Question 1

If the price of the firm's output increases,the demand for labor curve

Accepted Answer

A)  shifts rightward. 
B)  shifts leftward. 
C)  remains constant. 
D)  could shift rightward, leftward, or remain constant. 
E)  might shift leftward or rightward depending on whether the demand for the firm's product is elastic or inelastic. 
A)  shifts rightward. 
B)  shifts leftward. 
C)  remains constant. 
D)  could shift rightward, leftward, or remain constant. 
E)  might shift leftward or rightward depending on whether the demand for the firm's product is elastic or inelastic. A

Question 2

Unions ________ free trade and ________ a higher minimum wage.

Accepted Answer

A)  favor; favor 
B)  are neutral toward; oppose 
C)  favor; oppose 
D)  oppose; favor 
E)  oppose; oppose 
A)  favor; favor 
B)  are neutral toward; oppose 
C)  favor; oppose 
D)  oppose; favor 
E)  oppose; oppose D

Question 3

Suppose in Philadelphia the quantity of economists demanded is less than the quantity supplied by 2,000 economists.As a result,

Accepted Answer

A)  there is a shortage of economists in Philadelphia. 
B)  salaries for economists fall. 
C)  there is equilibrium in this market. 
D)  the labor supply curve for economists in Philadelphia is vertical. 
E)  the labor demand curve for economists in Philadelphia shifts rightward. 
A)  there is a shortage of economists in Philadelphia. 
B)  salaries for economists fall. 
C)  there is equilibrium in this market. 
D)  the labor supply curve for economists in Philadelphia is vertical. 
E)  the labor demand curve for economists in Philadelphia shifts rightward. B

Question 4

If the wage rate increases,then

Accepted Answer

A)  the quantity of labor supplied definitely decreases. 
B)  there is a movement upward along the supply of labor curve. 
C)  the supply of labor curve shifts rightward. 
D)  the supply of labor curve shifts left ward. 
E)  the quantity of labor supplied definitely increases. 
A)  the quantity of labor supplied definitely decreases. 
B)  there is a movement upward along the supply of labor curve. 
C)  the supply of labor curve shifts rightward. 
D)  the supply of labor curve shifts left ward. 
E)  the quantity of labor supplied definitely increases.

Question 5

A natural resource is renewable if it

Accepted Answer

A)  never has to rest. 
B)  can be used repeatedly. 
C)  cannot be replaced once it has been used. 
D)  is available at a price of zero. 
E)  has a perfectly elastic supply. 
A)  never has to rest. 
B)  can be used repeatedly. 
C)  cannot be replaced once it has been used. 
D)  is available at a price of zero. 
E)  has a perfectly elastic supply.

Question 6

A profit-maximizing firm hires labor up to the point where

Accepted Answer

A)  price of the product equals the value of marginal product. 
B)  price of the product equals the wage rate. 
C)  the wage rate multiplied by the quantity of labor equals the marginal product. 
D)  the wage rate equals the value of marginal product. 
E)  marginal revenue equals the wage rate. 
A)  price of the product equals the value of marginal product. 
B)  price of the product equals the wage rate. 
C)  the wage rate multiplied by the quantity of labor equals the marginal product. 
D)  the wage rate equals the value of marginal product. 
E)  marginal revenue equals the wage rate.

Question 7

If the wage rate is above the equilibrium wage rate,the quantity of labor demanded is ________ the quantity of labor supplied.

Accepted Answer

A)  greater than 
B)  less than 
C)  equal to 
D)  the negative of 
E)  not comparable to 
A)  greater than 
B)  less than 
C)  equal to 
D)  the negative of 
E)  not comparable to

Question 8

According to the Hotelling Principle,the price of an nonrenewable resource is expected to

Accepted Answer

A)  fall slowly over time. 
B)  fall at a rate equal to the interest rate. 
C)  fluctuate randomly. 
D)  rise at a rate equal to the interest rate. 
E)  remain constant over time. 
A)  fall slowly over time. 
B)  fall at a rate equal to the interest rate. 
C)  fluctuate randomly. 
D)  rise at a rate equal to the interest rate. 
E)  remain constant over time.

Question 9

If the price of capital rises,in the long run the demand for labor

Accepted Answer

A)  definitely increases. 
B)  definitely decreases. 
C)  definitely is unaffected. 
D)  could increase or decrease, depending on the change in the scale of production. 
E)  changes only if the supply of labor changes. 
A)  definitely increases. 
B)  definitely decreases. 
C)  definitely is unaffected. 
D)  could increase or decrease, depending on the change in the scale of production. 
E)  changes only if the supply of labor changes.

Question 10

The Small Bookshop hires teenagers who love books.How does each of the following changes affect the supply and demand for workers for the Small Bookshop?
a.The Big Bookshop,a chain bookstore down the street,offers a higher wage rate.
b.More people buy books from Amazon.com.
c.People watch more television and read fewer books.
d.More older people who love to read move into the area where the Small Bookshop is located.

Accepted Answer

a.The supply of workers for Small Booksh

Question 11

Suppose the Miami Dolphins are considering adding another backup quarterback to their roster.If the salary the Dolphins would have to pay equals $1,000,000 and the value of marginal product of the new quarterback equals $1,200,000,to maximize their profit the Dolphins should

Accepted Answer

A)  add the new quarterback. 
B)  add two new quarterbacks. 
C)  not add the new quarterback. 
D)  not add the new quarterback and, in fact, get rid of at least one other backup quarterback. 
E)  Not enough information is given to determine if the Dolphins should hire the quarterback. 
A)  add the new quarterback. 
B)  add two new quarterbacks. 
C)  not add the new quarterback. 
D)  not add the new quarterback and, in fact, get rid of at least one other backup quarterback. 
E)  Not enough information is given to determine if the Dolphins should hire the quarterback.

Question 12

As the price of land rises,the quantity supplied

Accepted Answer

A)  increases. 
B)  decreases. 
C)  at first increases and then decreases. 
D)  stays the same. 
E)  at first decreases and then increases. 
A)  increases. 
B)  decreases. 
C)  at first increases and then decreases. 
D)  stays the same. 
E)  at first decreases and then increases.

Question 13

The wage paid to labor is

Accepted Answer

A)  a factor output. 
B)  a factor price. 
C)  a factor input. 
D)  an input of the workforce. 
E)  part of the firm's normal profit. 
A)  a factor output. 
B)  a factor price. 
C)  a factor input. 
D)  an input of the workforce. 
E)  part of the firm's normal profit.

Question 14

-The table above shows the total product schedule for Shines Car Wash.The market for car washes is perfectly competitive and car washes sell for $5 each.The labor market is competitive and the wage rate is $50 per day.What is the value of marginal product for each worker? How many workers does the firm hire to maximize profit?

Accepted Answer

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Question 15

Why does an increase in the minimum wage increase the demand for union labor?

Accepted Answer

An increase in the minimum wage raises t

Question 16

Which of the following methods is used by unions to increase the demand for the labor of its members?

Accepted Answer

A)  Decrease the marginal product of union members 
B)  Support minimum wage laws 
C)  Support free trade 
D)  Support laws that increase immigration into the country 
E)  Decrease demand for the good produced 
A)  Decrease the marginal product of union members 
B)  Support minimum wage laws 
C)  Support free trade 
D)  Support laws that increase immigration into the country 
E)  Decrease demand for the good produced

Question 17

Which of the following is a correct statement of the relationship between advances in technology and the demand for labor?

Accepted Answer

A)  The demand decreases for some types of labor and increases for other types of labor. 
B)  The demand for labor always decreases when technology advances. 
C)  The demand for labor always increases when technology advances. 
D)  Technology advances when the demand for labor advances. 
E)  None of the above answers is correct. 
A)  The demand decreases for some types of labor and increases for other types of labor. 
B)  The demand for labor always decreases when technology advances. 
C)  The demand for labor always increases when technology advances. 
D)  Technology advances when the demand for labor advances. 
E)  None of the above answers is correct.

Question 18

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $45.Which of the following is correct?

Accepted Answer

A)  The firm is employing the profit-maximizing quantity of labor. 
B)  Too much labor is currently employed and the firm will lay off some workers. 
C)  Too few workers are currently employed and the firm will hire more workers. 
D)  The firm should shut down and produce nothing. 
E)  More information about the price of the product is needed to determine if the firm is hiring the profit-maximizing amount of labor. 
A)  The firm is employing the profit-maximizing quantity of labor. 
B)  Too much labor is currently employed and the firm will lay off some workers. 
C)  Too few workers are currently employed and the firm will hire more workers. 
D)  The firm should shut down and produce nothing. 
E)  More information about the price of the product is needed to determine if the firm is hiring the profit-maximizing amount of labor.

Question 19

The equilibrium quantity of capital is

Accepted Answer

A)  determined by only the supply of capital because the supply is perfectly inelastic. 
B)  determined by only the supply of capital because the supply is perfectly elastic. 
C)  expected to increase at the same rate as the interest rate. 
D)  determined by the supply of capital and the demand for capital. 
E)  the only factor of production whose quantity is not determined in a market. 
A)  determined by only the supply of capital because the supply is perfectly inelastic. 
B)  determined by only the supply of capital because the supply is perfectly elastic. 
C)  expected to increase at the same rate as the interest rate. 
D)  determined by the supply of capital and the demand for capital. 
E)  the only factor of production whose quantity is not determined in a market.

Question 20

"In order for Charlie Trotter's,an upscale restaurant in Chicago,to maximize profit from the employment of chefs,the restaurant should hire chefs up to the point where the value of marginal product of chefs equals the wage rate for chefs." Is the statement correct or incorrect?

Accepted Answer

The statement is correct.In or

If the price of the firm's output increases,the demand for labor curve

Unions free trade and a higher minimum wage.

Suppose in Philadelphia the quantity of economists demanded is less than the quantity supplied by 2,000 economists.As a result,

If the wage rate increases,then

A natural resource is renewable if it

A profit-maximizing firm hires labor up to the point where

If the wage rate is above the equilibrium wage rate,the quantity of labor demanded is ________ the quantity of labor supplied.

According to the Hotelling Principle,the price of an nonrenewable resource is expected to

If the price of capital rises,in the long run the demand for labor

Suppose the Miami Dolphins are considering adding another backup quarterback to their roster.If the salary the Dolphins would have to pay equals $1,000,000 and the value of marginal product of the new quarterback equals $1,200,000,to maximize their profit the Dolphins should

As the price of land rises,the quantity supplied

The wage paid to labor is

Why does an increase in the minimum wage increase the demand for union labor?

Which of the following methods is used by unions to increase the demand for the labor of its members?

Which of the following is a correct statement of the relationship between advances in technology and the demand for labor?

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $45.Which of the following is correct?

The equilibrium quantity of capital is

"In order for Charlie Trotter's,an upscale restaurant in Chicago,to maximize profit from the employment of chefs,the restaurant should hire chefs up to the point where the value of marginal product of chefs equals the wage rate for chefs." Is the statement correct or incorrect?

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Economic Inequality

Filters

Exam 19: Markets for Factors of Production

If the price of the firm's output increases,the demand for labor curve

Unions ________ free trade and ________ a higher minimum wage.

Suppose in Philadelphia the quantity of economists demanded is less than the quantity supplied by 2,000 economists.As a result,

If the wage rate increases,then

A natural resource is renewable if it

A profit-maximizing firm hires labor up to the point where

If the wage rate is above the equilibrium wage rate,the quantity of labor demanded is ________ the quantity of labor supplied.

According to the Hotelling Principle,the price of an nonrenewable resource is expected to

If the price of capital rises,in the long run the demand for labor

Suppose the Miami Dolphins are considering adding another backup quarterback to their roster.If the salary the Dolphins would have to pay equals $1,000,000 and the value of marginal product of the new quarterback equals $1,200,000,to maximize their profit the Dolphins should

As the price of land rises,the quantity supplied

The wage paid to labor is

Why does an increase in the minimum wage increase the demand for union labor?

Which of the following methods is used by unions to increase the demand for the labor of its members?

Which of the following is a correct statement of the relationship between advances in technology and the demand for labor?

A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $45.Which of the following is correct?

The equilibrium quantity of capital is

"In order for Charlie Trotter's,an upscale restaurant in Chicago,to maximize profit from the employment of chefs,the restaurant should hire chefs up to the point where the value of marginal product of chefs equals the wage rate for chefs." Is the statement correct or incorrect?

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Economic Inequality

Filters

Unions free trade and a higher minimum wage.