Question 1

A rise in the minimum wage increases the demand for union labour because this policy change

Accepted Answer

A)  raises the productivity of union labour. 
B)  lowers the wage rate paid to union labour. 
C)  lowers the productivity of union labour. 
D)  lowers the cost of a substitute for union labour. 
E)  raises the cost of a substitute for union labour. 
A)  raises the productivity of union labour. 
B)  lowers the wage rate paid to union labour. 
C)  lowers the productivity of union labour. 
D)  lowers the cost of a substitute for union labour. 
E)  raises the cost of a substitute for union labour. E

Question 2

-Suppose the Adelaide Crows are considering adding another backup ruckman to their list of players. If the salary the Crows would have to pay equals $1,000,000 and the value of marginal product of the new ruckman equals $1,200,000, to maximise their profit the Crows should

Accepted Answer

A)  not add the new ruckman and, de-list at least one other backup ruckman. 
B)  not add the new ruckman. 
C)  add the new ruckman. 
D)  add two new ruckmen. 
E)  Not enough information is given to determine if the Crows should hire the ruckman. 
A)  not add the new ruckman and, de-list at least one other backup ruckman. 
B)  not add the new ruckman. 
C)  add the new ruckman. 
D)  add two new ruckmen. 
E)  Not enough information is given to determine if the Crows should hire the ruckman. C

Question 3

-The above figure shows the demand for labour curve for workers at a Pizza Hut in Darwin. If the wage rate is $6 per hour, then the i. quantity of workers Pizza Hut demands is 10 workers.
Ii) Pizza Hut would have been willing to hire the 6th worker even if it had to pay $7 per hour rather than $6 per hour.
Iii) value of the marginal product of the 10th worker is $6 per hour.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii and iii E

Question 4

The rental rate of land is the payment for the resource land. The lower the rental rate, the greater the

Accepted Answer

A)  quantity supplied of land. 
B)  elasticity of supply for land. 
C)  supply of land. 
D)  demand for land. 
E)  quantity demanded of land. 
A)  quantity supplied of land. 
B)  elasticity of supply for land. 
C)  supply of land. 
D)  demand for land. 
E)  quantity demanded of land.

Question 5

The rule for maximising profit is to hire labour up to the point at which the value of marginal product

Accepted Answer

A)  equals the price of the product produced. 
B)  is greater than the wage rate. 
C)  equals the wage rate. 
D)  is less than the wage rate. 
E)  is a mirror image of the wage rate. 
A)  equals the price of the product produced. 
B)  is greater than the wage rate. 
C)  equals the wage rate. 
D)  is less than the wage rate. 
E)  is a mirror image of the wage rate.

Question 6

The value of the marginal product of labour

Accepted Answer

A)  declines only if each worker is paid more than the previous worker. 
B)  always increases as more labour is hired. 
C)  at some point declines as more workers are hired. 
D)  at first decreases and then increases as more workers are hired. 
E)  is constant as long as each worker is paid the same wage rate. 
A)  declines only if each worker is paid more than the previous worker. 
B)  always increases as more labour is hired. 
C)  at some point declines as more workers are hired. 
D)  at first decreases and then increases as more workers are hired. 
E)  is constant as long as each worker is paid the same wage rate.

Question 7

The price of coal is currently $80 per tonne and the interest rate is 10 per cent per year. If next year's expected price is $86 per tonne, a firm that owns 1,000 tonnes of coal

Accepted Answer

A)  will sell none of its coal now but might sell it all next year. 
B)  will sell half of the coal today and half of it next year. 
C)  might or might not sell the coal today, depending on the price the firm paid for the coal. 
D)  will sell none of its coal now but will sell it all next year regardless of the price next year. 
E)  will sell all its coal now. 
A)  will sell none of its coal now but might sell it all next year. 
B)  will sell half of the coal today and half of it next year. 
C)  might or might not sell the coal today, depending on the price the firm paid for the coal. 
D)  will sell none of its coal now but will sell it all next year regardless of the price next year. 
E)  will sell all its coal now.

Question 8

-Peyton is a personal trainer and works at several gyms in her neighbourhood. Peyton's labour supply curve is shown above. Which of the following statements is true regarding Peyton's labour supply? i. Peyton is willing to supply more labour and give up leisure at wages between $50 and $75 per hour.
Ii) Peyton will not work for less than $30 per hour.
Iii) If the wage increases above $75 per hour, Peyton will choose to take more leisure.

Accepted Answer

A)  ii and iii 
B)  ii only 
C)  i and ii 
D)  iii only 
E)  i, ii and iii 
A)  ii and iii 
B)  ii only 
C)  i and ii 
D)  iii only 
E)  i, ii and iii

Question 9

The more people who remain in school for full-time education and training, the ________ is the ________ low-skilled labour.

Accepted Answer

A)  larger; supply of 
B)  smaller; supply of 
C)  smaller; demand for 
D)  larger; demand for 
E)  less elastic; demand for 
A)  larger; supply of 
B)  smaller; supply of 
C)  smaller; demand for 
D)  larger; demand for 
E)  less elastic; demand for

Question 10

The demand curve for labour is the same as the firm's

Accepted Answer

A)  marginal revenue curve. 
B)  value of marginal product of labour curve. 
C)  marginal cost curve. 
D)  wage rate curve. 
E)  supply of output curve. 
A)  marginal revenue curve. 
B)  value of marginal product of labour curve. 
C)  marginal cost curve. 
D)  wage rate curve. 
E)  supply of output curve.

Question 11

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $53. Which of the following is correct?

Accepted Answer

A)  The firm is employing the profit-maximising quantity of labour. 
B)  Too much labour is currently employed and the firm will lay off some workers. 
C)  Too few workers are currently employed and the firm will hire more workers. 
D)  The firm should shut down and produce nothing. 
E)  More information about the price of the product is needed. 
A)  The firm is employing the profit-maximising quantity of labour. 
B)  Too much labour is currently employed and the firm will lay off some workers. 
C)  Too few workers are currently employed and the firm will hire more workers. 
D)  The firm should shut down and produce nothing. 
E)  More information about the price of the product is needed.

Question 12

-Kevin owns a personal training gym in Darwin. He charges $41 per session. The above table shows the marginal product of trainers in Kevin's gym. If Kevin hires one trainer, the value of marginal product of this trainer equals

Accepted Answer

A)  4 clients. 
B)  $410. 
C)  $164. 
D)  $41. 
E)  None of the above. 
A)  4 clients. 
B)  $410. 
C)  $164. 
D)  $41. 
E)  None of the above.

Question 13

If the demand for a good increases, the demand for the factors used to produce the good

Accepted Answer

A)  increases. 
B)  stays the same. 
C)  decreases. 
D)  could increase, decrease or stay the same depending on whether the demand for the good is elastic, inelastic or unit elastic. 
E)  None of the above answers is correct. 
A)  increases. 
B)  stays the same. 
C)  decreases. 
D)  could increase, decrease or stay the same depending on whether the demand for the good is elastic, inelastic or unit elastic. 
E)  None of the above answers is correct.

Question 14

Unions support immigration restrictions because the restrictions create

Accepted Answer

A)  a decrease in the supply of union labour. 
B)  an increase in the supply of union labour. 
C)  a decrease in the demand for union labour. 
D)  unemployment. 
E)  an increase in the demand for union labour. 
A)  a decrease in the supply of union labour. 
B)  an increase in the supply of union labour. 
C)  a decrease in the demand for union labour. 
D)  unemployment. 
E)  an increase in the demand for union labour.

Question 15

If the wage rate exceeds the value of marginal product, a firm

Accepted Answer

A)  can increase its profit by firing some workers. 
B)  can increase its profit by increasing the wage rate and not changing its employment. 
C)  can increase its profit by hiring more workers. 
D)  can increase its profit by increasing the wage rate and increasing its employment. 
E)  is maximising its profit. 
A)  can increase its profit by firing some workers. 
B)  can increase its profit by increasing the wage rate and not changing its employment. 
C)  can increase its profit by hiring more workers. 
D)  can increase its profit by increasing the wage rate and increasing its employment. 
E)  is maximising its profit.

Question 16

-The rule for employing a profit-maximising amount of labour is to continue to hire additional workers until the additional worker's value of marginal product is

Accepted Answer

A)  equal to the price of the product. 
B)  less than the price of the product. 
C)  greater than 1. 
D)  equal to the wage rate. 
E)  less than the wage rate. 
A)  equal to the price of the product. 
B)  less than the price of the product. 
C)  greater than 1. 
D)  equal to the wage rate. 
E)  less than the wage rate.

Question 17

A technological change that raises the value of marginal product of capital ________ the rental rate for capital because the ________.

Accepted Answer

A)  raises; demand curve for capital shifts rightward 
B)  lowers; supply curve of capital shifts rightward 
C)  lowers; demand curve for capital shifts leftward 
D)  raises; supply curve of capital shifts leftward 
E)  raises; demand curve for capital shifts leftward 
A)  raises; demand curve for capital shifts rightward 
B)  lowers; supply curve of capital shifts rightward 
C)  lowers; demand curve for capital shifts leftward 
D)  raises; supply curve of capital shifts leftward 
E)  raises; demand curve for capital shifts leftward

Question 18

The supply of each particular block of land is

Accepted Answer

A)  elastic but not perfectly elastic. 
B)  inelastic but not perfectly inelastic. 
C)  unit elastic. 
D)  perfectly inelastic. 
E)  perfectly elastic. 
A)  elastic but not perfectly elastic. 
B)  inelastic but not perfectly inelastic. 
C)  unit elastic. 
D)  perfectly inelastic. 
E)  perfectly elastic.

Question 19

Which of the following is NOT a method used by unions to increase their members' wages?

Accepted Answer

A)  Increase union members' productivity. 
B)  Support minimum wage increases. 
C)  Increase the demand for union workers. 
D)  Limit the supply of non-union workers. 
E)  None of the above because they are all methods unions use to increase their members' wages. 
A)  Increase union members' productivity. 
B)  Support minimum wage increases. 
C)  Increase the demand for union workers. 
D)  Limit the supply of non-union workers. 
E)  None of the above because they are all methods unions use to increase their members' wages.

Question 20

When the rental rate for capital falls, the ________ capital ________.

Accepted Answer

A)  demand for; increases 
B)  quantity demanded of; increases 
C)  demand for; decreases 
D)  quantity demanded of; decreases 
E)  supply of; increases 
A)  demand for; increases 
B)  quantity demanded of; increases 
C)  demand for; decreases 
D)  quantity demanded of; decreases 
E)  supply of; increases

A rise in the minimum wage increases the demand for union labour because this policy change

-Suppose the Adelaide Crows are considering adding another backup ruckman to their list of players. If the salary the Crows would have to pay equals $1,000,000 and the value of marginal product of the new ruckman equals $1,200,000, to maximise their profit the Crows should

The rental rate of land is the payment for the resource land. The lower the rental rate, the greater the

The rule for maximising profit is to hire labour up to the point at which the value of marginal product

The value of the marginal product of labour

The price of coal is currently $80 per tonne and the interest rate is 10 per cent per year. If next year's expected price is $86 per tonne, a firm that owns 1,000 tonnes of coal

The more people who remain in school for full-time education and training, the is the low-skilled labour.

The demand curve for labour is the same as the firm's

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $53. Which of the following is correct?

-Kevin owns a personal training gym in Darwin. He charges $41 per session. The above table shows the marginal product of trainers in Kevin's gym. If Kevin hires one trainer, the value of marginal product of this trainer equals

If the demand for a good increases, the demand for the factors used to produce the good

Unions support immigration restrictions because the restrictions create

If the wage rate exceeds the value of marginal product, a firm

-The rule for employing a profit-maximising amount of labour is to continue to hire additional workers until the additional worker's value of marginal product is

A technological change that raises the value of marginal product of capital the rental rate for capital because the .

The supply of each particular block of land is

Which of the following is NOT a method used by unions to increase their members' wages?

When the rental rate for capital falls, the capital .

Getting Started

The Australian and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Economic Inequality

Filters

Exam 18: Markets for Factors of Production

A rise in the minimum wage increases the demand for union labour because this policy change

-Suppose the Adelaide Crows are considering adding another backup ruckman to their list of players. If the salary the Crows would have to pay equals $1,000,000 and the value of marginal product of the new ruckman equals $1,200,000, to maximise their profit the Crows should

The rental rate of land is the payment for the resource land. The lower the rental rate, the greater the

The rule for maximising profit is to hire labour up to the point at which the value of marginal product

The value of the marginal product of labour

The price of coal is currently $80 per tonne and the interest rate is 10 per cent per year. If next year's expected price is $86 per tonne, a firm that owns 1,000 tonnes of coal

The more people who remain in school for full-time education and training, the ________ is the ________ low-skilled labour.

The demand curve for labour is the same as the firm's

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $53. Which of the following is correct?

-Kevin owns a personal training gym in Darwin. He charges $41 per session. The above table shows the marginal product of trainers in Kevin's gym. If Kevin hires one trainer, the value of marginal product of this trainer equals

If the demand for a good increases, the demand for the factors used to produce the good

Unions support immigration restrictions because the restrictions create

If the wage rate exceeds the value of marginal product, a firm

-The rule for employing a profit-maximising amount of labour is to continue to hire additional workers until the additional worker's value of marginal product is

A technological change that raises the value of marginal product of capital ________ the rental rate for capital because the ________.

The supply of each particular block of land is

Which of the following is NOT a method used by unions to increase their members' wages?

When the rental rate for capital falls, the ________ capital ________.

Getting Started

The Australian and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Economic Inequality

Filters

The more people who remain in school for full-time education and training, the is the low-skilled labour.

A technological change that raises the value of marginal product of capital the rental rate for capital because the .

When the rental rate for capital falls, the capital .