Question 1

A decline in the price of resource A will

Accepted Answer

A) increase the demand for complementary resource B. 
B) shift the demand curve for A to the left. 
C) shift the demand curve for A to the right. 
D) reduce the demand for complementary resource B. 
A) increase the demand for complementary resource B. 
B) shift the demand curve for A to the left. 
C) shift the demand curve for A to the right. 
D) reduce the demand for complementary resource B.

Question 2

Marginal revenue product describes the

Accepted Answer

A) output produced by the last unit of labor employed. 
B) revenue received for the last unit of output produced. 
C) price a consumer paid for the last unit of output produced. 
D) revenue received for the additional output produced by the last unit of labor employed. 
A) output produced by the last unit of labor employed. 
B) revenue received for the last unit of output produced. 
C) price a consumer paid for the last unit of output produced. 
D) revenue received for the additional output produced by the last unit of labor employed.

Question 3

In the market for superstars,

Accepted Answer

A) earnings reflect pricing power rather than marginal revenue product. 
B) small differences in talent get magnified into huge differences in pay. 
C) entry and exit rarely occur. 
D) product demand is typically highly elastic. 
A) earnings reflect pricing power rather than marginal revenue product. 
B) small differences in talent get magnified into huge differences in pay. 
C) entry and exit rarely occur. 
D) product demand is typically highly elastic.

Question 4

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 5

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 6

According to the marginal productivity theory of resource demand, the labor-demand schedule for a producer selling in a purely competitive market is

Accepted Answer

A) the same as the marginal resource cost schedule. 
B) the same as the marginal productivity schedule. 
C) the same as the marginal revenue product schedule. 
D) independent of the value of the product being produced. 
A) the same as the marginal resource cost schedule. 
B) the same as the marginal productivity schedule. 
C) the same as the marginal revenue product schedule. 
D) independent of the value of the product being produced.

Question 7

Resource X has many close substitutes, whereas resource Y has no close substitutes. Other things equal, we would expect

Accepted Answer

A) the demand for resource Y to be more elastic than the demand for resource X. 
B) resources X and Y to be close substitutes. 
C) resource X to be more expensive than resource Y. 
D) the demand for resource X to be more elastic than the demand for resource Y. 
A) the demand for resource Y to be more elastic than the demand for resource X. 
B) resources X and Y to be close substitutes. 
C) resource X to be more expensive than resource Y. 
D) the demand for resource X to be more elastic than the demand for resource Y.

Question 8

In percentage terms, which of the following occupations is expected by the U.S. Bureau of Labor Statistics to be the fastest growing from 2016 to 2026?

Accepted Answer

A) solar photovoltaic installers 
B) statisticians 
C) nurse practitioners 
D) postal service sorters and processors 
A) solar photovoltaic installers 
B) statisticians 
C) nurse practitioners 
D) postal service sorters and processors

Question 9

The general rule for hiring any input (say, labor)in the profit-maximizing amount is MRC = MRP. This rule takes the special form W = MRP (where W is the wage rate)when the

Accepted Answer

A) labor supply curve is upsloping. 
B) supply of labor is inelastic. 
C) firm is hiring labor under purely competitive conditions. 
D) firm is hiring labor under imperfectly competitive conditions. 
A) labor supply curve is upsloping. 
B) supply of labor is inelastic. 
C) firm is hiring labor under purely competitive conditions. 
D) firm is hiring labor under imperfectly competitive conditions.

Question 10

The rising demand for health-care industry workers is due to the following factors, except

Accepted Answer

A) aging of the U.S. population. 
B) rising income levels in the U.S. 
C) the continued presence of health insurance for U.S. consumers. 
D) decreasing prices of labor in the health-care industry. 
A) aging of the U.S. population. 
B) rising income levels in the U.S. 
C) the continued presence of health insurance for U.S. consumers. 
D) decreasing prices of labor in the health-care industry.

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

The demand for labor would most likely become less inelastic as a result of

Accepted Answer

A) a decrease in the elasticity of the demand for the product that the labor produces. 
B) a decrease in the time for employers to make technological changes or purchase new equipment. 
C) a decrease in the proportion of labor costs to total costs. 
D) an increase in the proportion of labor cost to total costs. 
A) a decrease in the elasticity of the demand for the product that the labor produces. 
B) a decrease in the time for employers to make technological changes or purchase new equipment. 
C) a decrease in the proportion of labor costs to total costs. 
D) an increase in the proportion of labor cost to total costs.

Question 13

The table gives marginal product data for resources a and b. The output of these independent resources sells in a purely competitive market at $1 per unit. Assuming the prices of resources a and b are $5 and $8 respectively, what is the least costly combination of resources for the firm to employ in producing 192 units of output?

Accepted Answer

A) 2 of a and 6 of b 
B) 6 of a and 2 of b 
C) 4 of a and 3 of b 
D) 3 of a and 4 of b 
A) 2 of a and 6 of b 
B) 6 of a and 2 of b 
C) 4 of a and 3 of b 
D) 3 of a and 4 of b

Question 14

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 15

Use the graph to answer the question about the labor resource market faced by producers of good X. What will shift D ₂ to D ₁?

Accepted Answer

A) A decrease in the price of a substitute input (if the output effect > substitution effect) 
B) An increase in the price of a substitute input (if the substitution effect > output effect) 
C) An increase in the price of a substitute input (if the output effect > substitution effect) 
D) A decrease in the price of a complementary resource 
A) A decrease in the price of a substitute input (if the output effect > substitution effect) 
B) An increase in the price of a substitute input (if the substitution effect > output effect) 
C) An increase in the price of a substitute input (if the output effect > substitution effect) 
D) A decrease in the price of a complementary resource

Question 16

The more elastic the demand for a product, the less elastic will be the demand for the resources employed in producing it.

Accepted Answer

A) True 
 B)False

Question 17

Increased resource productivity will, ceteris paribus, increase a firm's demand for an input.

Accepted Answer

A) True 
 B)False

Question 18

Marginal resource cost is

Accepted Answer

A) the increase in total resource cost associated with the production of one more unit of output. 
B) the increase in total resource cost associated with the hire of one more unit of the resource. 
C) total resource cost divided by the number of inputs employed. 
D) the change in total revenue associated with the employment of one more unit of the resource. 
A) the increase in total resource cost associated with the production of one more unit of output. 
B) the increase in total resource cost associated with the hire of one more unit of the resource. 
C) total resource cost divided by the number of inputs employed. 
D) the change in total revenue associated with the employment of one more unit of the resource.

Question 19

Refer to the given table. Which of the following best represents the labor demand schedule for this firm?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 20

A competitive employer will hire inputs up to the point where the

Accepted Answer

A) marginal product of the input reaches a maximum. 
B) price of the input equals the price of the output. 
C) price of the input equals the marginal product of the input. 
D) price of the input equals the marginal revenue product of the input. 
A) marginal product of the input reaches a maximum. 
B) price of the input equals the price of the output. 
C) price of the input equals the marginal product of the input. 
D) price of the input equals the marginal revenue product of the input.

Exam 16: The Demand for Resources

A decline in the price of resource A will

Marginal revenue product describes the

In the market for superstars,

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

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

According to the marginal productivity theory of resource demand, the labor-demand schedule for a producer selling in a purely competitive market is

Resource X has many close substitutes, whereas resource Y has no close substitutes. Other things equal, we would expect

In percentage terms, which of the following occupations is expected by the U.S. Bureau of Labor Statistics to be the fastest growing from 2016 to 2026?

The general rule for hiring any input (say, labor)in the profit-maximizing amount is MRC = MRP. This rule takes the special form W = MRP (where W is the wage rate)when the

The rising demand for health-care industry workers is due to the following factors, except

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

The demand for labor would most likely become less inelastic as a result of

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

Use the graph to answer the question about the labor resource market faced by producers of good X. What will shift D ₂ to D ₁?

The more elastic the demand for a product, the less elastic will be the demand for the resources employed in producing it.

Increased resource productivity will, ceteris paribus, increase a firm's demand for an input.

Marginal resource cost is

Refer to the given table. Which of the following best represents the labor demand schedule for this firm?

A competitive employer will hire inputs up to the point where the

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, 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

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters