Question 1

If the demand for a consumer good decreases, the demand for resources required to make the good will

Accepted Answer

A)  increase. 
B)  remain the same, but the quantity demanded will increase. 
C)  decrease. 
D)  increase or decrease depending on whether the demand for the product is elastic or inelastic. 
A)  increase. 
B)  remain the same, but the quantity demanded will increase. 
C)  decrease. 
D)  increase or decrease depending on whether the demand for the product is elastic or inelastic.

Question 2

One way to invest in human capital is by

Accepted Answer

A)  increasing your education. 
B)  avoiding on-the-job training programs. 
C)  doing nothing; it is impossible to improve your human capital. Human capital is solely determined by the abilities that you are born with. 
D)  investing in physical capital. 
A)  increasing your education. 
B)  avoiding on-the-job training programs. 
C)  doing nothing; it is impossible to improve your human capital. Human capital is solely determined by the abilities that you are born with. 
D)  investing in physical capital.

Question 3

Which one of the following labor resources will likely have the most inelastic supply schedule in the short run?

Accepted Answer

A)  filling station attendants 
B)  sales clerks 
C)  construction laborers 
D)  dentists 
A)  filling station attendants 
B)  sales clerks 
C)  construction laborers 
D)  dentists

Question 4

Use the figure to answer the following question(s).
Figure 12-1
 
If Figure 12-1 indicated the short-run and long-run supply curves for a resource, which of the following would probably be the long-run supply curve of the resource?

Accepted Answer

A)  Q2 
B)  Q3 
C)  Sb 
D)  Sa 
A)  Q2 
B)  Q3 
C)  Sb 
D)  Sa

Question 5

Figure 12-3  
Refer to Figure 12-3. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium is at point A. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $20, then there will be an excess

Accepted Answer

A)  supply of 3,000 workers. 
B)  demand of 7,000 workers. 
C)  supply of 4,000 workers. 
D)  supply of 7,000 workers. 
A)  supply of 3,000 workers. 
B)  demand of 7,000 workers. 
C)  supply of 4,000 workers. 
D)  supply of 7,000 workers.

Question 6

Use the information given in the table below to answer the following question(s). Assume the firm hires labor competitively and sells its product in a competitive price-taker market at a price of $2 per unit.
Table 12-7
 
Refer to Table 12-7. If the market wage rate rose to $7 per day, how many workers should the firm employ if it wants to maximize profits?

Accepted Answer

A)  three 
B)  four 
C)  five 
D)  six 
A)  three 
B)  four 
C)  five 
D)  six

Question 7

Suppose land suitable for wheat production is highly inelastic. An increase in the demand for wheat bread will most likely

Accepted Answer

A)  cause the prices of bread and wheat to increase but not affect the incomes paid to owners of wheat-growing land. 
B)  shift the demand curve for bread to the right and the supply curve for wheat to the left. 
C)  raise the price of land suitable for wheat production. 
D)  depress the incomes of owners of wheat growing land. 
A)  cause the prices of bread and wheat to increase but not affect the incomes paid to owners of wheat-growing land. 
B)  shift the demand curve for bread to the right and the supply curve for wheat to the left. 
C)  raise the price of land suitable for wheat production. 
D)  depress the incomes of owners of wheat growing land.

Question 8

The marginal revenue product of a resource is equal to the value of marginal product when the product produced by the resource is sold in

Accepted Answer

A)  a competitive price-taker market. 
B)  a competitive price-searcher market. 
C)  an oligopolistic market. 
D)  a monopolistic industry. 
A)  a competitive price-taker market. 
B)  a competitive price-searcher market. 
C)  an oligopolistic market. 
D)  a monopolistic industry.

Question 9

A firm currently employs 80 units of labor and 50 units of capital equipment to produce 3,000 hamster cages. Given the current input levels utilized, the marginal product of labor is 40 and the marginal product of capital is 10. If we assume that labor costs $20 per unit and capital costs $10 per unit,

Accepted Answer

A)  the firm is using the appropriate mix of labor and capital to minimize its costs. 
B)  the firm could lower its costs for the same level of output by using more labor and less capital. 
C)  the firm could lower its costs for the same level of output by using more capital and less labor. 
D)  the current MRP of capital exceeds the current MRP of labor. 
A)  the firm is using the appropriate mix of labor and capital to minimize its costs. 
B)  the firm could lower its costs for the same level of output by using more labor and less capital. 
C)  the firm could lower its costs for the same level of output by using more capital and less labor. 
D)  the current MRP of capital exceeds the current MRP of labor.

Question 10

The labor supply curve reflects how

Accepted Answer

A)  workers' decisions about the labor-leisure tradeoff respond to a change in the wage. 
B)  workers' decisions about the opportunity cost of labor respond to a change in the quantity of labor supplied. 
C)  firms' decisions about the labor-leisure tradeoff respond to the quantity of labor demanded. 
D)  firms' decisions about how the quantity of labor they hire respond to changes in their opportunities to earn profits. 
A)  workers' decisions about the labor-leisure tradeoff respond to a change in the wage. 
B)  workers' decisions about the opportunity cost of labor respond to a change in the quantity of labor supplied. 
C)  firms' decisions about the labor-leisure tradeoff respond to the quantity of labor demanded. 
D)  firms' decisions about how the quantity of labor they hire respond to changes in their opportunities to earn profits.

Question 11

Generally, the supply of a resource in the short run will be

Accepted Answer

A)  more elastic than in the long run. 
B)  less elastic than in the long run. 
C)  equally elastic as the supply of the resource in the long run. 
D)  directly related to the elasticity of demand for the product that the resource helps produce. 
A)  more elastic than in the long run. 
B)  less elastic than in the long run. 
C)  equally elastic as the supply of the resource in the long run. 
D)  directly related to the elasticity of demand for the product that the resource helps produce.

Question 12

The marginal revenue product of a resource is best described as the

Accepted Answer

A)  selling price of the last unit of output produced. 
B)  increment of total cost resulting from the use of an additional unit of the resource. 
C)  marginal product of the resource divided by the unit price of the good produced. 
D)  change in total revenue resulting from employing an additional unit of the resource. 
A)  selling price of the last unit of output produced. 
B)  increment of total cost resulting from the use of an additional unit of the resource. 
C)  marginal product of the resource divided by the unit price of the good produced. 
D)  change in total revenue resulting from employing an additional unit of the resource.

Question 13

An increase in the demand for a resource

Accepted Answer

A)  will cause the price of that resource to fall. 
B)  may be the result of a decrease in the demand for products utilizing this resource. 
C)  will cause the price of the resource to fall by a smaller amount in the short run than in the long run. 
D)  will increase the price of the resource and thereby increase the incentive of potential suppliers to provide the resource in the future. 
A)  will cause the price of that resource to fall. 
B)  may be the result of a decrease in the demand for products utilizing this resource. 
C)  will cause the price of the resource to fall by a smaller amount in the short run than in the long run. 
D)  will increase the price of the resource and thereby increase the incentive of potential suppliers to provide the resource in the future.

Question 14

A decrease in resource prices will increase the incentive of

Accepted Answer

A)  users to purchase the resource. 
B)  suppliers to provide more of the resource. 
C)  firms to find and develop substitutes for the resource. 
D)  consumers to look for alternatives that do not contain the resource. 
A)  users to purchase the resource. 
B)  suppliers to provide more of the resource. 
C)  firms to find and develop substitutes for the resource. 
D)  consumers to look for alternatives that do not contain the resource.

Question 15

If steel workers obtain a substantial wage increase, employment in the steel industry will be likely to fall the most if

Accepted Answer

A)  the demand curve for steel is highly inelastic. 
B)  the demand curve for steel is highly elastic. 
C)  the demand curve for steel workers is highly inelastic. 
D)  there are no good substitutes for steel. 
A)  the demand curve for steel is highly inelastic. 
B)  the demand curve for steel is highly elastic. 
C)  the demand curve for steel workers is highly inelastic. 
D)  there are no good substitutes for steel.

Question 16

Physical and human capital investments are

Accepted Answer

A)  different in that the opportunity for economic profit is present for physical capital but not for human capital investments. 
B)  different in that human capital decisions do not involve future income considerations, while physical capital investments do. 
C)  similar in that nonmonetary considerations play an equally important role in both. 
D)  similar in that both involve forgoing current income (and consumption) in an effort to achieve higher future income (and consumption). 
A)  different in that the opportunity for economic profit is present for physical capital but not for human capital investments. 
B)  different in that human capital decisions do not involve future income considerations, while physical capital investments do. 
C)  similar in that nonmonetary considerations play an equally important role in both. 
D)  similar in that both involve forgoing current income (and consumption) in an effort to achieve higher future income (and consumption).

Question 17

Which of the following is most likely to result from an increase in the demand for computer technicians?

Accepted Answer

A)  an increase in the wages of computer technicians, which will attract additional technicians in the long run 
B)  an increase in the employment of computer technicians, which will depress current wage rates but eventually lead to higher wage rates for technicians 
C)  a decline in the number of persons preparing themselves for careers as computer technicians 
D)  lower wage rates and a shortage of computer technicians 
A)  an increase in the wages of computer technicians, which will attract additional technicians in the long run 
B)  an increase in the employment of computer technicians, which will depress current wage rates but eventually lead to higher wage rates for technicians 
C)  a decline in the number of persons preparing themselves for careers as computer technicians 
D)  lower wage rates and a shortage of computer technicians

Question 18

The derived demand curve for a resource is downward sloping because

Accepted Answer

A)  the demand for products that utilize the resource is directly related to the price of the resource. 
B)  the marginal productivity of resources will decline as their price increases. 
C)  as the price of a resource rises, other resources will be less desirable than the higher priced resource. 
D)  other resources will be substituted for a resource that increases in price. 
A)  the demand for products that utilize the resource is directly related to the price of the resource. 
B)  the marginal productivity of resources will decline as their price increases. 
C)  as the price of a resource rises, other resources will be less desirable than the higher priced resource. 
D)  other resources will be substituted for a resource that increases in price.

Question 19

If the demand for workers with doctorate degrees in economics increases, we would expect

Accepted Answer

A)  the wages of economists to increase in the short run and the number of economists employed to increase in the long run. 
B)  the supply of economists to increase in the short run and their wages to rise in the long run. 
C)  a rapid increase in the supply of economists, causing wages to remain constant. 
D)  the wages of economists to decrease in the short run and the number of economists employed to increase in the long run. 
A)  the wages of economists to increase in the short run and the number of economists employed to increase in the long run. 
B)  the supply of economists to increase in the short run and their wages to rise in the long run. 
C)  a rapid increase in the supply of economists, causing wages to remain constant. 
D)  the wages of economists to decrease in the short run and the number of economists employed to increase in the long run.

Question 20

Economists refer to expenditures on training, education, and skill development designed to increase the productivity of an individual as

Accepted Answer

A)  overhead expenditures. 
B)  investments in human capital. 
C)  non-exhaustive expenditures. 
D)  social capital. 
A)  overhead expenditures. 
B)  investments in human capital. 
C)  non-exhaustive expenditures. 
D)  social capital.

If the demand for a consumer good decreases, the demand for resources required to make the good will

One way to invest in human capital is by

Which one of the following labor resources will likely have the most inelastic supply schedule in the short run?

Use the figure to answer the following question(s). Figure 12-1 If Figure 12-1 indicated the short-run and long-run supply curves for a resource, which of the following would probably be the long-run supply curve of the resource?

Figure 12-3 Refer to Figure 12-3. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium is at point A. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $20, then there will be an excess

Suppose land suitable for wheat production is highly inelastic. An increase in the demand for wheat bread will most likely

The marginal revenue product of a resource is equal to the value of marginal product when the product produced by the resource is sold in

The labor supply curve reflects how

Generally, the supply of a resource in the short run will be

The marginal revenue product of a resource is best described as the

An increase in the demand for a resource

A decrease in resource prices will increase the incentive of

If steel workers obtain a substantial wage increase, employment in the steel industry will be likely to fall the most if

Physical and human capital investments are

Which of the following is most likely to result from an increase in the demand for computer technicians?

The derived demand curve for a resource is downward sloping because

If the demand for workers with doctorate degrees in economics increases, we would expect

Economists refer to expenditures on training, education, and skill development designed to increase the productivity of an individual as

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

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Exam 12: The Supply of and Demand for Productive Resources

If the demand for a consumer good decreases, the demand for resources required to make the good will

One way to invest in human capital is by

Which one of the following labor resources will likely have the most inelastic supply schedule in the short run?

Use the figure to answer the following question(s). Figure 12-1 If Figure 12-1 indicated the short-run and long-run supply curves for a resource, which of the following would probably be the long-run supply curve of the resource?

Figure 12-3 Refer to Figure 12-3. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium is at point A. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $20, then there will be an excess

Suppose land suitable for wheat production is highly inelastic. An increase in the demand for wheat bread will most likely

The marginal revenue product of a resource is equal to the value of marginal product when the product produced by the resource is sold in

The labor supply curve reflects how

Generally, the supply of a resource in the short run will be

The marginal revenue product of a resource is best described as the

An increase in the demand for a resource

A decrease in resource prices will increase the incentive of

If steel workers obtain a substantial wage increase, employment in the steel industry will be likely to fall the most if

Physical and human capital investments are

Which of the following is most likely to result from an increase in the demand for computer technicians?

The derived demand curve for a resource is downward sloping because

If the demand for workers with doctorate degrees in economics increases, we would expect

Economists refer to expenditures on training, education, and skill development designed to increase the productivity of an individual as

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters