Question 1

Table 12-5
  
-Refer to Table 12-5. What is the marginal product of the fourth worker?

Accepted Answer

A)  65 
B)  70 
C)  75 
D)  80 
A)  65 
B)  70 
C)  75 
D)  80

Question 2

When the price of a resource is set below equilibrium,

Accepted Answer

A)  excess demand for the resource will occur. 
B)  excess supply of the resource will result. 
C)  the supply of the resource will be inelastic. 
D)  the demand for the resource will be inelastic. 
A)  excess demand for the resource will occur. 
B)  excess supply of the resource will result. 
C)  the supply of the resource will be inelastic. 
D)  the demand for the resource will be inelastic.

Question 3

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 4

Jim Smith runs a company that sells encyclopedia sets for $200 each. When he employs 5 workers, they can sell 20 sets per week, whereas only 17 sets are sold when 4 workers are employed. What is the weekly marginal revenue product of the fifth worker?

Accepted Answer

A)  $3 
B)  $200 
C)  $600 
D)  $4,000 
A)  $3 
B)  $200 
C)  $600 
D)  $4,000

Question 5

Figure 12-1
  
-If one short-run supply curve in Figure 12-1 was for truck drivers and the other was for nuclear physicists (also short-run), which one would probably be the supply curve for physicists?

Accepted Answer

A)  Q₂ 
B)  Q₃ 
C)  Sb 
D)  Sa 
A)  Q₂ 
B)  Q₃ 
C)  Sb 
D)  Sa

Question 6

Harold Brown runs a company that sells encyclopedia sets for $250 each. When he employs 10 workers, they can sell 60 sets per week, while only 54 sets are sold when 9 workers are employed. What is the weekly marginal revenue product of the tenth worker?

Accepted Answer

A)  $250 
B)  $1,250 
C)  $1,500 
D)  $15,000 
A)  $250 
B)  $1,250 
C)  $1,500 
D)  $15,000

Question 7

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 8

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.

Question 9

Cattle manure is an input often used in making fertilizer. Suppose a technique is discovered that can transform cattle manure into quality gasoline. What would happen in the fertilizer industry?

Accepted Answer

This alternative use for manure would ca

Question 10

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 11

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

Accepted Answer

A)  work and wage 
B)  work and leisure 
C)  wage and productivity 
D)  technology and wage 
A)  work and wage 
B)  work and leisure 
C)  wage and productivity 
D)  technology and wage

Question 12

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 13

Which of the following scenarios would serve to decrease the demand for unskilled labor in our country?

Accepted Answer

A)  increased productivity gains among the unskilled laborers. 
B)  increased demand for goods produced by unskilled labor. 
C)  increased international trade with countries where unskilled labor is more plentiful. 
D)  increased supply of migrant workers. 
A)  increased productivity gains among the unskilled laborers. 
B)  increased demand for goods produced by unskilled labor. 
C)  increased international trade with countries where unskilled labor is more plentiful. 
D)  increased supply of migrant workers.

Question 14

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 15

A competitive car wash currently hires 4 workers, who together can wash 80 cars per day. The market price of car washes is $5 per wash, and the price of workers is $60 per day. The car wash should hire a fifth worker if it would increase total production to at least

Accepted Answer

A)  92 cars per day. 
B)  100 cars per day. 
C)  104 cars per day. 
D)  110 cars per day. 
A)  92 cars per day. 
B)  100 cars per day. 
C)  104 cars per day. 
D)  110 cars per day.

Question 16

If unskilled labor is relatively plentiful and cheap in many foreign countries, then as the United States expands its trade with these foreign countries, the domestic demand for

Accepted Answer

A)  unskilled labor will rise and skilled labor will fall. 
B)  skilled labor will rise and unskilled labor will fall. 
C)  both skilled and unskilled labor will rise proportionately. 
D)  both skilled and unskilled labor will be unaffected, assuming no barriers to free trade. 
A)  unskilled labor will rise and skilled labor will fall. 
B)  skilled labor will rise and unskilled labor will fall. 
C)  both skilled and unskilled labor will rise proportionately. 
D)  both skilled and unskilled labor will be unaffected, assuming no barriers to free trade.

Question 17

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

Accepted Answer

A)  an increase in the number of hours worked per week by a worker in an unskilled laboring job 
B)  the purchase of company stock by a worker 
C)  a summer internship at a law firm for someone going to law school 
D)  payments into a retirement pension plan by a skilled laborer 
A)  an increase in the number of hours worked per week by a worker in an unskilled laboring job 
B)  the purchase of company stock by a worker 
C)  a summer internship at a law firm for someone going to law school 
D)  payments into a retirement pension plan by a skilled laborer

Question 18

Because the demand for a resource is highly dependent upon the demand for the final goods that the resource helps produce, the demand for a resource is called a(n)

Accepted Answer

A)  derived demand. 
B)  independent demand. 
C)  declining proportions demand. 
D)  elastic demand. 
A)  derived demand. 
B)  independent demand. 
C)  declining proportions demand. 
D)  elastic demand.

Question 19

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 20

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.

Exam 25: The Supply of and Demand for Productive Resources

Table 12-5 -Refer to Table 12-5. What is the marginal product of the fourth worker?

When the price of a resource is set below equilibrium,

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

Jim Smith runs a company that sells encyclopedia sets for $200 each. When he employs 5 workers, they can sell 20 sets per week, whereas only 17 sets are sold when 4 workers are employed. What is the weekly marginal revenue product of the fifth worker?

Figure 12-1 -If one short-run supply curve in Figure 12-1 was for truck drivers and the other was for nuclear physicists (also short-run), which one would probably be the supply curve for physicists?

Harold Brown runs a company that sells encyclopedia sets for $250 each. When he employs 10 workers, they can sell 60 sets per week, while only 54 sets are sold when 9 workers are employed. What is the weekly marginal revenue product of the tenth worker?

Figure 12-4 -Refer to Figure 12-4. As the number of workers increases,

As the price of a resource decreases,

Cattle manure is an input often used in making fertilizer. Suppose a technique is discovered that can transform cattle manure into quality gasoline. What would happen in the fertilizer industry?

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

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

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

Which of the following scenarios would serve to decrease the demand for unskilled labor in our country?

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

A competitive car wash currently hires 4 workers, who together can wash 80 cars per day. The market price of car washes is $5 per wash, and the price of workers is $60 per day. The car wash should hire a fifth worker if it would increase total production to at least

If unskilled labor is relatively plentiful and cheap in many foreign countries, then as the United States expands its trade with these foreign countries, the domestic demand for

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

Because the demand for a resource is highly dependent upon the demand for the final goods that the resource helps produce, the demand for a resource is called a(n)

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

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

The Economic Approach

A : Some Tools of the Economist

B : Some Tools of the Economist

A : Supply, Demand, and the Market Process

B : Supply, Demand, and the Market Process

A : Supply and Demand: Applications and Extensions

B : Supply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

A : Taking the Nations Economic Pulse

B : Taking the Nations Economic Pulse

Economic Fluctuations, Unemployment, and Inflation

A : an Introduction to Basic Macroeconomic Markets

B : an 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

A : Money and the Banking System

B : Money 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

A : Costs and the Supply of Goods

B : Costs and the Supply of Goods

A : Price Takers and the Competitive Process

B : Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

A : Price-Searcher Markets With High Entry Barriers

B : Price-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

Special Topic 1 : Government Spending and Taxation

Special Topic 2 : The Economics of Social Security

Special Topic 3 : The Stock Market: Its Function, Performance, and Potential as an Investment Opportunity

Special Topic 4 : Great Debates in Economics: Keynes Versus Hayek

Special Topic 5 : The Crisis of 2008: Causes and Lessons for the Future

Special Topic 6 : Lessons from the Great Depression

Special Topic 7 : Lessons from Japan and Canada

Special Topic 8 : The Federal Budget and the National Debt

Special Topic 9 : The Economics of Healthcare

Special Topic 10 : Education: Problems and Performance

Special Topic 11 : Earnings Differences Between Men and Women

Special Topic 12 : Do Labor Unions Increase the Wages of Workers?

Special Topic 13 : The Question of Resource Exhaustion

Special Topic 14 : Difficult Environmental Cases and the Role of Government

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