Question 1

According to the principle of marginal productivity, if

Accepted Answer

A)  the product price is less than marginal revenue product (MRP), the firm is using too little of the input. 
B)  the price of an input rises, the quantity demanded of the input will increase. 
C)  MRP is greater than product price, the firm should reduce the use of the input. 
D)  price of the input equals MRP, the firm is maximizing profit. 
A)  the product price is less than marginal revenue product (MRP), the firm is using too little of the input. 
B)  the price of an input rises, the quantity demanded of the input will increase. 
C)  MRP is greater than product price, the firm should reduce the use of the input. 
D)  price of the input equals MRP, the firm is maximizing profit.

Question 2

Physical and human capital investments are

Accepted Answer

A)  different in that the opportunity for economic profit is present for physical capital but not for human capital investments. 
B)  different in that human capital decisions do not involve future income considerations, while physical capital investments do. 
C)  similar in that nonmonetary considerations play an equally important role in both. 
D)  similar in that both involve forgoing current income (and consumption) in an effort to achieve higher future income (and consumption). 
A)  different in that the opportunity for economic profit is present for physical capital but not for human capital investments. 
B)  different in that human capital decisions do not involve future income considerations, while physical capital investments do. 
C)  similar in that nonmonetary considerations play an equally important role in both. 
D)  similar in that both involve forgoing current income (and consumption) in an effort to achieve higher future income (and consumption).

Question 3

If the marginal revenue product of the fifth worker hired by a firm is $15 and the price of a unit of output is $5 regardless of how much is sold, then the marginal product of the fifth worker is

Accepted Answer

A)  15 units of output. 
B)  5 units of output. 
C)  3 units of output. 
D)  45 units of output. 
E)  75 units of output. 
A)  15 units of output. 
B)  5 units of output. 
C)  3 units of output. 
D)  45 units of output. 
E)  75 units of output.

Question 4

The figure below depicts a production function for a firm that produces cookies.
Figure 12-4  
-Refer to Figure 12-4. With regard to cookie production, the figure implies

Accepted Answer

A)  diminishing marginal product of workers. 
B)  diminishing marginal cost of cookie production. 
C)  decreasing cost of cookie production. 
D)  increasing marginal product of workers. 
A)  diminishing marginal product of workers. 
B)  diminishing marginal cost of cookie production. 
C)  decreasing cost of cookie production. 
D)  increasing marginal product of workers.

Question 5

As the price of a resource decreases,

Accepted Answer

A)  demand for that resource increases. 
B)  the quantity demanded of that resource decreases. 
C)  the supply of that resource increases. 
D)  producers are more willing and able to hire that resource. 
E)  producers are less willing and able to hire that resource. 
A)  demand for that resource increases. 
B)  the quantity demanded of that resource decreases. 
C)  the supply of that resource increases. 
D)  producers are more willing and able to hire that resource. 
E)  producers are less willing and able to hire that resource.

Question 6

Use the figure to answer the following question(s).
Figure 12-2  
-The demand D1 and short-run supply SSR of accountants is indicated in Figure 12-2. Which of the following would most likely shift the demand for accountants from D1 to D2?

Accepted Answer

A)  an increase in the number of accounting majors in college 
B)  enacting legislation that increases the complexity of personal and business tax returns 
C)  high wages for accountants 
D)  a reduction in the wages of bookkeepers, a substitute resource for accountants 
A)  an increase in the number of accounting majors in college 
B)  enacting legislation that increases the complexity of personal and business tax returns 
C)  high wages for accountants 
D)  a reduction in the wages of bookkeepers, a substitute resource for accountants

Question 7

The supply of human capital to a particular use is

Accepted Answer

A)  perfectly inelastic in the short run. 
B)  perfectly elastic in the long run. 
C)  more inelastic in the short run since it takes time for persons to acquire a particular skill. 
D)  more elastic in the short run since individuals who already possess the particular skill can be attracted into the labor force in the short run. 
A)  perfectly inelastic in the short run. 
B)  perfectly elastic in the long run. 
C)  more inelastic in the short run since it takes time for persons to acquire a particular skill. 
D)  more elastic in the short run since individuals who already possess the particular skill can be attracted into the labor force in the short run.

Question 8

If coal and oil are substitute inputs in the production of electricity, an increase in the price of oil

Accepted Answer

A)  will increase the demand for coal. 
B)  will reduce the demand for coal. 
C)  will increase the supply of coal. 
D)  will reduce the supply of coal. 
E)  will not affect the demand for coal. 
A)  will increase the demand for coal. 
B)  will reduce the demand for coal. 
C)  will increase the supply of coal. 
D)  will reduce the supply of coal. 
E)  will not affect the demand for coal.

Question 9

Use the information in the table below to answer the following question(s). The firm hires labor competitively and sells its product in a competitive price-taker market.
  
-Refer to Table 12-6. What is the marginal revenue product of the fifth unit of labor?

Accepted Answer

A)  $6 
B)  $36 
C)  $54 
D)  $324 
A)  $6 
B)  $36 
C)  $54 
D)  $324

Question 10

Generally, the supply of a resource in the short run will be

Accepted Answer

A)  more elastic than in the long run. 
B)  less elastic than in the long run. 
C)  equally elastic as the supply of the resource in the long run. 
D)  directly related to the elasticity of demand for the product that the resource helps produce. 
A)  more elastic than in the long run. 
B)  less elastic than in the long run. 
C)  equally elastic as the supply of the resource in the long run. 
D)  directly related to the elasticity of demand for the product that the resource helps produce.

Question 11

An increase in the demand for automobiles will increase the demand for labor used to produce the automobiles due to

Accepted Answer

A)  an increase in the marginal revenue product of labor. 
B)  a decrease in the marginal revenue product of labor. 
C)  an increase in the marginal revenue product of automobiles. 
D)  a decrease in the marginal revenue product of automobiles. 
E)  a decrease in the price of automobiles. 
A)  an increase in the marginal revenue product of labor. 
B)  a decrease in the marginal revenue product of labor. 
C)  an increase in the marginal revenue product of automobiles. 
D)  a decrease in the marginal revenue product of automobiles. 
E)  a decrease in the price of automobiles.

Question 12

As the price paid to a resource increases,

Accepted Answer

A)  the supply of that resource will increase in the resource market. 
B)  the supply of that resource will decrease in the resource market. 
C)  resources will shift from other resource markets to this one. 
D)  resources will shift from this resource market to others. 
E)  resource usage will be unaffected. 
A)  the supply of that resource will increase in the resource market. 
B)  the supply of that resource will decrease in the resource market. 
C)  resources will shift from other resource markets to this one. 
D)  resources will shift from this resource market to others. 
E)  resource usage will be unaffected.

Question 13

If the demand for a consumer good decreases, the demand for resources required to make the good will

Accepted Answer

A)  increase. 
B)  remain the same, but the quantity demanded will increase. 
C)  decrease. 
D)  increase or decrease depending on whether the demand for the product is elastic or inelastic. 
A)  increase. 
B)  remain the same, but the quantity demanded will increase. 
C)  decrease. 
D)  increase or decrease depending on whether the demand for the product is elastic or inelastic.

Question 14

If a college education did not increase worker productivity,

Accepted Answer

A)  no one would go to college. 
B)  the earnings of workers with a college education would tend to be the same as for workers without a college degree. 
C)  the earnings of workers with a college education would still be higher than for those without a college degree. 
D)  the earnings of workers with a college education would be lower than for those without a college degree. 
A)  no one would go to college. 
B)  the earnings of workers with a college education would tend to be the same as for workers without a college degree. 
C)  the earnings of workers with a college education would still be higher than for those without a college degree. 
D)  the earnings of workers with a college education would be lower than for those without a college degree.

Question 15

The demand curve for a human resource will be more elastic when

Accepted Answer

A)  there are more and better substitutes are available for it. 
B)  it is more difficult to substitute other resources for it. 
C)  the demand for the product the resource is used to produce becomes more inelastic. 
D)  the time period under consideration is shorter. 
A)  there are more and better substitutes are available for it. 
B)  it is more difficult to substitute other resources for it. 
C)  the demand for the product the resource is used to produce becomes more inelastic. 
D)  the time period under consideration is shorter.

Question 16

If the price of cotton increases

Accepted Answer

A)  consumers will buy more cotton clothes. 
B)  consumers will increase their purchases of clothing made of other materials. 
C)  clothing producers will stop making cotton clothes. 
D)  clothing producers will not be able to adjust their output. 
A)  consumers will buy more cotton clothes. 
B)  consumers will increase their purchases of clothing made of other materials. 
C)  clothing producers will stop making cotton clothes. 
D)  clothing producers will not be able to adjust their output.

Question 17

The supply of both physical and human resources in the long run is determined primarily by

Accepted Answer

A)  the presence or absence of economies of scale. 
B)  investment choices and resource depreciation. 
C)  sunk costs; what happens in the present cannot change the future. 
D)  the law of diminishing marginal returns. 
A)  the presence or absence of economies of scale. 
B)  investment choices and resource depreciation. 
C)  sunk costs; what happens in the present cannot change the future. 
D)  the law of diminishing marginal returns.

Question 18

Economists refer to expenditures on training, education, and skill development designed to increase the productivity of an individual as

Accepted Answer

A)  overhead expenditures. 
B)  investments in human capital. 
C)  non-exhaustive expenditures. 
D)  social capital. 
A)  overhead expenditures. 
B)  investments in human capital. 
C)  non-exhaustive expenditures. 
D)  social capital.

Question 19

Table 12-2
  
-Refer to Table 12-2. This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor. Each baseball sells for $5 in a competitive market. For which level of employment is the marginal product of labor greatest?

Accepted Answer

A)  1 worker 
B)  2 workers 
C)  3 workers 
D)  4 workers 
A)  1 worker 
B)  2 workers 
C)  3 workers 
D)  4 workers

Question 20

The labor supply curve reflects how

Accepted Answer

A)  workers' decisions about the labor-leisure tradeoff respond to a change in the wage. 
B)  workers' decisions about the opportunity cost of labor respond to a change in the quantity of labor supplied. 
C)  firms' decisions about the labor-leisure tradeoff respond to the quantity of labor demanded. 
D)  firms' decisions about how the quantity of labor they hire respond to changes in their opportunities to earn profits. 
A)  workers' decisions about the labor-leisure tradeoff respond to a change in the wage. 
B)  workers' decisions about the opportunity cost of labor respond to a change in the quantity of labor supplied. 
C)  firms' decisions about the labor-leisure tradeoff respond to the quantity of labor demanded. 
D)  firms' decisions about how the quantity of labor they hire respond to changes in their opportunities to earn profits.

According to the principle of marginal productivity, if

Physical and human capital investments are

If the marginal revenue product of the fifth worker hired by a firm is $15 and the price of a unit of output is $5 regardless of how much is sold, then the marginal product of the fifth worker is

The figure below depicts a production function for a firm that produces cookies. Figure 12-4 -Refer to Figure 12-4. With regard to cookie production, the figure implies

As the price of a resource decreases,

Use the figure to answer the following question(s). Figure 12-2 -The demand D₁ and short-run supply S_SR of accountants is indicated in Figure 12-2. Which of the following would most likely shift the demand for accountants from D₁ to D₂?

The supply of human capital to a particular use is

If coal and oil are substitute inputs in the production of electricity, an increase in the price of oil

Use the information in the table below to answer the following question(s). The firm hires labor competitively and sells its product in a competitive price-taker market. -Refer to Table 12-6. What is the marginal revenue product of the fifth unit of labor?

Generally, the supply of a resource in the short run will be

An increase in the demand for automobiles will increase the demand for labor used to produce the automobiles due to

As the price paid to a resource increases,

If the demand for a consumer good decreases, the demand for resources required to make the good will

If a college education did not increase worker productivity,

The demand curve for a human resource will be more elastic when

If the price of cotton increases

The supply of both physical and human resources in the long run is determined primarily by

Economists refer to expenditures on training, education, and skill development designed to increase the productivity of an individual as

Table 12-2 -Refer to Table 12-2. This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor. Each baseball sells for $5 in a competitive market. For which level of employment is the marginal product of labor greatest?

The labor supply curve reflects how

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters

Exam 12: The Supply of and Demand for Productive Resources

According to the principle of marginal productivity, if

Physical and human capital investments are

If the marginal revenue product of the fifth worker hired by a firm is $15 and the price of a unit of output is $5 regardless of how much is sold, then the marginal product of the fifth worker is

The figure below depicts a production function for a firm that produces cookies. Figure 12-4 -Refer to Figure 12-4. With regard to cookie production, the figure implies

As the price of a resource decreases,

Use the figure to answer the following question(s). Figure 12-2 -The demand D1 and short-run supply SSR of accountants is indicated in Figure 12-2. Which of the following would most likely shift the demand for accountants from D1 to D2?

The supply of human capital to a particular use is

If coal and oil are substitute inputs in the production of electricity, an increase in the price of oil

Use the information in the table below to answer the following question(s). The firm hires labor competitively and sells its product in a competitive price-taker market. -Refer to Table 12-6. What is the marginal revenue product of the fifth unit of labor?

Generally, the supply of a resource in the short run will be

An increase in the demand for automobiles will increase the demand for labor used to produce the automobiles due to

As the price paid to a resource increases,

If the demand for a consumer good decreases, the demand for resources required to make the good will

If a college education did not increase worker productivity,

The demand curve for a human resource will be more elastic when

If the price of cotton increases

The supply of both physical and human resources in the long run is determined primarily by

Economists refer to expenditures on training, education, and skill development designed to increase the productivity of an individual as

Table 12-2 -Refer to Table 12-2. This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor. Each baseball sells for $5 in a competitive market. For which level of employment is the marginal product of labor greatest?

The labor supply curve reflects how

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters

Use the figure to answer the following question(s). Figure 12-2 -The demand D₁ and short-run supply S_SR of accountants is indicated in Figure 12-2. Which of the following would most likely shift the demand for accountants from D₁ to D₂?