Question 1

Which of the following events could increase the demand for labor?

Accepted Answer

A) a decrease in output price. 
B) a decrease in the amount of capital available for workers to use. 
C) an increase in the marginal productivity of workers. 
D) All of the above are correct. 
A) a decrease in output price. 
B) a decrease in the amount of capital available for workers to use. 
C) an increase in the marginal productivity of workers. 
D) All of the above are correct.

Question 2

If the MPP of labor is 60 and the price of labor per period is $20,the MPP of machinery is 75 and the price of the machinery per period is $25,in order to achieve optimal input proportions the firm should use

Accepted Answer

A) more labor and less machinery. 
B) more machinery and less labor. 
C) more labor with the same amount of machinery. 
D) the current combination. 
A) more labor and less machinery. 
B) more machinery and less labor. 
C) more labor with the same amount of machinery. 
D) the current combination.

Question 3

Use the table to answer the following question.
 
If the market wage rate is $130 per week,how many workers should be employed if the firm wants to maximize profit?

Accepted Answer

A) 3 
B) 4 
C) 5 
D) 6 or more 
A) 3 
B) 4 
C) 5 
D) 6 or more

Question 4

The following table provides information for Harry's Hammers,a firm that hires labor competitively and sells hammers for $50 each in a competitive price-taker market.
 
If the market wage rate is $225 per week,how many units of labor would a profit-maximizing firm employ?

Accepted Answer

A) 4 
B) 5 
C) 6 
D) 7 
A) 4 
B) 5 
C) 6 
D) 7

Question 5

Use the table to answer the following question.
 
If the market wage rate is $150 per worker,how many workers should be employed if the firm wants to maximize profit?

Accepted Answer

A) 3 
B) 4 
C) 5 
D) 6 
A) 3 
B) 4 
C) 5 
D) 6

Question 6

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 7

If the United Auto Workers' Union obtained a 15 percent increase in the wages of its workers,employment in the auto industry would most likely fall if

Accepted Answer

A) the demand for American-made automobiles was highly inelastic. 
B) American consumers considered foreign automobiles a poor substitute for American-made automobiles. 
C) the demand for American-made automobiles was highly elastic. 
D) the demand for American-made automobiles was increasing. 
A) the demand for American-made automobiles was highly inelastic. 
B) American consumers considered foreign automobiles a poor substitute for American-made automobiles. 
C) the demand for American-made automobiles was highly elastic. 
D) the demand for American-made automobiles was increasing.

Question 8

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 9

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 10

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 11

Suppose that workers immigrate to Minnesota from Canada.Which of the following correctly describes what would happen in the market for labor in Minnesota?

Accepted Answer

A) The equilibrium wage would increase,as would the quantity of labor.With more workers,the added output from an extra worker is larger. 
B) The equilibrium wage would decrease,as would the quantity of labor.With fewer workers,the added output from an extra worker is smaller. 
C) The equilibrium wage would decrease,and the quantity of labor would increase.With more workers,the added output from an extra worker is smaller. 
D) The equilibrium wage would decrease,and the quantity of labor would increase.With more workers,the added output from an extra worker is larger. 
A) The equilibrium wage would increase,as would the quantity of labor.With more workers,the added output from an extra worker is larger. 
B) The equilibrium wage would decrease,as would the quantity of labor.With fewer workers,the added output from an extra worker is smaller. 
C) The equilibrium wage would decrease,and the quantity of labor would increase.With more workers,the added output from an extra worker is smaller. 
D) The equilibrium wage would decrease,and the quantity of labor would increase.With more workers,the added output from an extra worker is larger.

Question 12

Suppose a certain firm is able to produce 165 units of output per day when 15 workers are hired.The firm is able to produce 176 units of output per day when 16 workers are hired (holding other inputs fixed).Then the marginal product of the 16th worker is

Accepted Answer

A) 10 units of output. 
B) 11 units of output. 
C) 16 units of output. 
D) 176 units of output. 
A) 10 units of output. 
B) 11 units of output. 
C) 16 units of output. 
D) 176 units of output.

Question 13

An improvement in technology that allows workers to process twice as many insurance forms in an hour than before will cause

Accepted Answer

A) more labor to be employed because its marginal revenue product has fallen. 
B) an increase in insurance premiums. 
C) fewer workers to be employed because their marginal revenue product has decreased. 
D) more workers to be employed because their marginal revenue product has increased. 
E) fewer workers to be employed because their marginal revenue product has increased. 
A) more labor to be employed because its marginal revenue product has fallen. 
B) an increase in insurance premiums. 
C) fewer workers to be employed because their marginal revenue product has decreased. 
D) more workers to be employed because their marginal revenue product has increased. 
E) fewer workers to be employed because their marginal revenue product has increased.

Question 14

An increase in the demand for automobiles will increase the demand for labor used to produce the automobiles due to

Accepted Answer

A) an increase in the marginal revenue product of labor. 
B) a decrease in the marginal revenue product of labor. 
C) an increase in the marginal revenue product of automobiles. 
D) a decrease in the marginal revenue product of automobiles. 
E) a decrease in the price of automobiles. 
A) an increase in the marginal revenue product of labor. 
B) a decrease in the marginal revenue product of labor. 
C) an increase in the marginal revenue product of automobiles. 
D) a decrease in the marginal revenue product of automobiles. 
E) a decrease in the price of automobiles.

Question 15

Consider the labor market for nurses,which initially is in equilibrium.Suppose the output price for nursing services increases.Holding all else equal,what effect will this have on the labor market for nurses?

Accepted Answer

A) The equilibrium wage will increase,and the equilibrium quantity of nurses will increase. 
B) The equilibrium wage will increase,and the equilibrium quantity of nurses will decrease. 
C) The equilibrium wage will decrease,and the equilibrium quantity of nurses will increase. 
D) The equilibrium wage will decrease,and the equilibrium quantity of nurses will decrease. 
A) The equilibrium wage will increase,and the equilibrium quantity of nurses will increase. 
B) The equilibrium wage will increase,and the equilibrium quantity of nurses will decrease. 
C) The equilibrium wage will decrease,and the equilibrium quantity of nurses will increase. 
D) The equilibrium wage will decrease,and the equilibrium quantity of nurses will decrease.

Question 16

If the cost of using skilled labor was twice the cost of using unskilled labor,and both were used by a profit-maximizing firm,the firm would adjust the quantity of each type of labor until

Accepted Answer

A) the marginal product of each was the same. 
B) twice as much unskilled labor was used. 
C) half as much unskilled labor was used. 
D) the marginal product of skilled labor was twice that of unskilled labor. 
A) the marginal product of each was the same. 
B) twice as much unskilled labor was used. 
C) half as much unskilled labor was used. 
D) the marginal product of skilled labor was twice that of unskilled labor.

Question 17

Which of the following most clearly illustrates the concept of "derived demand"?

Accepted Answer

A) An increase in the price of steak causes the demand for poultry to increase. 
B) As the price of coffee increases,the quantity demanded for coffee declines. 
C) A boom in the housing market leads to an increase in the demand for lumber and electricians. 
D) An increase in beer advertising on television leads to an increase in per capita beer consumption. 
A) An increase in the price of steak causes the demand for poultry to increase. 
B) As the price of coffee increases,the quantity demanded for coffee declines. 
C) A boom in the housing market leads to an increase in the demand for lumber and electricians. 
D) An increase in beer advertising on television leads to an increase in per capita beer consumption.

Question 18

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.

Question 19

The demand for a factor of production will be more inelastic

Accepted Answer

A) when the cost of the factor is small relative to the total cost of the product. 
B) the more elastic the demand for the final product. 
C) the easier it is to substitute other resources for the factor. 
D) the more elastic the supply of products produced with the resource. 
A) when the cost of the factor is small relative to the total cost of the product. 
B) the more elastic the demand for the final product. 
C) the easier it is to substitute other resources for the factor. 
D) the more elastic the supply of products produced with the resource.

Question 20

Which of the following is an example of an investment in human capital?

Accepted Answer

A) a law student who works as a waiter in the summer 
B) on-the-job training received by an apprentice welder 
C) payments into a retirement pension plan by a skilled laborer 
D) all of the above are correct. 
A) a law student who works as a waiter in the summer 
B) on-the-job training received by an apprentice welder 
C) payments into a retirement pension plan by a skilled laborer 
D) all of the above are correct.

Exam 25: The Supply of and Demand for Productive Resources

Which of the following events could increase the demand for labor?

If the MPP of labor is 60 and the price of labor per period is $20,the MPP of machinery is 75 and the price of the machinery per period is $25,in order to achieve optimal input proportions the firm should use

Use the table to answer the following question. If the market wage rate is $130 per week,how many workers should be employed if the firm wants to maximize profit?

The following table provides information for Harry's Hammers,a firm that hires labor competitively and sells hammers for $50 each in a competitive price-taker market. If the market wage rate is $225 per week,how many units of labor would a profit-maximizing firm employ?

Use the table to answer the following question. If the market wage rate is $150 per worker,how many workers should be employed if the firm wants to maximize profit?

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

If the United Auto Workers' Union obtained a 15 percent increase in the wages of its workers,employment in the auto industry would most likely fall if

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

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

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

Suppose that workers immigrate to Minnesota from Canada.Which of the following correctly describes what would happen in the market for labor in Minnesota?

Suppose a certain firm is able to produce 165 units of output per day when 15 workers are hired.The firm is able to produce 176 units of output per day when 16 workers are hired (holding other inputs fixed).Then the marginal product of the 16th worker is

An improvement in technology that allows workers to process twice as many insurance forms in an hour than before will cause

An increase in the demand for automobiles will increase the demand for labor used to produce the automobiles due to

Consider the labor market for nurses,which initially is in equilibrium.Suppose the output price for nursing services increases.Holding all else equal,what effect will this have on the labor market for nurses?

If the cost of using skilled labor was twice the cost of using unskilled labor,and both were used by a profit-maximizing firm,the firm would adjust the quantity of each type of labor until

Which of the following most clearly illustrates the concept of "derived demand"?

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

The demand for a factor of production will be more inelastic

Which of the following is an example of an investment in human capital?

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

Filters