Question 1

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

Accepted Answer

A) nuclear physicists 
B) surgeons 
C) retail cashiers 
D) graduate-level math professors 
A) nuclear physicists 
B) surgeons 
C) retail cashiers 
D) graduate-level math professors

Question 2

An unexpected decrease in the demand for accountants will lead to

Accepted Answer

A) an increase in the earnings of accountants. 
B) an increase in the incentive of students to prepare for a career in accounting. 
C) a reduction in the future supply of accountants. 
D) an increase in the employment opportunities of accountants. 
A) an increase in the earnings of accountants. 
B) an increase in the incentive of students to prepare for a career in accounting. 
C) a reduction in the future supply of accountants. 
D) an increase in the employment opportunities of accountants.

Question 3

The demand curve for a human resource will be more elastic the

Accepted Answer

A) more and better substitutes are available for it. 
B) more difficult it is to substitute other resources for it. 
C) more inelastic the demand for the product the resource is used to produce. 
D) shorter the time period under consideration. 
A) more and better substitutes are available for it. 
B) more difficult it is to substitute other resources for it. 
C) more inelastic the demand for the product the resource is used to produce. 
D) shorter the time period under consideration.

Question 4

If the marginal physical product of more labor is twice as high as the marginal physical product of more machinery,a profit-maximizing firm will

Accepted Answer

A) reduce the labor used and increase the machinery used if labor costs half as much as machinery. 
B) reduce the labor used and increase the machinery used if labor and machinery cost the same amount. 
C) reduce the labor used and increase the machinery used only if labor costs more than twice as much as machinery. 
D) reduce the labor used and increase the machinery used only if labor costs exactly twice as much as machinery. 
A) reduce the labor used and increase the machinery used if labor costs half as much as machinery. 
B) reduce the labor used and increase the machinery used if labor and machinery cost the same amount. 
C) reduce the labor used and increase the machinery used only if labor costs more than twice as much as machinery. 
D) reduce the labor used and increase the machinery used only if labor costs exactly twice as much as machinery.

Question 5

Firms should hire additional units of a resource as long as the

Accepted Answer

A) marginal product of the resource exceeds the price of the resource multiplied by the quantity of output produced. 
B) marginal product of the resource is less than the price of the resource. 
C) price of the output produced is positive. 
D) marginal revenue product of the resource exceeds the cost of employing an additional unit of the resource. 
A) marginal product of the resource exceeds the price of the resource multiplied by the quantity of output produced. 
B) marginal product of the resource is less than the price of the resource. 
C) price of the output produced is positive. 
D) marginal revenue product of the resource exceeds the cost of employing an additional unit of the resource.

Question 6

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 7

The change in the total revenue of a firm that results from employing one additional unit of a factor of production is defined as the

Accepted Answer

A) total revenue product of the resource. 
B) marginal product of the resource. 
C) marginal revenue product of the resource. 
D) average revenue product of the resource. 
A) total revenue product of the resource. 
B) marginal product of the resource. 
C) marginal revenue product of the resource. 
D) average revenue product of the resource.

Question 8

Firms should hire additional units of a resource as long as the

Accepted Answer

A) marginal product of the resource exceeds the price of the resource multiplied by the quantity of output produced. 
B) marginal product of the resource is less than the price of the resource. 
C) price of the output produced is positive. 
D) marginal revenue product of the resource exceeds the cost of employing an additional unit of the resource. 
A) marginal product of the resource exceeds the price of the resource multiplied by the quantity of output produced. 
B) marginal product of the resource is less than the price of the resource. 
C) price of the output produced is positive. 
D) marginal revenue product of the resource exceeds the cost of employing an additional unit of the resource.

Question 9

The following figure indicates the reductions in total losses due to theft if a jewelry store hires additional security guards.
 
If the security guards can be hired for $45 per day,how many guards should the shop hire?

Accepted Answer

A) 2 
B) 3 
C) 4 
D) 5 
E) 6 
A) 2 
B) 3 
C) 4 
D) 5 
E) 6

Question 10

Harold Brown runs a company that sells encyclopedia sets for $250.The following schedule indicates the number of sets per week that are sold as employment increases.
 
If Brown's costs increase by $1,300 per week as additional workers are employed,how many workers should be employed in order to maximize profit?

Accepted Answer

A) five 
B) six 
C) seven 
D) eight 
A) five 
B) six 
C) seven 
D) eight

Question 11

A firm's demand curve for labor shifts when the

Accepted Answer

A) price of its output changes. 
B) wage rate changes. 
C) number of available workers changes. 
D) All of the above are correct. 
A) price of its output changes. 
B) wage rate changes. 
C) number of available workers changes. 
D) All of the above are correct.

Question 12

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 13

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 14

The rule for the optimal use of any input states that

Accepted Answer

A) when MRP is less than price,profit will increase when more of that resource is utilized. 
B) when MRP is greater than resource price,profit will increase when more of that resource is utilized. 
C) when MRP equals price,profit will increase when less of that resource is utilized. 
D) when MRP is greater than resource price,profit will increase when less of that resource is utilized. 
E) resources should be used only if MRP exceeds product price. 
A) when MRP is less than price,profit will increase when more of that resource is utilized. 
B) when MRP is greater than resource price,profit will increase when more of that resource is utilized. 
C) when MRP equals price,profit will increase when less of that resource is utilized. 
D) when MRP is greater than resource price,profit will increase when less of that resource is utilized. 
E) resources should be used only if MRP exceeds product price.

Question 15

Which of the following resources will have the most inelastic supply in the short run?

Accepted Answer

A) dentists 
B) receptionists 
C) waiters 
D) flight attendants 
A) dentists 
B) receptionists 
C) waiters 
D) flight attendants

Question 16

Use the information in the table below to answer the following question(s).The firm hires labor competitively and sells its product in a competitive price-taker market.
Table 12-6
  
-Refer to Table 12-6.If the market wage rate is $25 per day,how many workers should the firm hire if it wants to maximize profits?

Accepted Answer

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

Question 17

Assume the average salary for a college philosophy professor is $50,000.Suppose businesses decide they need in-house instructors to teach ethics to employees,and they begin hiring philosophy professors at a salary of $75,000.What are the short-term and long-term effects of this supposition?

Accepted Answer

As philosophy professors move into the c

Question 18

A sudden increase in the demand for newly built homes will

Accepted Answer

A) decrease the demand for lumber,bricks,and steel. 
B) decrease the demand for construction workers and architects. 
C) increase the marginal product of workers in the construction industry. 
D) increase the demand for construction workers and architects. 
A) decrease the demand for lumber,bricks,and steel. 
B) decrease the demand for construction workers and architects. 
C) increase the marginal product of workers in the construction industry. 
D) increase the demand for construction workers and architects.

Question 19

The figure below depicts a production function for a firm that produces cookies.
Figure 12-4
  
-Refer to Figure 12-4.As the number of workers increases,

Accepted Answer

A) total output increases,but at a decreasing rate. 
B) marginal product increases,but at a decreasing rate. 
C) marginal product increases at an increasing rate. 
D) total output decreases. 
A) total output increases,but at a decreasing rate. 
B) marginal product increases,but at a decreasing rate. 
C) marginal product increases at an increasing rate. 
D) total output decreases.

Question 20

Suppose the United Auto Workers' Union succeeded in obtaining a 10 percent increase in the wages of its workers and that the wage increase caused automobile prices to rise.Employment in the auto industry would be most likely to decline significantly if

Accepted Answer

A) the demand for American-made automobiles was highly elastic. 
B) the supply of foreign-produced automobiles was highly inelastic. 
C) American consumers considered foreign automobiles a poor substitute for American automobiles. 
D) the demand for American automobiles was relatively constant and highly inelastic. 
A) the demand for American-made automobiles was highly elastic. 
B) the supply of foreign-produced automobiles was highly inelastic. 
C) American consumers considered foreign automobiles a poor substitute for American automobiles. 
D) the demand for American automobiles was relatively constant and highly inelastic.

Exam 25: The Supply of and Demand for Productive Resources

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

An unexpected decrease in the demand for accountants will lead to

The demand curve for a human resource will be more elastic the

If the marginal physical product of more labor is twice as high as the marginal physical product of more machinery,a profit-maximizing firm will

Firms should hire additional units of a resource as long as the

An increase in the demand for a resource

The change in the total revenue of a firm that results from employing one additional unit of a factor of production is defined as the

Firms should hire additional units of a resource as long as the

The following figure indicates the reductions in total losses due to theft if a jewelry store hires additional security guards. If the security guards can be hired for $45 per day,how many guards should the shop hire?

A firm's demand curve for labor shifts when the

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

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

The rule for the optimal use of any input states that

Which of the following resources will have the most inelastic supply in the short run?

Assume the average salary for a college philosophy professor is $50,000.Suppose businesses decide they need in-house instructors to teach ethics to employees,and they begin hiring philosophy professors at a salary of $75,000.What are the short-term and long-term effects of this supposition?

A sudden increase in the demand for newly built homes will

The figure below depicts a production function for a firm that produces cookies. Figure 12-4 -Refer to Figure 12-4.As the number of workers increases,

Suppose the United Auto Workers' Union succeeded in obtaining a 10 percent increase in the wages of its workers and that the wage increase caused automobile prices to rise.Employment in the auto industry would be most likely to decline significantly if

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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