Question 1

(Figure: Labor in a Competitive Market 0) In the figure, the going price of labor in the competitive labor market is:

Accepted Answer

A)  $50. 
B)  $250. 
C)  $350. 
D)  $450. 
A)  $50. 
B)  $250. 
C)  $350. 
D)  $450. B

Question 2

(Figure: MPP and MRP) Unit Price = $5
In the table, what is the marginal revenue product of the fifth worker?
 $\begin{array}{|l|l|l|l|l|}
 \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L}  \
& \text { Product } & & \text { Revenue } & \
& \text { (Q) } & & \text { (TR) } &\
 \hline & 35 & 35 & ? & \$ 175 \
\hline 2 & 75 & 40 & ? & \$ 200 \
\hline 3 & 105 & 30 & \$ 525 & ? \
\hline 4 & 130 & 25 & \$ 650 & ? \
\hline 5 & 150 & 20 & \$ 750 & ?\
\hline
\end{array}$

Accepted Answer

A)  $100 
B)  $150 
C)  $200 
D)  $750 
A)  $100 
B)  $150 
C)  $200 
D)  $750 A

Question 3

Marginal _____ is the process of comparing the additional benefits of an activity with the additional cost.

Accepted Answer

A)  product 
B)  analysis 
C)  economics 
D)  revenue 
A)  product 
B)  analysis 
C)  economics 
D)  revenue B

Question 4

_____ is a market with a single buyer.

Accepted Answer

A)  A monopoly 
B)  A monopsony 
C)  An oligopoly 
D)  An oligopsony 
A)  A monopoly 
B)  A monopsony 
C)  An oligopoly 
D)  An oligopsony

Question 5

The more productive a worker is, the higher the:

Accepted Answer

A)  marginal product. 
B)  total revenue. 
C)  marginal physical product. 
D)  total product. 
A)  marginal product. 
B)  total revenue. 
C)  marginal physical product. 
D)  total product.

Question 6

The marginal revenue product of labor is derived from _____ and the _____ the final output.

Accepted Answer

A)  marginal cost; demand for 
B)  marginal cost; supply of 
C)  the productivity of the worker; demand for 
D)  the productivity of the worker; supply of 
A)  marginal cost; demand for 
B)  marginal cost; supply of 
C)  the productivity of the worker; demand for 
D)  the productivity of the worker; supply of

Question 7

Wei sells sandwiches for $10 each in a competitive product market. The marginal revenue product for the fourth worker is $60. The marginal physical product of the fourth worker is:

Accepted Answer

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

Question 8

(Figure: MPP and MRP) Unit Price = $5
In the table, in a competitive labor market, if the prevailing price of labor is $100, this firm should hire _____ workers.
 $\begin{array}{|l|l|l|l|l|}
 \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L}  \
& \text { Product } & & \text { Revenue } & \
& \text { (Q) } & & \text { (TR) } &\
 \hline & 35 & 35 & ? & \$ 175 \
\hline 2 & 75 & 40 & ? & \$ 200 \
\hline 3 & 105 & 30 & \$ 525 & ? \
\hline 4 & 130 & 25 & \$ 650 & ? \
\hline 5 & 150 & 20 & \$ 750 & ?\
\hline
\end{array}$

Accepted Answer

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

Question 9

(Figure: MPP and MRP) Unit Price = $5
In the table, in a competitive labor market, if the prevailing price of labor is $125, this firm will hire _____ workers.
 $\begin{array}{|l|l|l|l|l|}
 \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L}  \
& \text { Product } & & \text { Revenue } & \
& \text { (Q) } & & \text { (TR) } &\
 \hline & 35 & 35 & ? & \$ 175 \
\hline 2 & 75 & 40 & ? & \$ 200 \
\hline 3 & 105 & 30 & \$ 525 & ? \
\hline 4 & 130 & 25 & \$ 650 & ? \
\hline 5 & 150 & 20 & \$ 750 & ?\
\hline
\end{array}$

Accepted Answer

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

Question 10

Discuss featherbedding and the ways that it affects the demand and supply of labor.

Accepted Answer

Featherbedding is the practice of requir

Question 11

The marginal revenue product of labor is a short-run concept because:

Accepted Answer

A)  cost is fixed. 
B)  all inputs except labor are fixed. 
C)  cost is variable. 
D)  all inputs except labor are variable. 
A)  cost is fixed. 
B)  all inputs except labor are fixed. 
C)  cost is variable. 
D)  all inputs except labor are variable.

Question 12

The marginal revenue product for labor (MRPL) is derived from the productivity of the worker and:

Accepted Answer

A)  marginal cost. 
B)  marginal labor. 
C)  the revenue of the final output. 
D)  the demand for the final output. 
A)  marginal cost. 
B)  marginal labor. 
C)  the revenue of the final output. 
D)  the demand for the final output.

Question 13

Identify and discuss two principles that firms use in deciding how to use resources other than labor, such as physical capital.

Accepted Answer

In deciding how to use resources other t

Question 14

Explain how a firm could increase profits by hiring more labor and, conversely, how it could increase profits by laying off labor.

Accepted Answer

The demand for any resource is the margi

Question 15

According to economist Gary Becker, discrimination in the labor market:

Accepted Answer

A)  is the result of profit maximization behavior. 
B)  is the result of cost maximization behavior. 
C)  is inconsistent with profit maximization behavior. 
D)  does not occur. 
A)  is the result of profit maximization behavior. 
B)  is the result of cost maximization behavior. 
C)  is inconsistent with profit maximization behavior. 
D)  does not occur.

Question 16

(Figure: Labor in a Competitive Market A) In the figure, if the firm hires three workers, the price of labor at equilibrium is:

Accepted Answer

A)  $150. 
B)  $250. 
C)  $350. 
D)  $450. 
A)  $150. 
B)  $250. 
C)  $350. 
D)  $450.

Question 17

Explain why the labor demand curve is downward sloping.

Accepted Answer

The demand for labor is downward sloping

Question 18

(Figure: Diminishing Returns 0) In the table, after the _____ worker, diminishing returns set in.
 $\begin{array}{|l|l|}
\hline \begin{array}{l}
\text { Labor } \
\text { (Workers) }
\end{array} & \begin{array}{l}
\text { Output } \
\text { (Total } \
\text { Product) }
\end{array} \
\hline 1 & 25 \
\hline 2 & 56 \
\hline 3 & 90 \
\hline 4 & 100 \
\hline 5 & 105 \
\hline
\end{array}$

Accepted Answer

A)  second 
B)  third 
C)  fourth 
D)  fifth 
A)  second 
B)  third 
C)  fourth 
D)  fifth

Question 19

The _____ effect on labor supply occurs when workers supply less labor at higher wages because the additional income increases the demand for leisure.

Accepted Answer

A)  income 
B)  substitution 
C)  complementary 
D)  elasticity 
A)  income 
B)  substitution 
C)  complementary 
D)  elasticity

Question 20

If Marcel, who recently received an increase in wages, decides to work fewer hours, the _____ effect for leisure outweighs the _____ effect for him.

Accepted Answer

A)  income; complementary 
B)  substitution; income 
C)  complementary; elasticity 
D)  income; substitution 
A)  income; complementary 
B)  substitution; income 
C)  complementary; elasticity 
D)  income; substitution

Exam 17: Labor and Other Resources

(Figure: Labor in a Competitive Market 0) In the figure, the going price of labor in the competitive labor market is:

(Figure: MPP and MRP) Unit Price = $5 In the table, what is the marginal revenue product of the fifth worker? Labor Total Total Product Revenue (Q) (TR) 35 35 ? \ 175 2 75 40 ? \ 200 3 105 30 \ 525 ? 4 130 25 \ 650 ? 5 150 20 \ 750 ?

Marginal _____ is the process of comparing the additional benefits of an activity with the additional cost.

_____ is a market with a single buyer.

The more productive a worker is, the higher the:

The marginal revenue product of labor is derived from _____ and the _____ the final output.

Wei sells sandwiches for $10 each in a competitive product market. The marginal revenue product for the fourth worker is $60. The marginal physical product of the fourth worker is:

(Figure: MPP and MRP) Unit Price = $5 In the table, in a competitive labor market, if the prevailing price of labor is $100, this firm should hire _____ workers. Labor Total Total Product Revenue (Q) (TR) 35 35 ? \ 175 2 75 40 ? \ 200 3 105 30 \ 525 ? 4 130 25 \ 650 ? 5 150 20 \ 750 ?

(Figure: MPP and MRP) Unit Price = $5 In the table, in a competitive labor market, if the prevailing price of labor is $125, this firm will hire _____ workers. Labor Total Total Product Revenue (Q) (TR) 35 35 ? \ 175 2 75 40 ? \ 200 3 105 30 \ 525 ? 4 130 25 \ 650 ? 5 150 20 \ 750 ?

Discuss featherbedding and the ways that it affects the demand and supply of labor.

The marginal revenue product of labor is a short-run concept because:

The marginal revenue product for labor (MRPL) is derived from the productivity of the worker and:

Identify and discuss two principles that firms use in deciding how to use resources other than labor, such as physical capital.

Explain how a firm could increase profits by hiring more labor and, conversely, how it could increase profits by laying off labor.

According to economist Gary Becker, discrimination in the labor market:

(Figure: Labor in a Competitive Market A) In the figure, if the firm hires three workers, the price of labor at equilibrium is:

Explain why the labor demand curve is downward sloping.

(Figure: Diminishing Returns 0) In the table, after the _____ worker, diminishing returns set in. Labor (Workers) Output (Total Product) 1 25 2 56 3 90 4 100 5 105

The _____ effect on labor supply occurs when workers supply less labor at higher wages because the additional income increases the demand for leisure.

If Marcel, who recently received an increase in wages, decides to work fewer hours, the _____ effect for leisure outweighs the _____ effect for him.

The Basics of Economics

Why We Trade

The Supply and Demand Model

Elasticity

Consumer Choice

The Economic Efficiency of Markets

Taxation: An Economic Analysis

Externalities, the Environment, and Public Goods

Organizing a Business

Stocks and Bonds

The Cost of Doing Business

Perfect Competition

Monopoly and Antitrust Laws

Monopolistic Competition and Price Discrimination

Oligopoly

Behavioral Economics and Strategy

The Distribution of Income

Information and Health Economics

GDP and the Price Level

Unemployment and the Business Cycle

Long Run Economic Growth

Saving, Investment, and the Federal Budget Deficit

The Monetary System

Money and the Price Level in the Long Run

Aggregate Supply and Aggregate Demand

Monetary Policy and Interest Rates

Fiscal Policy and the Business Cycle

The Aggregate Expenditure Model

Inflation Expectations and Stabilization Policies

International Trade

Foreign Exchange Markets

International Finance

Filters

The marginal revenue product of labor is derived from _ and the _ the final output.

The marginal revenue product for labor (MRP_L) is derived from the productivity of the worker and:

If Marcel, who recently received an increase in wages, decides to work fewer hours, the _ effect for leisure outweighs the _ effect for him.