the following options?

Accepted Answer

A) cupcakes 
B) water bottles 
C) hair stylists 
D) cat food 
E) cars 
A) cupcakes 
B) water bottles 
C) hair stylists 
D) cat food 
E) cars

Question 2

Refer to the accompanying graphs to answer the questions that follow.

-Which graph shows the substitution effect dominating the income effect of higher wages?

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 3

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow.
  
-If the wage is $20,Mighty Max will hire __________ workers.

Accepted Answer

A) 20 
B) 30 
C) 40 
D) 50 
E) 60 
A) 20 
B) 30 
C) 40 
D) 50 
E) 60

Question 4

If there is a massive wave of immigration,the wages of workers __________ and it is more profitable for firms to use more __________.

Accepted Answer

A) drop; capital and fewer workers 
B) increase; land and fewer workers 
C) increase; capital and less land 
D) drop; workers and less capital 
E) increase; workers and less land 
A) drop; capital and fewer workers 
B) increase; land and fewer workers 
C) increase; capital and less land 
D) drop; workers and less capital 
E) increase; workers and less land

Question 5

A firm is currently using two inputs: labor and capital.It rents equipment for $1,000,which produces a value of the marginal product of $5,000.It hires workers at $10 an hour who produce a value of the marginal product of $100.The wages of workers rise by 20% and the rental price of capital increases by 25%.The firm should hire __________ labor and __________ capital.

Accepted Answer

A) more; more 
B) more; less 
C) the same amount; the same amount 
D) less; more 
E) less; less 
A) more; more 
B) more; less 
C) the same amount; the same amount 
D) less; more 
E) less; less

Question 6

Lakeside Tubing knows that its total product schedule is as follows.It currently rents an inner tube for $5.Graph the labor demand curve.

Accepted Answer

The first thing we need to do is to find

Question 7

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow.
  
-If the wage of the fifth worker is $20 and her value of the marginal product of labor is $5,the firm:

Accepted Answer

A) benefits by stopping at this level of labor. 
B) is likely to fire the fifth worker. 
C) asks this fifth worker to work overtime. 
D) benefits by hiring more workers. 
E) is likely to lose profit by hiring more workers. 
A) benefits by stopping at this level of labor. 
B) is likely to fire the fifth worker. 
C) asks this fifth worker to work overtime. 
D) benefits by hiring more workers. 
E) is likely to lose profit by hiring more workers.

Question 8

After World War II,social norms relating to women's participation in the labor force relaxed and women were more likely to be employed outside the home.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 9

Cupcakes previously sold for $3 and now sell for $5.The number of workers that King Kupcakes hires will __________.

Accepted Answer

A) fall. 
B) remain unchanged,but employees will have to work overtime. 
C) increase. 
D) stay the same. 
E) increase indefinitely. 
A) fall. 
B) remain unchanged,but employees will have to work overtime. 
C) increase. 
D) stay the same. 
E) increase indefinitely.

Question 10

If you know that the substitution effect dominates the income effect when Joe's wage rises,you can tell that his labor supply curve is:

Accepted Answer

A) upward-sloping. 
B) downward-sloping. 
C) vertical. 
D) upward-sloping at an increasing rate. 
E) downward-sloping at an increasing rate. 
A) upward-sloping. 
B) downward-sloping. 
C) vertical. 
D) upward-sloping at an increasing rate. 
E) downward-sloping at an increasing rate.

Question 11

Your sister complains that you get paid considerably more as a caterer than she is paid as a chef,even though the careers are similar.What might explain this situation?

Accepted Answer

A) People rarely hire caterers for their events and so are willing to pay a premium for the service. 
B) There are many chefs in town but few caterers. 
C) The training required to be a chef is so advanced that people cannot afford her services. 
D) There are many substitutes for a chef. 
E) Your catering business can go to a person's residence,and your sister's position does not allow such mobility. 
A) People rarely hire caterers for their events and so are willing to pay a premium for the service. 
B) There are many chefs in town but few caterers. 
C) The training required to be a chef is so advanced that people cannot afford her services. 
D) There are many substitutes for a chef. 
E) Your catering business can go to a person's residence,and your sister's position does not allow such mobility.

Question 12

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow.
  
-If workers become more productive in a given occupation,they will likely see their employment __________.

Accepted Answer

A) fall 
B) double 
C) rise 
D) stay the same 
E) go into overtime 
A) fall 
B) double 
C) rise 
D) stay the same 
E) go into overtime

Question 13

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow.
  
-If the price of pencils falls,the marginal product of labor will __________ and the value of the marginal product of labor will __________.

Accepted Answer

A) fall; fall 
B) remain unchanged; increase 
C) rise; rise 
D) remain unchanged; decrease 
E) remain unchanged; remain unchanged 
A) fall; fall 
B) remain unchanged; increase 
C) rise; rise 
D) remain unchanged; decrease 
E) remain unchanged; remain unchanged

Question 14

Mary recently opened her own styling salon.After the first month of operation,she looks at the mix of inputs she is using to see whether she should make any changes.The value of marginal product of her stylists is $125,000,and their wage is $20.Her equipment and salon space produces a value of $250,000,and it costs $400 to rent it.The land,which she rents at $800,produces a value of $300,000.Should she change her input mix or is she maximizing profit with her current arrangement?

Accepted Answer

Mary needs to calculate the bang per buc

Question 15

As computer usage in companies and in the home has increased,the labor demand for IT workers has:

Accepted Answer

A) remained steady. 
B) decreased. 
C) fallen to zero. 
D) infinitely increased. 
E) increased. 
A) remained steady. 
B) decreased. 
C) fallen to zero. 
D) infinitely increased. 
E) increased.

Derived demand best describes the demand for which of the following options?

Refer to the accompanying graphs to answer the questions that follow. -Which graph shows the substitution effect dominating the income effect of higher wages?

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow. -If the wage is $20,Mighty Max will hire __________ workers.

If there is a massive wave of immigration,the wages of workers and it is more profitable for firms to use more .

Lakeside Tubing knows that its total product schedule is as follows.It currently rents an inner tube for $5.Graph the labor demand curve.

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow. -If the wage of the fifth worker is $20 and her value of the marginal product of labor is $5,the firm:

After World War II,social norms relating to women's participation in the labor force relaxed and women were more likely to be employed outside the home.We would expect to see the labor supply curve:

Cupcakes previously sold for $3 and now sell for $5.The number of workers that King Kupcakes hires will __________.

If you know that the substitution effect dominates the income effect when Joe's wage rises,you can tell that his labor supply curve is:

Your sister complains that you get paid considerably more as a caterer than she is paid as a chef,even though the careers are similar.What might explain this situation?

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow. -If workers become more productive in a given occupation,they will likely see their employment __________.

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow. -If the price of pencils falls,the marginal product of labor will and the value of the marginal product of labor will .

As computer usage in companies and in the home has increased,the labor demand for IT workers has:

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

Derived demand best describes the demand for which of the following options?

Refer to the accompanying graphs to answer the questions that follow. -Which graph shows the substitution effect dominating the income effect of higher wages?

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow. -If the wage is $20,Mighty Max will hire __________ workers.

If there is a massive wave of immigration,the wages of workers __________ and it is more profitable for firms to use more __________.

Lakeside Tubing knows that its total product schedule is as follows.It currently rents an inner tube for $5.Graph the labor demand curve.

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow. -If the wage of the fifth worker is $20 and her value of the marginal product of labor is $5,the firm:

After World War II,social norms relating to women's participation in the labor force relaxed and women were more likely to be employed outside the home.We would expect to see the labor supply curve:

Cupcakes previously sold for $3 and now sell for $5.The number of workers that King Kupcakes hires will __________.

If you know that the substitution effect dominates the income effect when Joe's wage rises,you can tell that his labor supply curve is:

Your sister complains that you get paid considerably more as a caterer than she is paid as a chef,even though the careers are similar.What might explain this situation?

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow. -If workers become more productive in a given occupation,they will likely see their employment __________.

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow. -If the price of pencils falls,the marginal product of labor will __________ and the value of the marginal product of labor will __________.

As computer usage in companies and in the home has increased,the labor demand for IT workers has:

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

If there is a massive wave of immigration,the wages of workers and it is more profitable for firms to use more .

Use the accompanying graph,which depicts Mighty Max's labor demand for his duffle-bag business,to answer the questions that follow. -If the price of pencils falls,the marginal product of labor will and the value of the marginal product of labor will .