Question 1

A firm's demand curve for labor

Accepted Answer

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

Question 2

Which of the following will not cause a shift in the demand for resource X?

Accepted Answer

A) a decline in the price of resource X 
B) an increase in the price of the product that resource X is producing 
C) a decrease in the price of substitute resource Y 
D) an increase in the productivity of resource X 
A) a decline in the price of resource X 
B) an increase in the price of the product that resource X is producing 
C) a decrease in the price of substitute resource Y 
D) an increase in the productivity of resource X

Question 3

Hiring the profit-maximizing combination of resources ensures that production costs will be minimized.

Accepted Answer

A) True 
 B)False

Question 4

A profit-maximizing firm will use additional units of resources for production until

Accepted Answer

A) total, average, and marginal cost are equal. 
B) total, average, and marginal revenue are equal. 
C) the marginal revenue product equals the marginal resource cost. 
D) the marginal revenue product is greater than the marginal resource cost. 
A) total, average, and marginal cost are equal. 
B) total, average, and marginal revenue are equal. 
C) the marginal revenue product equals the marginal resource cost. 
D) the marginal revenue product is greater than the marginal resource cost.

Question 5

(Last Word) The rapid spread of ATMs

Accepted Answer

A) dramatically reduced employment of bank tellers, and demand remains low because ATMs serve the same functions as bank tellers. 
B) has resulted in the closure of many bank branches and led to a long-term decline in employment of bank tellers. 
C) reduced the demand for bank tellers initially, but eventually tellers took on tasks that ATMs are not suited to handle. 
D) has had no discernible impact on the demand for bank tellers. 
A) dramatically reduced employment of bank tellers, and demand remains low because ATMs serve the same functions as bank tellers. 
B) has resulted in the closure of many bank branches and led to a long-term decline in employment of bank tellers. 
C) reduced the demand for bank tellers initially, but eventually tellers took on tasks that ATMs are not suited to handle. 
D) has had no discernible impact on the demand for bank tellers.

Question 6

Which type of occupation is expected by the U.S.Bureau of Labor Statistics to be the fastest growing from 2014 to 2024 ?

Accepted Answer

A) manufacturing 
B) service 
C) construction 
D) mining 
A) manufacturing 
B) service 
C) construction 
D) mining

Question 7

The U.S.Bureau of Labor Statistics expects demand for labor in the textile and apparel sector to decline, largely because of

Accepted Answer

A) decreasing demand for textiles and apparel. 
B) falling wages in this sector. 
C) import competition in the sector. 
D) rising wages for textile and apparel workers. 
A) decreasing demand for textiles and apparel. 
B) falling wages in this sector. 
C) import competition in the sector. 
D) rising wages for textile and apparel workers.

Question 8

If a firm pays labor $5 and receives an MPL of 10, while paying capital $100 and receiving an MPC of 100, to lower production costs it should hire more labor and less capital.

Accepted Answer

A) True 
 B)False

Question 9

The introduction of automatic elevator equipment allowed firms to handle the movement of people in a multistory building at less cost, thus decreasing the demand for elevator operators.The best explanation for this change is that the

Accepted Answer

A) marginal product of elevator operators was equal to its price. 
B) marginal product of automatic elevator equipment was equal to its price. 
C) marginal product of automatic elevator equipment divided by its price was greater than that for elevator operators. 
D) marginal product of elevator operators divided by its price was greater than that for automatic elevator equipment.Blooms: Understand 
A) marginal product of elevator operators was equal to its price. 
B) marginal product of automatic elevator equipment was equal to its price. 
C) marginal product of automatic elevator equipment divided by its price was greater than that for elevator operators. 
D) marginal product of elevator operators divided by its price was greater than that for automatic elevator equipment.Blooms: Understand

Question 10

Marginal revenue product (MRP) is the change in total product (total output) associated with hiring an additional unit of labor.

Accepted Answer

A) True 
 B)False

Question 11

The marginal revenue product schedule is

Accepted Answer

A) the same whether the firm is selling in a purely competitive or imperfectly competitive market. 
B) the firm's resource demand schedule. 
C) the firm's resource supply schedule. 
D) upsloping. 
A) the same whether the firm is selling in a purely competitive or imperfectly competitive market. 
B) the firm's resource demand schedule. 
C) the firm's resource supply schedule. 
D) upsloping.

Question 12

A profit-maximizing firm should hire an input as long as the

Accepted Answer

A) firm can increase its total revenue. 
B) price of the input doesn't exceed the price of the other inputs used in the firm's production. 
C) marginal revenue product of the input is at least as much as the cost of hiring the input. 
D) marginal revenue product of the input is greater than the marginal revenue product of other inputs the firm is using. 
A) firm can increase its total revenue. 
B) price of the input doesn't exceed the price of the other inputs used in the firm's production. 
C) marginal revenue product of the input is at least as much as the cost of hiring the input. 
D) marginal revenue product of the input is greater than the marginal revenue product of other inputs the firm is using.

Question 13

The marginal revenue product of labor and the marginal resource cost of labor are both measured in the same units, that is, in dollars per unit of labor.

Accepted Answer

A) True 
 B)False

Question 14

A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired.The farmer's product sells for $3 per unit, and the wage rate is $13 per worker.The marginal product of the second worker is

Accepted Answer

A) 24. 
B) 8. 
C) 5. 
D) 1. 
A) 24. 
B) 8. 
C) 5. 
D) 1.

Question 15

Other things being equal, how would the market for tablet computers be affected by a large increase in productivity in the tablet-computer industry?

Accepted Answer

A) a decrease in price and a leftward movement along the supply curve 
B) a decrease in price and a rightward movement along the demand curve 
C) a decrease in price and a rightward movement along the supply curve 
D) an increase in price and a rightward movement along the demand curve 
A) a decrease in price and a leftward movement along the supply curve 
B) a decrease in price and a rightward movement along the demand curve 
C) a decrease in price and a rightward movement along the supply curve 
D) an increase in price and a rightward movement along the demand curve

Question 16

For a firm selling its product in a purely competitive market, the marginal revenue product of labor can be found by

Accepted Answer

A) adding marginal product to total product as one more unit of labor is employed. 
B) adding marginal revenue to total product as one more unit of labor is employed. 
C) multiplying marginal product by product price. 
D) dividing marginal product by product price. 
A) adding marginal product to total product as one more unit of labor is employed. 
B) adding marginal revenue to total product as one more unit of labor is employed. 
C) multiplying marginal product by product price. 
D) dividing marginal product by product price.

Question 17

Assume the price of capital doubles and, as a result, firms make no change in the relative quantities of capital and labor they employ.This implies that

Accepted Answer

A) labor is not readily substitutable for capital. 
B) the law of diminishing returns is not applicable. 
C) the firms are producing an inferior good. 
D) the demand for capital is highly price elastic. 
A) labor is not readily substitutable for capital. 
B) the law of diminishing returns is not applicable. 
C) the firms are producing an inferior good. 
D) the demand for capital is highly price elastic.

Question 18

A profit-maximizing firm will employ labor up to the point where the

Accepted Answer

A) MRP of labor = MRC of labor. 
B) MP of labor = MRC of labor. 
C) MC = MRP. 
D) MP = MC. 
A) MRP of labor = MRC of labor. 
B) MP of labor = MRC of labor. 
C) MC = MRP. 
D) MP = MC.

Question 19

A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits.It is currently operating in the elastic range of its MRP curve.If the wage rate increases, its total spending on wages at the new equilibrium will

Accepted Answer

A) be larger. 
B) be smaller. 
C) be unchanged. 
D) change in an undetermined direction. 
A) be larger. 
B) be smaller. 
C) be unchanged. 
D) change in an undetermined direction.

Question 20

Which of the following is equivalent to the costs that firms incur in acquiring economic resources?

Accepted Answer

A) revenues from the product 
B) income of the resources 
C) money flowing from the resources 
D) profits from the resources employed 
A) revenues from the product 
B) income of the resources 
C) money flowing from the resources 
D) profits from the resources employed

Exam 16: The Demand for Resources

A firm's demand curve for labor

Which of the following will not cause a shift in the demand for resource X?

Hiring the profit-maximizing combination of resources ensures that production costs will be minimized.

A profit-maximizing firm will use additional units of resources for production until

(Last Word) The rapid spread of ATMs

Which type of occupation is expected by the U.S.Bureau of Labor Statistics to be the fastest growing from 2014 to 2024 ?

The U.S.Bureau of Labor Statistics expects demand for labor in the textile and apparel sector to decline, largely because of

If a firm pays labor $5 and receives an MPL of 10, while paying capital $100 and receiving an MPC of 100, to lower production costs it should hire more labor and less capital.

The introduction of automatic elevator equipment allowed firms to handle the movement of people in a multistory building at less cost, thus decreasing the demand for elevator operators.The best explanation for this change is that the

Marginal revenue product (MRP) is the change in total product (total output) associated with hiring an additional unit of labor.

The marginal revenue product schedule is

A profit-maximizing firm should hire an input as long as the

The marginal revenue product of labor and the marginal resource cost of labor are both measured in the same units, that is, in dollars per unit of labor.

Other things being equal, how would the market for tablet computers be affected by a large increase in productivity in the tablet-computer industry?

For a firm selling its product in a purely competitive market, the marginal revenue product of labor can be found by

Assume the price of capital doubles and, as a result, firms make no change in the relative quantities of capital and labor they employ.This implies that

A profit-maximizing firm will employ labor up to the point where the

A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits.It is currently operating in the elastic range of its MRP curve.If the wage rate increases, its total spending on wages at the new equilibrium will

Which of the following is equivalent to the costs that firms incur in acquiring economic resources?

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

Filters