Question 1

Assume that the demand for paper products increases.Then,we expect that the

Accepted Answer

A) demand for trees will also increase. 
B) demand for trees will stay the same. 
C) demand for trees will decrease. 
D) effect on the demand for trees is uncertain;it depends on the elasticity of the demand for paper. 
A) demand for trees will also increase. 
B) demand for trees will stay the same. 
C) demand for trees will decrease. 
D) effect on the demand for trees is uncertain;it depends on the elasticity of the demand for paper. A

Question 2

The optimal level of resource use comes when

Accepted Answer

A) MRP exceeds input price. 
B) MRP is less than input price. 
C) MRP equals input price. 
D) use of the resource exhausts the producer's funds. 
A) MRP exceeds input price. 
B) MRP is less than input price. 
C) MRP equals input price. 
D) use of the resource exhausts the producer's funds. C

Question 3

Table 12-2
  
-Refer to Table 12-2.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $5 in a competitive market.For which level of employment is the marginal product of labor greatest?

Accepted Answer

A) 1 worker 
B) 2 workers 
C) 3 workers 
D) 4 workers 
A) 1 worker 
B) 2 workers 
C) 3 workers 
D) 4 workers B

Question 4

An unexpected increase in the demand for accountants will lead to

Accepted Answer

A) an increase in their earnings and an expansion in the future supply of accountants. 
B) a decrease in the incentive of students to prepare for a career in accounting. 
C) a reduction in the current earnings of accountants,followed by a reduction in the future supply of accountants. 
D) a reduction in the employment of accountants but not their wage rates. 
A) an increase in their earnings and an expansion in the future supply of accountants. 
B) a decrease in the incentive of students to prepare for a career in accounting. 
C) a reduction in the current earnings of accountants,followed by a reduction in the future supply of accountants. 
D) a reduction in the employment of accountants but not their wage rates.

Question 5

Which of the following would tend to decrease the demand for coal miners?

Accepted Answer

A) an increase in the wages of coal miners 
B) an increase in the price of oil 
C) a decrease in the demand for coal 
D) an increase in the supply of coal miners 
A) an increase in the wages of coal miners 
B) an increase in the price of oil 
C) a decrease in the demand for coal 
D) an increase in the supply of coal miners

Question 6

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

Accepted Answer

A) The labor supply will stay unchanged until the wages paid to pear pickers change. 
B) The labor supply will decrease. 
C) The labor supply will increase. 
D) The labor supply may fall or rise,depending on the price of pears. 
A) The labor supply will stay unchanged until the wages paid to pear pickers change. 
B) The labor supply will decrease. 
C) The labor supply will increase. 
D) The labor supply may fall or rise,depending on the price of pears.

Question 7

If a profit-maximizing firm hires an additional unit of labor,what must be true about labor's wage and marginal revenue product?

Accepted Answer

A) Its wage always equals its marginal revenue product. 
B) Its wage is always greater than its marginal revenue product. 
C) Its wage is always total revenue minus marginal revenue product. 
D) Its wage is always less than or equal to its marginal revenue product. 
A) Its wage always equals its marginal revenue product. 
B) Its wage is always greater than its marginal revenue product. 
C) Its wage is always total revenue minus marginal revenue product. 
D) Its wage is always less than or equal to its marginal revenue product.

Question 8

As the price paid to a resource increases,

Accepted Answer

A) the supply of that resource will increase in the resource market. 
B) the supply of that resource will decrease in the resource market. 
C) resources will shift from other resource markets to this one. 
D) resources will shift from this resource market to others. 
E) resource usage will be unaffected. 
A) the supply of that resource will increase in the resource market. 
B) the supply of that resource will decrease in the resource market. 
C) resources will shift from other resource markets to this one. 
D) resources will shift from this resource market to others. 
E) resource usage will be unaffected.

Question 9

If a firm is using a resource hired in a perfectly competitive market,and if the price of the resource exceeds the marginal revenue product of the resource,

Accepted Answer

A) more of the resource should be used. 
B) less of the resource should be used. 
C) the firm should pay a lower price for the resource. 
D) the firm should pay a higher price for the resource. 
E) the firm is using the optimal amount of the resource 
A) more of the resource should be used. 
B) less of the resource should be used. 
C) the firm should pay a lower price for the resource. 
D) the firm should pay a higher price for the resource. 
E) the firm is using the optimal amount of the resource

Question 10

Suppose a new oxygen-enrichment process will cut in half the energy required to smelt copper.The firm selling licenses for this patented process will experience a greater demand for its product when

Accepted Answer

A) the price of copper falls and smelters become more desperate to economize. 
B) energy prices are expected to fall. 
C) energy prices are expected to rise. 
D) the price of steel,a substitute for copper,declines. 
A) the price of copper falls and smelters become more desperate to economize. 
B) energy prices are expected to fall. 
C) energy prices are expected to rise. 
D) the price of steel,a substitute for copper,declines.

Question 11

When the supply of workers is plentiful,one would predict that market wages would be

Accepted Answer

A) determined solely by factors that affect supply. 
B) determined solely by factors that affect demand. 
C) low,other things equal. 
D) high,other things equal. 
A) determined solely by factors that affect supply. 
B) determined solely by factors that affect demand. 
C) low,other things equal. 
D) high,other things equal.

Question 12

Table 12-3
  
-Refer to Table 12-3.What is the marginal product of the third worker?

Accepted Answer

A) 7 
B) 8 
C) 25 
D) 75 
A) 7 
B) 8 
C) 25 
D) 75

Question 13

Which of the following is the best definition of "physical capital"?

Accepted Answer

A) the labor utilized in the production process 
B) man-made resources used to produce other goods 
C) natural resources in their original state 
D) the ownership of stock shares issued by a corporation 
A) the labor utilized in the production process 
B) man-made resources used to produce other goods 
C) natural resources in their original state 
D) the ownership of stock shares issued by a corporation

Question 14

A profit-maximizing restaurant owner will hire more busboys to keep more tables clean and quickly available to new customers,as long as the

Accepted Answer

A) marginal product of busboys exceeds the marginal product of other employees. 
B) hourly wage of busboys is lower than that of cashiers and cooks. 
C) marginal revenue product of busboys exceeds their wage rate. 
D) wage of busboys exceeds the wage of other employees. 
A) marginal product of busboys exceeds the marginal product of other employees. 
B) hourly wage of busboys is lower than that of cashiers and cooks. 
C) marginal revenue product of busboys exceeds their wage rate. 
D) wage of busboys exceeds the wage of other employees.

Question 15

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

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.What is the marginal revenue product of the fifth unit of labor?

Accepted Answer

A) $2 
B) $4 
C) $20 
D) $100 
A) $2 
B) $4 
C) $20 
D) $100

Question 17

The demand for a resource depends largely on the

Accepted Answer

A) demand for the products that it produces. 
B) price of the resource. 
C) supply of the resource. 
D) cost of producing the resource. 
A) demand for the products that it produces. 
B) price of the resource. 
C) supply of the resource. 
D) cost of producing the resource.

Question 18

Unions often attempt to obtain stricter certification requirements and/or longer apprenticeships.These changes will tend to raise union workers' wages because they

Accepted Answer

A) create unnecessary unemployment. 
B) shift the labor supply curve leftward. 
C) decrease the marginal product of labor. 
D) increase the demand for the product. 
A) create unnecessary unemployment. 
B) shift the labor supply curve leftward. 
C) decrease the marginal product of labor. 
D) increase the demand for the product.

Question 19

Assume that skilled labor costs twice as much as unskilled labor,a profit-maximizing firm will

Accepted Answer

A) always hire more skilled labor because it is more productive. 
B) always hire more unskilled labor because it is cheaper. 
C) hire until it equalizes the two marginal products. 
D) hire until the marginal product of unskilled labor is one-half that of skilled labor. 
E) hire until the marginal product of unskilled labor is two times that of skilled labor. 
A) always hire more skilled labor because it is more productive. 
B) always hire more unskilled labor because it is cheaper. 
C) hire until it equalizes the two marginal products. 
D) hire until the marginal product of unskilled labor is one-half that of skilled labor. 
E) hire until the marginal product of unskilled labor is two times that of skilled labor.

Question 20

As the price of a resource decreases,

Accepted Answer

A) demand for that resource increases. 
B) the quantity demanded of that resource decreases. 
C) the supply of that resource increases. 
D) producers are more willing and able to hire that resource. 
E) producers are less willing and able to hire that resource. 
A) demand for that resource increases. 
B) the quantity demanded of that resource decreases. 
C) the supply of that resource increases. 
D) producers are more willing and able to hire that resource. 
E) producers are less willing and able to hire that resource.

Exam 25: The Supply of and Demand for Productive Resources

Assume that the demand for paper products increases.Then,we expect that the

The optimal level of resource use comes when

Table 12-2 -Refer to Table 12-2.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $5 in a competitive market.For which level of employment is the marginal product of labor greatest?

An unexpected increase in the demand for accountants will lead to

Which of the following would tend to decrease the demand for coal miners?

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

If a profit-maximizing firm hires an additional unit of labor,what must be true about labor's wage and marginal revenue product?

As the price paid to a resource increases,

If a firm is using a resource hired in a perfectly competitive market,and if the price of the resource exceeds the marginal revenue product of the resource,

Suppose a new oxygen-enrichment process will cut in half the energy required to smelt copper.The firm selling licenses for this patented process will experience a greater demand for its product when

When the supply of workers is plentiful,one would predict that market wages would be

Table 12-3 -Refer to Table 12-3.What is the marginal product of the third worker?

Which of the following is the best definition of "physical capital"?

A profit-maximizing restaurant owner will hire more busboys to keep more tables clean and quickly available to new customers,as long as the

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

The demand for a resource depends largely on the

Unions often attempt to obtain stricter certification requirements and/or longer apprenticeships.These changes will tend to raise union workers' wages because they

Assume that skilled labor costs twice as much as unskilled labor,a profit-maximizing firm will

As the price of a resource decreases,

The Economic Approach

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Institutions,policies,and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-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

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

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