Question 1

A firm not paying the same wage rate on all units of labor it employs is known as

Accepted Answer

A)  smart business operations 
B)  wage discrimination 
C)  illegal behavior 
A)  smart business operations 
B)  wage discrimination 
C)  illegal behavior B

Question 2

A typical labor supply curve shows that, as the wage rate ____________, a worker will choose to devote _______ hours to labor.

Accepted Answer

A)  increases, less 
B)  increases, more 
C)  decreases, more 
A)  increases, less 
B)  increases, more 
C)  decreases, more B

Question 3

The distribution across the factors of production is called the

Accepted Answer

A)  Pareto-optimal distribution of income 
B)  functional distribution of income 
C)  marginal distribution of income 
A)  Pareto-optimal distribution of income 
B)  functional distribution of income 
C)  marginal distribution of income B

Question 4

At the equilibrium of the market for loanable funds, the marginal rate of return is just equal to the

Accepted Answer

A)  rate of return on the last profitable project undertaken by society 
B)  market rate of interest 
C)  Both answers are correct 
A)  rate of return on the last profitable project undertaken by society 
B)  market rate of interest 
C)  Both answers are correct

Question 5

According to the product exhaustion theorem, when all the factors of production are paid the value of what they produce, then at the long-run equilibrium of a perfectly competitive economy, the sum of their shares of the value of the socially produced pie must equal

Accepted Answer

A)  100 
B)  1/3 
C)  1 
A)  100 
B)  1/3 
C)  1

Question 6

The sum of the individual supply curves for all the people who have savings available for investment is the

Accepted Answer

A)  market supply curve for loanable funds 
B)  market supply curve for labor 
C)  MRS between consumption today and tomorrow 
A)  market supply curve for loanable funds 
B)  market supply curve for labor 
C)  MRS between consumption today and tomorrow

Question 7

The optimal quantity of labor rule indicates that a profit-maximizing firm will hire labor up to the point at which the marginal revenue product it receives from the last unit of labor hired is equal to one half the marginal cost of labor.

Accepted Answer

A) True 
 B)False

Question 8

The optimal quantity of labor rule indicates that a profit-maximizing firm will hire labor up to the point at which the MRP it receives from the last unit of labor hired is _______________ the MC of labor.

Accepted Answer

A)  equal to 
B)  greater than 
C)  less than 
A)  equal to 
B)  greater than 
C)  less than

Question 9

Why is the price of land entirely determined by the demand curve?

Accepted Answer

The supply of land is perfectly inelasti

Question 10

How is the equilibrium labor market wage determined?

Accepted Answer

The equilibrium wage rate for the labor

Question 11

The total wage a monopsonist pays for labor is known as

Accepted Answer

A)  marginal expenditure 
B)  total expenditure 
C)  average expenditure 
A)  marginal expenditure 
B)  total expenditure 
C)  average expenditure

Question 12

An alternating offer sequential bargaining institution is a structured method of bargaining where each bargainer takes turns making offers. If an offer is accepted, the bargaining stops. If the offer is not accepted, the bargaining proceeds to the next round but, due to the delay, the value of what is being bargained over shrinks.

Accepted Answer

A) True 
 B)False

Question 13

The demand curve for labor at a single firm is the same as the firm's marginal

Accepted Answer

A)  physical product curve 
B)  cost curve 
C)  revenue product curve 
A)  physical product curve 
B)  cost curve 
C)  revenue product curve

Question 14

Why might workers and owners disagree about the fraction of revenues that should be paid to workers as wages?

Accepted Answer

When the market determines the wage rate

Question 15

When a bilateral monopoly exists, the actual market wage will depend on the

Accepted Answer

A)  intersection of supply and demand 
B)  marginal expenditure and marginal revenue 
C)  intangible bargaining power of the two parties 
A)  intersection of supply and demand 
B)  marginal expenditure and marginal revenue 
C)  intangible bargaining power of the two parties

Question 16

Marginal productivity theory states how free-market economies determine the returns on the factors of production, whereby each factor is paid its marginal

Accepted Answer

A)  revenue product 
B)  revenue 
C)  physical product 
A)  revenue product 
B)  revenue 
C)  physical product

Question 17

A firm's marginal physical product the new workers will produce times the marginal revenue the additional units of output will earn is known as marginal revenue product.

Accepted Answer

A) True 
 B)False

Question 18

A market with only one seller and one buyer is a bilateral monopoly.

Accepted Answer

A) True 
 B)False

Question 19

A monopsony is a market with a single

Accepted Answer

A)  seller 
B)  buyer 
C)  firm 
A)  seller 
B)  buyer 
C)  firm

Question 20

Demand for loanable funds arises from

Accepted Answer

A)  current or potential producers who need the funds to purchase capital goods 
B)  individual consumers who save a portion of their income and deposit that portion in a bank 
C)  Both answers are correct 
A)  current or potential producers who need the funds to purchase capital goods 
B)  individual consumers who save a portion of their income and deposit that portion in a bank 
C)  Both answers are correct

Exam 26: Input Markets and the Origins of Class Conflict

A firm not paying the same wage rate on all units of labor it employs is known as

A typical labor supply curve shows that, as the wage rate ____________, a worker will choose to devote _______ hours to labor.

The distribution across the factors of production is called the

At the equilibrium of the market for loanable funds, the marginal rate of return is just equal to the

According to the product exhaustion theorem, when all the factors of production are paid the value of what they produce, then at the long-run equilibrium of a perfectly competitive economy, the sum of their shares of the value of the socially produced pie must equal

The sum of the individual supply curves for all the people who have savings available for investment is the

The optimal quantity of labor rule indicates that a profit-maximizing firm will hire labor up to the point at which the marginal revenue product it receives from the last unit of labor hired is equal to one half the marginal cost of labor.

The optimal quantity of labor rule indicates that a profit-maximizing firm will hire labor up to the point at which the MRP it receives from the last unit of labor hired is _______________ the MC of labor.

Why is the price of land entirely determined by the demand curve?

How is the equilibrium labor market wage determined?

The total wage a monopsonist pays for labor is known as

The demand curve for labor at a single firm is the same as the firm's marginal

Why might workers and owners disagree about the fraction of revenues that should be paid to workers as wages?

When a bilateral monopoly exists, the actual market wage will depend on the

Marginal productivity theory states how free-market economies determine the returns on the factors of production, whereby each factor is paid its marginal

A firm's marginal physical product the new workers will produce times the marginal revenue the additional units of output will earn is known as marginal revenue product.

A market with only one seller and one buyer is a bilateral monopoly.

A monopsony is a market with a single

Demand for loanable funds arises from

Economics and Institutions: a Shift of Emphasis

Consumers and Their Preferences

Utilities Indifference Curves

Demand and Behavior in Markets

Some Applications of Consumer Demand, and Welfare Analysis

Uncertainty and the Emergence of Insurance

Uncertainty Applications and Criticisms

The Discovery of Production and Its Technology

Cost and Choice

Cost Curves

Game Theory and the Tools of Strategic Business Analysis

Decision Making Over Time

The Internal Organization of the Firm

Perfectly Competitive Markets: Short-Run Analysis

Competitive Markets in the Long Run

Market Institutions and Auctions

The Age of Entrepreneurship: Monopoly

Natural Monopoly and the Economics of Regulation

The World of Oligopoly: Preliminaries to Successful Entry

Market Entry and the Emergence of Perfect Competition

The Problem of Exchange

General Equilibrium and the Origins of the Free Market and Interventionist Ideologies

Moral Hazard and Adverse Selection: Informational Market Failures

Externalities: the Free Market Interventionist Battle Continues

Public Goods, the Consequences of Strategic Voting Behavior, and the Role of Government

Filters

A typical labor supply curve shows that, as the wage rate ______, a worker will choose to devote _ hours to labor.