Question 1

The skills of labor are called human capital.

Accepted Answer

A) True 
 B)False

Question 2

Monopsonistic exploitation occurs in any situation in which a factor of production is paid ______________ the value of its MRP.

Accepted Answer

A)  the same as 
B)  less than 
C)  more than 
A)  the same as 
B)  less than 
C)  more than

Question 3

A firm with 3 workers produces 8 units of output. When the firm hires 1 additional worker, output increases to 12 units of output. MPP is equal to

Accepted Answer

A)  4 units 
B)  12 units 
C)  1 unit 
A)  4 units 
B)  12 units 
C)  1 unit

Question 4

Exhibit 26-1
 
-Refer to Exhibit 26-1. Which point represents no consumption in the present, saving everything for the future?

Accepted Answer

A)  A 
B)  B 
C)  C 
A)  A 
B)  B 
C)  C

Question 5

Describe the two ways that an entrepreneur can obtain funds to build capital equipment and how the entrepreneur decides whether or not to invest.

Accepted Answer

To build capital equipment, an entrepren

Question 6

Evaluate the alternating offer sequential bargaining institution.

Accepted Answer

Evidence from the Neelin, Sonnenschein,

Question 7

If entrepreneur Anita Matsumi invests her own money to build capital equipment for her jam-making business, that investment incurs

Accepted Answer

A)  an opportunity cost 
B)  no cost 
C)  only a small filing fee 
A)  an opportunity cost 
B)  no cost 
C)  only a small filing fee

Question 8

Let C = the cost of capital investment today and R₁ = the return in one year. The rate of return on the investment equals

Accepted Answer

A)  (R1 /
C)  - 1 
B)  R1 
C)  R1 /(1 + π) 
A)  (R1 /
C)  - 1 
B)  R1 
C)  R1 /(1 + π)

Question 9

For most firms, the revenues the firms earn are _______________ the total wages the firms pay their workers.

Accepted Answer

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

Question 10

When the total number of periods in the alternating offer sequential bargaining game is finite, there is a unique subgame perfect equilibrium in which the first offer made is accepted. The equilibrium offer is equal to the sum of the decrements in the pie when the first player makes her or his offer. This description is the

Accepted Answer

A)  pie exhaustion theorem 
B)  alternating offer sequential bargaining equilibrium theorem 
C)  marginal productivity theorem 
A)  pie exhaustion theorem 
B)  alternating offer sequential bargaining equilibrium theorem 
C)  marginal productivity theorem

Question 11

The change in a firm's total wage bill that results from its hiring of one additional unit of labor is called

Accepted Answer

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

Question 12

In the real world, all markets __________ perfectly competitive.

Accepted Answer

A)  are 
B)  are not 
C)  must be 
A)  are 
B)  are not 
C)  must be

Question 13

The return on a factor above the amount necessary to entice that factor into the production process is called rent.

Accepted Answer

A) True 
 B)False

Question 14

Demand for labor that is derived from the process of profit maximization is called derived demand.

Accepted Answer

A) True 
 B)False

Question 15

Compared to the interest that an entrepreneur must pay on a loan or the opportunity cost of using her or his own funds, the entrepreneur's return on capital must be

Accepted Answer

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

Question 16

The MPP curve tells us how much extra output, in physical units, will be produced as the firm adds more and more units of labor.

Accepted Answer

A) True 
 B)False

Question 17

One interpretation of the Neelin, Sonnenschein, Spiegel experiment is that the subjects were able to perform backward induction when the horizon of a game was only

Accepted Answer

A)  five periods 
B)  two periods 
C)  three periods 
A)  five periods 
B)  two periods 
C)  three periods

Question 18

Total expenditure is the change in a firm's total wage bill that results from its hiring of one additional unit of labor.

Accepted Answer

A) True 
 B)False

Question 19

Demand for labor comes from individual

Accepted Answer

A)  workers 
B)  firms 
C)  consumers 
A)  workers 
B)  firms 
C)  consumers

Question 20

Monopsonistic exploitation occurs in any situation in which a factor of production is paid the same as the value of its MRP.

Accepted Answer

A) True 
 B)False

Exam 26: Input Markets and the Origins of Class Conflict

The skills of labor are called human capital.

Monopsonistic exploitation occurs in any situation in which a factor of production is paid ______________ the value of its MRP.

A firm with 3 workers produces 8 units of output. When the firm hires 1 additional worker, output increases to 12 units of output. MPP is equal to

Exhibit 26-1 -Refer to Exhibit 26-1. Which point represents no consumption in the present, saving everything for the future?

Describe the two ways that an entrepreneur can obtain funds to build capital equipment and how the entrepreneur decides whether or not to invest.

Evaluate the alternating offer sequential bargaining institution.

If entrepreneur Anita Matsumi invests her own money to build capital equipment for her jam-making business, that investment incurs

Let C = the cost of capital investment today and R₁ = the return in one year. The rate of return on the investment equals

For most firms, the revenues the firms earn are _______________ the total wages the firms pay their workers.

The change in a firm's total wage bill that results from its hiring of one additional unit of labor is called

In the real world, all markets __________ perfectly competitive.

The return on a factor above the amount necessary to entice that factor into the production process is called rent.

Demand for labor that is derived from the process of profit maximization is called derived demand.

Compared to the interest that an entrepreneur must pay on a loan or the opportunity cost of using her or his own funds, the entrepreneur's return on capital must be

The MPP curve tells us how much extra output, in physical units, will be produced as the firm adds more and more units of labor.

One interpretation of the Neelin, Sonnenschein, Spiegel experiment is that the subjects were able to perform backward induction when the horizon of a game was only

Total expenditure is the change in a firm's total wage bill that results from its hiring of one additional unit of labor.

Demand for labor comes from individual

Monopsonistic exploitation occurs in any situation in which a factor of production is paid the same as the value of its MRP.

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