Table 18-6 Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. \[\begin{array} { | c | c | c | c | c | c | } \hline \begin{array} { c } \text { Labor } \\ \text { (Number of } \\ \text { workers) } \end{array} & \begin{array} { c } \text { Output } \\ \text { (Cupcakes per } \\ \text { day) } \end{array} & \begin{array} { c } \text { Marginal } \\ \text { Product } \\ \text { of Labor } \\ \text { (Cupcakes per } \\ \text { day) } \end{array} & \begin{array} { c } \text { Value of the } \\ \text { Marginal } \\ \text { Product of Labor } \\ \text { (Cupcakes) } \end{array} & \begin{array} { c } \text { Wage } \\ \text { (Dollarsper } \\ \text { worker per } \\ \text { day) } \end{array} & \begin{array} { c } \text { Margin } \\ \text { Profit } \\ \text { (Dollar } \end{array} \\ \hline 0 & 0 & & & 325 & \\ \hline 1 & 200 & & & 325 & \\ \hline 2 & 350 & & & 325 & \\ \hline 3 & 475 & & & 325 & \\ \hline 4 & 575 & & &325 & \\ \hline \end{array}\] -Refer to Table 18-6. Suppose that there is a technological advance that allows MadeFromScratch employees to produce more cupcakes than they could before. Because of this change, the firm's

A) demand for labor shifts right. B) demand for labor shifts left. C) supply of labor shifts right. D) supply of labor shifts left. A) demand for labor shifts right. B) demand for labor shifts left. C) supply of labor shifts right. D) supply of labor shifts left.

Figure 18-5 -Refer to Figure 18-5. If the relevant labor supply curve is S2 and the current wage is W1,

A) there is a surplus of labor. B) the quantity of labor demanded exceeds the quantity of labor supplied. C) an increase in the minimum wage could restore equilibrium in the market. D) firms will need to raise the wage to restore equilibrium. A) there is a surplus of labor. B) the quantity of labor demanded exceeds the quantity of labor supplied. C) an increase in the minimum wage could restore equilibrium in the market. D) firms will need to raise the wage to restore equilibrium.

Table 18-6 Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. \[\begin{array} { | c | c | c | c | c | c | } \hline \begin{array} { c } \text { Labor } \\ \text { (Number of } \\ \text { workers) } \end{array} & \begin{array} { c } \text { Output } \\ \text { (Cupcakes per } \\ \text { day) } \end{array} & \begin{array} { c } \text { Marginal } \\ \text { Product } \\ \text { of Labor } \\ \text { (Cupcakes per } \\ \text { day) } \end{array} & \begin{array} { c } \text { Value of the } \\ \text { Marginal } \\ \text { Product of Labor } \\ \text { (Cupcakes) } \end{array} & \begin{array} { c } \text { Wage } \\ \text { (Dollarsper } \\ \text { worker per } \\ \text { day) } \end{array} & \begin{array} { c } \text { Margin } \\ \text { Profit } \\ \text { (Dollar } \end{array} \\ \hline 0 & 0 & & & 325 & \\ \hline 1 & 200 & & & 325 & \\ \hline 2 & 350 & & & 325 & \\ \hline 3 & 475 & & & 325 & \\ \hline 4 & 575 & & &325 & \\ \hline \end{array}\] -Refer to Table 18-6. Assuming MadeFromScratch is a competitive, profit-maximizing firm, how many workers will the firm hire?

A) Two workers B) Three workers C) Four workers D) Five workers A) Two workers B) Three workers C) Four workers D) Five workers

Exam 18: The Markets for the Factors of Production

Suppose that the "Millennial" generation values leisure more than past generations. We can expect a decrease in the labor supply as the Millennials enter their prime working ages and a corresponding decrease in wages.

Free

(True/False)

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Question 1

Correct Answer:

Verified

False

Scenario 18-3 Gabrielle has two jobs, one for the winter and one for the summer. In the winter, she works as a lift attendant at a ski resort where she earns $16 per hour. During the summer, she drives a tour bus around the ski resort, earning $11 per hour. -Refer to Scenario 18-3. During the winter months, what is Gabrielle's opportunity cost of taking an hour off work to go enjoy some leisure time?

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(Multiple Choice)

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Question 2

Correct Answer:

Verified

A

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

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(Multiple Choice)

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Question 3

Correct Answer:

Verified

B

Figure 18-6 -Refer to Figure 18-6. Which of the following is a possible explanation of the shift of the labor demand curve from D₁ to D₂?

(Multiple Choice)

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Question 4

Table 18-6 Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. Labor (Number of workers) Output (Cupcakes per day) Marginal Product of Labor (Cupcakes per day) Value of the Marginal Product of Labor (Cupcakes) Wage (Dollarsper worker per day) Margin Profit (Dollar 0 0 325 1 200 325 2 350 325 3 475 325 4 575 325 -Refer to Table 18-6. Suppose that there is a technological advance that allows MadeFromScratch employees to produce more cupcakes than they could before. Because of this change, the firm's

(Multiple Choice)

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Question 5

Which of the following would shift a market labor supply curve to the left?

(Multiple Choice)

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Question 6

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good multiplied by the marginal product of the last worker hired.

(True/False)

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Question 7

Figure 18-1 -Refer to Figure 18-1. Suppose the firm sells its output for $14 per unit, and it pays each of its workers $120 per day. When output increases from 57 units to 69 units, the

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Question 8

Figure 18-5 -Refer to Figure 18-5. If the relevant labor supply curve is S₂ and the current wage is W₁,

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Question 9

Bill is a laborer. What is the relationship between Bill's wage and his opportunity cost of an hour of leisure?

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Question 10

Scenario 18-2 Gertrude Kelp owns three boats that participate in commercial fishing for fresh Pacific salmon off the coast of Alaska. As part of her business, she hires a captain and several crew members for each boat. In the market for fresh Pacific salmon, there are thousands of firms like Gertrude's. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market. -Refer to Scenario 18-2. If the price of fresh Pacific salmon were to decrease significantly, it is most likely that Gertrude would

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Question 11

Average productivity can be measured as total output divided by total units of labor.

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Question 12

Table 18-6 Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. Labor (Number of workers) Output (Cupcakes per day) Marginal Product of Labor (Cupcakes per day) Value of the Marginal Product of Labor (Cupcakes) Wage (Dollarsper worker per day) Margin Profit (Dollar 0 0 325 1 200 325 2 350 325 3 475 325 4 575 325 -Refer to Table 18-6. Assuming MadeFromScratch is a competitive, profit-maximizing firm, how many workers will the firm hire?

(Multiple Choice)

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Question 13

Figure 18-8 The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. -Refer to Figure 18-8. Suppose the shop pays each of its mechanics $210 per day. Over what interval of prices (that is, charges per car repair, P) would the shop maximize its profit by hiring exactly 3 mechanics? (Determine P₁ and P₂ such that P₁< P < P₂).

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Question 14

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases for many individuals. Suppose, it generally takes about 10 years to become a practicing doctor. Holding all else constant, in 10 years the equilibrium wage for doctors will

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Question 15

Table 18-4 -Refer to Table 18-4. How many workers should the firm hire?

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Question 16

Labor-saving technological advances increase the marginal productivity of labor.

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Question 17

A recent flood in the Midwest has destroyed much of the farmland that lies in fertile regions near the rivers. Describe the effect of the flood on the marginal productivity of land, labor, and capital. How would the flood affect the price of inputs? Provide some examples.

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Question 18

Oil field workers' wages are directly tied to the world price of oil.

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Question 19

Consider the market for capital equipment. Suppose the market price of firms' output increases. Holding all else constant, the equilibrium quantity of capital equipment will

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Question 20

Exam 18: The Markets for the Factors of Production

Suppose that the "Millennial" generation values leisure more than past generations. We can expect a decrease in the labor supply as the Millennials enter their prime working ages and a corresponding decrease in wages.

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

Figure 18-6 ​ -Refer to Figure 18-6. Which of the following is a possible explanation of the shift of the labor demand curve from D1 to D2?

Which of the following would shift a market labor supply curve to the left?

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good multiplied by the marginal product of the last worker hired.

Figure 18-1 -Refer to Figure 18-1. Suppose the firm sells its output for $14 per unit, and it pays each of its workers $120 per day. When output increases from 57 units to 69 units, the

Figure 18-5 -Refer to Figure 18-5. If the relevant labor supply curve is S2 and the current wage is W1,

Bill is a laborer. What is the relationship between Bill's wage and his opportunity cost of an hour of leisure?

Average productivity can be measured as total output divided by total units of labor.

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases for many individuals. Suppose, it generally takes about 10 years to become a practicing doctor. Holding all else constant, in 10 years the equilibrium wage for doctors will

Table 18-4 ​ ​ ​ -Refer to Table 18-4. How many workers should the firm hire?

Labor-saving technological advances increase the marginal productivity of labor.

A recent flood in the Midwest has destroyed much of the farmland that lies in fertile regions near the rivers. Describe the effect of the flood on the marginal productivity of land, labor, and capital. How would the flood affect the price of inputs? Provide some examples.

Oil field workers' wages are directly tied to the world price of oil.

Consider the market for capital equipment. Suppose the market price of firms' output increases. Holding all else constant, the equilibrium quantity of capital equipment will

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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Figure 18-6 -Refer to Figure 18-6. Which of the following is a possible explanation of the shift of the labor demand curve from D₁ to D₂?

Figure 18-5 -Refer to Figure 18-5. If the relevant labor supply curve is S₂ and the current wage is W₁,

Table 18-4 -Refer to Table 18-4. How many workers should the firm hire?