Exam 18: The Market For the Factors of Production.

Suppose the government designates certain areas within a community to be "wetlands," making it illegal to build on the land.What happens to land not classified as "wetlands" within the community? (i)The price of non-wetland land will rise. (ii)The marginal product of non-wetland land will fall. (iii)The marginal product of non-wetland land will rise.

As a result of severe flooding,a farmer loses half of his productive farmland.He should expect to see the marginal productivity of his remaining land

Approximately how much of the income in the United States is earned by workers in the form of wages and fringe benefits?

Suppose that the market for labor is initially in equilibrium.If the firm employs labor-saving technology,the equilibrium wage

Most of the total income earned in the U.S.economy is ultimately paid to

Scenario 18-1 Harry owns a snow-removal business. He hires workers to shovel driveways for him during the winter. The first worker he hires can shovel twelve driveways in one day. When Harry hires two workers, they can shovel a total of 22 driveways in one day. When Harry hires a third worker, he shovels an additional eight driveways in one day. -Refer to Scenario 18-1.What is the total productivity of three workers?

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

Consider the labor market for short-order cooks.A shortage in the availability of frying pans will cause

The distribution of immigrant workers in the United States is

Suppose that the labor market for life guards is initially in equilibrium.Then the marginal productivity of life guards increases.What happens to the equilibrium wage and quantity of life guards?

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Suppose that a toxic waste spill renders half of the land in New Jersey uninhabitable.Assuming that land and labor are complements in the production function,what would happen to the wages earned by workers and rents earned by landowners?

Describe the process by which the market for capital and the market for land reach equilibrium.As part of your description,elaborate on the role of the stock of the resource versus the flow of services from the resource.

If the wage exceeds the value of the marginal product of labor,then hiring another worker

Table 18-6 -Refer to Table 18-6.The fact that the production function exhibits diminishing marginal productivity implies that

Figure 18-10 -Refer to Figure 18-10.Which of the following would shift of the labor demand curve from D₁ to D₂?

Scenario 18-8 Suppose the following events occur in the market for university economics professors. Event 1: A recession in the U.S. economy lowers the opportunity cost of going to graduate school in economics to become a university economics professor. Event 2: A decreasing number of students in U.S. primary and secondary schools decreases the number of students entering college, decreasing the output price of university economics professors' services. -Refer to Scenario 18-8.As a result of these two events,holding all else constant,the equilibrium wages of university economics professors will

Table 18-10 Consider the following daily production data for Caroline's Cookies, Inc. Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day. -Refer to Table 18-10.The marginal product of labor begins to diminish with the addition of which worker?

Suppose an influenza pandemic were to significantly decrease the population of a country.We would predict a decrease in the marginal product of land in that country.

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