Question 1

In the market for land, an increase in demand ________ the equilibrium rent of land and ________ the equilibrium quantity.

Accepted Answer

A) raises; does not change 
B) lowers; increases 
C) raises; increases 
D) does not change; increases 
E) does not change; does not change 
A) raises; does not change 
B) lowers; increases 
C) raises; increases 
D) does not change; increases 
E) does not change; does not change A

Question 2

In the market for land, the supply curve is

Accepted Answer

A) upward sloping. 
B) downward sloping. 
C) horizontal. 
D) vertical. 
E) U-shaped. 
A) upward sloping. 
B) downward sloping. 
C) horizontal. 
D) vertical. 
E) U-shaped. D

Question 3

When hiring labor, to maximize profit a firm hires labor

Accepted Answer

A) until the value of marginal product equals the wage rate. 
B) if the workers are not unionized. 
C) until the value of marginal product is less than the wage rate. 
D) until the value of marginal product is greater than the wage rate. 
E) until the value of marginal product equals the marginal revenue from hiring the worker. 
A) until the value of marginal product equals the wage rate. 
B) if the workers are not unionized. 
C) until the value of marginal product is less than the wage rate. 
D) until the value of marginal product is greater than the wage rate. 
E) until the value of marginal product equals the marginal revenue from hiring the worker. A

Question 4

The demand for a resource is derived from the

Accepted Answer

A) price of the resource. 
B) supply of the resource. 
C) supply of substitute resources. 
D) demand for the good or service that the resource is used to produce. 
E) supply of complement resources. 
A) price of the resource. 
B) supply of the resource. 
C) supply of substitute resources. 
D) demand for the good or service that the resource is used to produce. 
E) supply of complement resources.

Question 5

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 6

If the value of marginal product of the 10th worker is $60, then the

Accepted Answer

A) quantity of labor demanded when the wage rate is $60 will be 10 workers. 
B) wage rate of the 10th worker will be $6. 
C) firm will not hire the worker if the wage rate is less than $60. 
D) marginal cost of the 10th worker will be $6. 
E) quantity of labor demanded when the wage rate is $6 will be 10 workers. 
A) quantity of labor demanded when the wage rate is $60 will be 10 workers. 
B) wage rate of the 10th worker will be $6. 
C) firm will not hire the worker if the wage rate is less than $60. 
D) marginal cost of the 10th worker will be $6. 
E) quantity of labor demanded when the wage rate is $6 will be 10 workers.

Question 7

-The above figure represents the market for teenage workers at fast-food restaurants in Kansas City.
a∙What is the equilibrium wage rate and employment?
b∙Describe the market at a wage rate of $6 per hour.
c∙Describe the market at a wage rate of $12 an hour.
d∙How would an increase in the number of young, married college graduates, who tend to eat at fast-food restaurants, affect the figure, the equilibrium wage rate, and employment?

Accepted Answer

a∙The equilibrium wage rate is $8 an hou

Question 8

-The above figure shows the demand for labor curve for workers at a Pizza Hut in Canada.If the wage rate is $6 per hour, then the
I∙quantity of workers Pizza Hut demands is 10 workers.
Ii∙Pizza Hut would have been willing to hire the 6th worker even if they had to pay $7 per hour rather than $6 per hour.
Iii∙value of the marginal product of the 10th worker is $6 per hour.

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) i and iii 
E) i, ii, and iii 
A) i only 
B) ii only 
C) iii only 
D) i and iii 
E) i, ii, and iii

Question 9

Which of the following is a method used by unions to increase the demand for their members' labor?

Accepted Answer

A) Support import restrictions. 
B) Decrease the marginal product of union members. 
C) Increase imported goods and services 
D) Oppose immigration restrictions. 
E) Oppose minimum wage laws. 
A) Support import restrictions. 
B) Decrease the marginal product of union members. 
C) Increase imported goods and services 
D) Oppose immigration restrictions. 
E) Oppose minimum wage laws.

Question 10

If a union restricts the supply of labor, it ________ the wage rate and ________ the level of employment.

Accepted Answer

A) raises; decreases 
B) raises; increases 
C) raises; does not change 
D) lowers; decreases 
E) lowers; increases 
A) raises; decreases 
B) raises; increases 
C) raises; does not change 
D) lowers; decreases 
E) lowers; increases

Question 11

-The table above shows a the total product schedule of Piece a' Pi, a producer of pizza in a nearby college town.Suppose workers are paid $12 per hour and the price per pizza is $10.The value of marginal product of the fourth worker is ________ per hour.

Accepted Answer

A) $240 
B) $220 
C) $20 
D) $12 
E) $24 
A) $240 
B) $220 
C) $20 
D) $12 
E) $24

Question 12

The demand curve for labor is the same as the firm's

Accepted Answer

A) marginal revenue curve. 
B) marginal cost curve. 
C) value of marginal product of labor curve. 
D) wage rate curve. 
E) supply of output curve. 
A) marginal revenue curve. 
B) marginal cost curve. 
C) value of marginal product of labor curve. 
D) wage rate curve. 
E) supply of output curve.

Question 13

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.

Question 14

The value of marginal product of labor

Accepted Answer

A) always increases as more labor is hired. 
B) is constant as long as each worker is paid the same wage rate. 
C) declines only if each worker is paid more than the previous worker. 
D) at some point declines as more workers are hired. 
E) at first decreases and then increases as more workers are hired. 
A) always increases as more labor is hired. 
B) is constant as long as each worker is paid the same wage rate. 
C) declines only if each worker is paid more than the previous worker. 
D) at some point declines as more workers are hired. 
E) at first decreases and then increases as more workers are hired.

Question 15

Derived demand means that the demand for a factor of production is derived from the

Accepted Answer

A) supply of that factor of production. 
B) price of that factor of production. 
C) demand for the goods and services the factor of production is used to produce. 
D) costs of production. 
E) government, which forces large firms to hire at least some minimum number of different resources. 
A) supply of that factor of production. 
B) price of that factor of production. 
C) demand for the goods and services the factor of production is used to produce. 
D) costs of production. 
E) government, which forces large firms to hire at least some minimum number of different resources.

Question 16

Suppose in Chicago, at the going wage rate of $16.00 an hour, the quantity of lifeguards demanded exceeds the quantity supplied by 13,000 lifeguards.As a result,

Accepted Answer

A) there is a surplus of lifeguards in Chicago. 
B) there is a shortage of lifeguards in Chicago. 
C) the lifeguard labor market is in equilibrium in Chicago. 
D) wage rates will probably fall in this market. 
E) the demand for labor of lifeguards in Chicago will decrease. 
A) there is a surplus of lifeguards in Chicago. 
B) there is a shortage of lifeguards in Chicago. 
C) the lifeguard labor market is in equilibrium in Chicago. 
D) wage rates will probably fall in this market. 
E) the demand for labor of lifeguards in Chicago will decrease.

Question 17

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 18

The table has the marginal products for workers at Bart's Bats, a baseball bat factory.
-Using the above table, suppose the price of a bat is $3.If the wage rate for a worker in a baseball bat manufacturing plant is $18 an hour, then the firm will hire ________ workers; if the wage rate falls to $12 an hour, then the firm will hire ________.

Accepted Answer

A) 1; 2 
B) 2; 4 
C) 3; 3 
D) 5; 4 
E) 3; 5 
A) 1; 2 
B) 2; 4 
C) 3; 3 
D) 5; 4 
E) 3; 5

Question 19

In part, the demand for labor depends on the

Accepted Answer

A) supply of labor. 
B) number of workers available. 
C) price of the firm's output. 
D) worker's income. 
E) wage rate at which the labor supply curve starts to bend backwards. 
A) supply of labor. 
B) number of workers available. 
C) price of the firm's output. 
D) worker's income. 
E) wage rate at which the labor supply curve starts to bend backwards.

Question 20

What is the value of marginal product of labor? What is the formula that can be used to calculate? How does the value of the marginal product affect how much labor a firm hires?

Accepted Answer

The value of marginal product of labor i

In the market for land, an increase in demand the equilibrium rent of land and the equilibrium quantity.

In the market for land, the supply curve is

When hiring labor, to maximize profit a firm hires labor

The demand for a resource is derived from the

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

If the value of marginal product of the 10th worker is $60, then the

Which of the following is a method used by unions to increase the demand for their members' labor?

If a union restricts the supply of labor, it the wage rate and the level of employment.

-The table above shows a the total product schedule of Piece a' Pi, a producer of pizza in a nearby college town.Suppose workers are paid $12 per hour and the price per pizza is $10.The value of marginal product of the fourth worker is ________ per hour.

The demand curve for labor is the same as the firm's

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

The value of marginal product of labor

Derived demand means that the demand for a factor of production is derived from the

Suppose in Chicago, at the going wage rate of $16.00 an hour, the quantity of lifeguards demanded exceeds the quantity supplied by 13,000 lifeguards.As a result,

As the price of land rises, the quantity supplied

In part, the demand for labor depends on the

What is the value of marginal product of labor? What is the formula that can be used to calculate? How does the value of the marginal product affect how much labor a firm hires?

Getting Started

The Usand 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

In the market for land, an increase in demand ________ the equilibrium rent of land and ________ the equilibrium quantity.

In the market for land, the supply curve is

When hiring labor, to maximize profit a firm hires labor

The demand for a resource is derived from the

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

If the value of marginal product of the 10th worker is $60, then the

Which of the following is a method used by unions to increase the demand for their members' labor?

If a union restricts the supply of labor, it ________ the wage rate and ________ the level of employment.

-The table above shows a the total product schedule of Piece a' Pi, a producer of pizza in a nearby college town.Suppose workers are paid $12 per hour and the price per pizza is $10.The value of marginal product of the fourth worker is ________ per hour.

The demand curve for labor is the same as the firm's

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

The value of marginal product of labor

Derived demand means that the demand for a factor of production is derived from the

Suppose in Chicago, at the going wage rate of $16.00 an hour, the quantity of lifeguards demanded exceeds the quantity supplied by 13,000 lifeguards.As a result,

As the price of land rises, the quantity supplied

In part, the demand for labor depends on the

What is the value of marginal product of labor? What is the formula that can be used to calculate? How does the value of the marginal product affect how much labor a firm hires?

Getting Started

The Usand 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

In the market for land, an increase in demand the equilibrium rent of land and the equilibrium quantity.

If a union restricts the supply of labor, it the wage rate and the level of employment.