Question 1

Other things being equal, the elasticity of demand for labor will be greater the

Accepted Answer

A) smaller the proportion of total costs accountable for by labor costs. 
B) smaller the elasticity of demand for the product it produces. 
C) larger the number of close substitute resources available. 
D) more rapid the decline in its marginal productivity. 
A) smaller the proportion of total costs accountable for by labor costs. 
B) smaller the elasticity of demand for the product it produces. 
C) larger the number of close substitute resources available. 
D) more rapid the decline in its marginal productivity.

Question 2

The marginal productivity theory of income distribution holds that all resources are paid according to their marginal contribution to society's output.

Accepted Answer

A) True 
 B)False

Question 3

Other things being equal, a labor union will find it harder to obtain a wage increase for its members the

Accepted Answer

A) less elastic is the demand for the product labor produces. 
B) easier it is to substitute other resources for labor. 
C) greater the amount of unionization in the industry. 
D) less elastic is the demand for labor. 
A) less elastic is the demand for the product labor produces. 
B) easier it is to substitute other resources for labor. 
C) greater the amount of unionization in the industry. 
D) less elastic is the demand for labor.

Question 4

The labor demand curve of a firm that sells its product in an imperfectly competitive market

Accepted Answer

A) is downsloping, solely because of the law of diminishing returns. 
B) is downsloping and flatter than the labor demand curve of a firm that sells its product in a purely competitive market. 
C) is upsloping. 
D) is downsloping because of both declining marginal productivity and declining product prices as quantity increases. 
A) is downsloping, solely because of the law of diminishing returns. 
B) is downsloping and flatter than the labor demand curve of a firm that sells its product in a purely competitive market. 
C) is upsloping. 
D) is downsloping because of both declining marginal productivity and declining product prices as quantity increases.

Question 5

Resource pricing is important because

Accepted Answer

A) resource prices are a major determinant of money incomes. 
B) resource prices allocate scarce resources among alternative uses. 
C) resource prices, along with resource productivity, are important to firms in minimizing their costs. 
D) of all of these reasons. 
A) resource prices are a major determinant of money incomes. 
B) resource prices allocate scarce resources among alternative uses. 
C) resource prices, along with resource productivity, are important to firms in minimizing their costs. 
D) of all of these reasons.

Question 6

The marginal resource cost of labor for a firm refers to the

Accepted Answer

A) additional cost of each additional unit of labor employed. 
B) additional cost of producing each extra unit of output. 
C) same concept as the marginal cost of the firm. 
D) same concept as the marginal revenue product of a firm. 
A) additional cost of each additional unit of labor employed. 
B) additional cost of producing each extra unit of output. 
C) same concept as the marginal cost of the firm. 
D) same concept as the marginal revenue product of a firm.

Question 7

If MPx > MPy, a firm should hire more x and less y.

Accepted Answer

A) True 
 B)False

Question 8

A change in a factor's price will have a greater effect on the quantity of the factor demanded the

Accepted Answer

A) smaller the change in the factor's price. 
B) smaller the factor's share of total cost of production. 
C) more elastic is the demand for the product the factor helps to make. 
D) more inelastic is the demand for the product the factor helps to make. 
A) smaller the change in the factor's price. 
B) smaller the factor's share of total cost of production. 
C) more elastic is the demand for the product the factor helps to make. 
D) more inelastic is the demand for the product the factor helps to make.

Question 9

The labor demand curve of a firm

Accepted Answer

A) will shift to the left if the price of the product that the labor is producing falls. 
B) is perfectly elastic if the firm is selling its product in a purely competitive market. 
C) reflects a direct relationship between the number of workers hired and the money wage rate. 
D) is the same as its marginal product curve. 
A) will shift to the left if the price of the product that the labor is producing falls. 
B) is perfectly elastic if the firm is selling its product in a purely competitive market. 
C) reflects a direct relationship between the number of workers hired and the money wage rate. 
D) is the same as its marginal product curve.

Question 10

The marginal revenue product of labor refers to the

Accepted Answer

A) additional output produced by adding one more unit of labor. 
B) marginal product of an additional unit of labor. 
C) additional revenue resulting from using one more unit of labor. 
D) number of units of output produced by a given number of units of labor. 
A) additional output produced by adding one more unit of labor. 
B) marginal product of an additional unit of labor. 
C) additional revenue resulting from using one more unit of labor. 
D) number of units of output produced by a given number of units of labor.

Question 11

A competitive employer is using labor in such an amount that labor's MRP is $10 and its wage rate is $8.This firm

Accepted Answer

A) should hire more labor because this will increase profits. 
B) should hire more labor, although this may either increase or decrease profits. 
C) is currently hiring the profit-maximizing amount of labor. 
D) is selling its product in an imperfectly competitive market. 
A) should hire more labor because this will increase profits. 
B) should hire more labor, although this may either increase or decrease profits. 
C) is currently hiring the profit-maximizing amount of labor. 
D) is selling its product in an imperfectly competitive market.

Question 12

(Last Word) When they were first introduced, ATMs

Accepted Answer

A) were a substitute for bank tellers, but eventually became a complement. 
B) were a substitute for bank tellers, and their existence has continued to depress the demand for tellers. 
C) were a complement to bank tellers, but over time have replaced them. 
D) had no effect on the demand for bank tellers. 
A) were a substitute for bank tellers, but eventually became a complement. 
B) were a substitute for bank tellers, and their existence has continued to depress the demand for tellers. 
C) were a complement to bank tellers, but over time have replaced them. 
D) had no effect on the demand for bank tellers.

Question 13

The change in a firm's total revenue that results from hiring an additional worker is measured by

Accepted Answer

A) the marginal product. 
B) the marginal revenue. 
C) the marginal revenue product. 
D) the average revenue product. 
A) the marginal product. 
B) the marginal revenue. 
C) the marginal revenue product. 
D) the average revenue product.

Question 14

The demand for labor is a derived demand, whereas the demand for capital is not.

Accepted Answer

A) True 
 B)False

Question 15

If two resources are complementary, an increase in the price of one will increase the demand for the other.

Accepted Answer

A) True 
 B)False

Question 16

An employer hiring in a competitive labor market should hire additional labor as long as

Accepted Answer

A) the MRP exceeds the wage rate. 
B) the wage rate is less than MP. 
C) average product exceeds MP. 
D) MC exceeds MR. 
A) the MRP exceeds the wage rate. 
B) the wage rate is less than MP. 
C) average product exceeds MP. 
D) MC exceeds MR.

Question 17

When economists say that the demand for labor is a derived demand, they mean that it is

Accepted Answer

A) dependent on government expenditures for public goods and services. 
B) related to the demand for the product or service labor is producing. 
C) based on the desire of businesses to exploit labor by paying below equilibrium wage rates. 
D) based on the assumption that workers are trying to maximize their money incomes. 
A) dependent on government expenditures for public goods and services. 
B) related to the demand for the product or service labor is producing. 
C) based on the desire of businesses to exploit labor by paying below equilibrium wage rates. 
D) based on the assumption that workers are trying to maximize their money incomes.

Question 18

An increase in the demand for HDTV sets leads to an increase in demand for LCD and LED TV screens.This situation arises because

Accepted Answer

A) LCD and LED screens minimize the costs of production. 
B) the supply of LCD and LED screens has decreased. 
C) the demand for LCD and LED screens is a derived demand. 
D) of foreign production of LCD and LED screens. 
A) LCD and LED screens minimize the costs of production. 
B) the supply of LCD and LED screens has decreased. 
C) the demand for LCD and LED screens is a derived demand. 
D) of foreign production of LCD and LED screens.

Question 19

The fact that monopoly and monopsony exist in resource markets means that

Accepted Answer

A) the marginal productivity theory of income distribution is valid. 
B) resource prices do not always measure contributions to output. 
C) the resulting income distribution is ethically correct. 
D) income shares do not exhaust the total output. 
A) the marginal productivity theory of income distribution is valid. 
B) resource prices do not always measure contributions to output. 
C) the resulting income distribution is ethically correct. 
D) income shares do not exhaust the total output.

Question 20

Which of the following statements is most accurate about the occupations projected to be the fastest growing in the U.S.in terms of percentage increases?

Accepted Answer

A) The majority are in engineering professions. 
B) The majority are in manufacturing industries. 
C) The majority are in health care related professions. 
D) The majority are in unskilled jobs. 
A) The majority are in engineering professions. 
B) The majority are in manufacturing industries. 
C) The majority are in health care related professions. 
D) The majority are in unskilled jobs.

Exam 16: The Demand for Resources

Other things being equal, the elasticity of demand for labor will be greater the

The marginal productivity theory of income distribution holds that all resources are paid according to their marginal contribution to society's output.

Other things being equal, a labor union will find it harder to obtain a wage increase for its members the

The labor demand curve of a firm that sells its product in an imperfectly competitive market

Resource pricing is important because

The marginal resource cost of labor for a firm refers to the

If MPx > MPy, a firm should hire more x and less y.

A change in a factor's price will have a greater effect on the quantity of the factor demanded the

The labor demand curve of a firm

The marginal revenue product of labor refers to the

A competitive employer is using labor in such an amount that labor's MRP is $10 and its wage rate is $8.This firm

(Last Word) When they were first introduced, ATMs

The change in a firm's total revenue that results from hiring an additional worker is measured by

The demand for labor is a derived demand, whereas the demand for capital is not.

If two resources are complementary, an increase in the price of one will increase the demand for the other.

An employer hiring in a competitive labor market should hire additional labor as long as

When economists say that the demand for labor is a derived demand, they mean that it is

An increase in the demand for HDTV sets leads to an increase in demand for LCD and LED TV screens.This situation arises because

The fact that monopoly and monopsony exist in resource markets means that

Which of the following statements is most accurate about the occupations projected to be the fastest growing in the U.S.in terms of percentage increases?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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