Exam 12: The Supply of and Demand for Productive Resources

Table 12-3 -Refer to Table 12-3. Suppose that the firm pays its workers $55 per day. Each unit of output sells for $12. How many days of labor should the firm hire?

If the price of airline tickets falls, what will happen to the demand curve for flight attendants?

Unions often attempt to obtain stricter certification requirements and/or longer apprenticeships. These changes will tend to raise union workers' wages because they

Why is a college graduate more likely to get a job in management than is someone with only a high school diploma, even when the job has nothing to do with a specific type of education?

If skilled labor costs three times as much as unskilled labor, a profit-maximizing firm will vary the quantity of each type of labor used until the

Suppose the United Auto Workers' Union succeeded in obtaining a 10 percent increase in the wages of its workers and that the wage increase caused automobile prices to rise. Employment in the auto industry would be most likely to decline significantly if

If the price of crude oil fell significantly, which of the following would be most likely to happen?

If businesses found that changing economic conditions made it attractive for them to hire a larger number of economics majors, we would expect

If a construction boom leads to an increase in the price of lumber, how will the higher lumber prices influence the wood furniture market?

As the price of land decreases along its demand curve, the relative price of land

When the price of a resource is set below equilibrium,

An increase in the demand for a resource

Which of the following would tend to decrease the demand for carpenters?

Marginal revenue product is the

Use the figure to answer the following question(s). Figure 12-1 -If one short-run supply curve in Figure 12-1 was for truck drivers and the other was for nuclear physicists (also short-run), which one would probably be the supply curve for physicists?

The demand for most products is likely to be

An improvement in technology that allows workers to process twice as many insurance forms in an hour than before will cause

If the marginal physical product (MPP) of labor is 60 and the price of labor per period is $20, the MPP of machinery is 75 and the price of the machinery per period is $25, in order to achieve optimal input proportions the firm should use

The figure below depicts a production function for a firm that produces cookies. Figure 12-4 -The Hardboard Construction Company hired Bob at $10 an hour, but its output of doll houses only increased by three units a day. Two weeks later, the company purchased an $8 hammer for Bob and output increased by twelve units. Since the hammer increased the marginal product more than Bob did, and at less cost, Hardboard fired Bob. Is this consistent with the theory of marginal productivity? Why or why not?

If skilled labor is three times the cost of unskilled labor, a profit-maximizing firm will vary the quantity of each type of labor until the