Question 1

A consumption bundle

Accepted Answer

A)  is a particular combination of consumption and leisure. 
B)  only measures a quantity of goods and services, but not the amount of leisure. 
C)  is a method of bringing home consumption goods. 
D)  measures the quality of a particular good. 
A)  is a particular combination of consumption and leisure. 
B)  only measures a quantity of goods and services, but not the amount of leisure. 
C)  is a method of bringing home consumption goods. 
D)  measures the quality of a particular good.

Question 2

Of the following,which is the least likely example of an increase in total factor productivity?

Accepted Answer

A)  the introduction of the assembly line 
B)  an increase in immigration 
C)  good weather 
D)  a reduction in the relative price of energy 
A)  the introduction of the assembly line 
B)  an increase in immigration 
C)  good weather 
D)  a reduction in the relative price of energy

Question 3

The assumption that the marginal product of labor decreases as the labor input increases implies that

Accepted Answer

A)  output decreases as the labor input increases. 
B)  the wage increases as the labor input increases. 
C)  the production function is concave. 
D)  the production function shifts upward. 
A)  output decreases as the labor input increases. 
B)  the wage increases as the labor input increases. 
C)  the production function is concave. 
D)  the production function shifts upward.

Question 4

The vertical intercept of the consumer's budget line is equal to

Accepted Answer

A)  h + .   
B)  wh +   - T. 
C)  c + w(l - h). 
D)    - T. 
A)  h + .   
B)  wh +   - T. 
C)  c + w(l - h). 
D)    - T.

Question 5

The construct of a representative firm is most helpful in describing the behavior of all of the firms in the economy when

Accepted Answer

A)  there are constant returns to scale. 
B)  there are increasing returns to scale. 
C)  there are decreasing returns to scale. 
D)  the marginal product of labor is increasing in the amount of labor input. 
A)  there are constant returns to scale. 
B)  there are increasing returns to scale. 
C)  there are decreasing returns to scale. 
D)  the marginal product of labor is increasing in the amount of labor input.

Question 6

At the optimal consumption bundle,the marginal rate of substitution of leisure for consumption is equal to

Accepted Answer

A)  the real wage and the budget line is tangent to an indifference curve. 
B)  minus the real wage and the budget line is tangent to the indifference curve. 
C)  the real wage and the budget line intersects the indifference curve. 
D)  minus the real wage and the budget line intersects the indifference curve. 
A)  the real wage and the budget line is tangent to an indifference curve. 
B)  minus the real wage and the budget line is tangent to the indifference curve. 
C)  the real wage and the budget line intersects the indifference curve. 
D)  minus the real wage and the budget line intersects the indifference curve.

Question 7

Capital,K,includes

Accepted Answer

A)  money. 
B)  machinery. 
C)  business loans. 
D)  know-how. 
A)  money. 
B)  machinery. 
C)  business loans. 
D)  know-how.

Question 8

If the firm hires more labor,everything else held constant,then

Accepted Answer

A)  the marginal product of labor falls. 
B)  output decreases. 
C)  there is an increase in the marginal product of labor. 
D)  total factor productivity falls. 
A)  the marginal product of labor falls. 
B)  output decreases. 
C)  there is an increase in the marginal product of labor. 
D)  total factor productivity falls.

Question 9

Saying the consumer is rational means

Accepted Answer

A)  the consumer is a stand-in for all consumers. 
B)  the consumer is getting rationed. 
C)  the consumer makes reasonable choices. 
D)  the consumer makes the best choices. 
A)  the consumer is a stand-in for all consumers. 
B)  the consumer is getting rationed. 
C)  the consumer makes reasonable choices. 
D)  the consumer makes the best choices.

Question 10

We use indifference curves because

Accepted Answer

A)  households on average do not care. 
B)  they help represent preferences. 
C)  households sometimes make mistakes. 
D)  they formalize the production process. 
A)  households on average do not care. 
B)  they help represent preferences. 
C)  households sometimes make mistakes. 
D)  they formalize the production process.

Question 11

The preferences of the representative consumer over consumption and leisure are represented by use of a

Accepted Answer

A)  production function. 
B)  utility function. 
C)  benefit function. 
D)  preference function. 
A)  production function. 
B)  utility function. 
C)  benefit function. 
D)  preference function.

Question 12

In the (consumption,leisure)space,indifference curves as we have assumed them have the property of presenting the highest levels of satisfaction

Accepted Answer

A)  in the north-east corner. 
B)  in the south-east corner. 
C)  in the north-west corner. 
D)  in the south-west corner. 
A)  in the north-east corner. 
B)  in the south-east corner. 
C)  in the north-west corner. 
D)  in the south-west corner.

Question 13

Two key properties of indifference curves are that an indifference curve slopes

Accepted Answer

A)  upward and is bowed out from the origin. 
B)  downward and is bowed out from the origin. 
C)  upward and is bowed in toward the origin. 
D)  downward and is bowed in toward the origin. 
A)  upward and is bowed out from the origin. 
B)  downward and is bowed out from the origin. 
C)  upward and is bowed in toward the origin. 
D)  downward and is bowed in toward the origin.

Question 14

If labor supply is increasing in the real wage,then

Accepted Answer

A)  the substitution effect is larger than the income effect. 
B)  the income effect is larger than the substitution effect. 
C)  the production function is increasing in labor. 
D)  the marginal product of labor is decreasing. 
A)  the substitution effect is larger than the income effect. 
B)  the income effect is larger than the substitution effect. 
C)  the production function is increasing in labor. 
D)  the marginal product of labor is decreasing.

Question 15

The goal of the representative firm is to

Accepted Answer

A)  hire as much labor as possible. 
B)  maximize revenue. 
C)  minimize labor costs. 
D)  maximize profits. 
A)  hire as much labor as possible. 
B)  maximize revenue. 
C)  minimize labor costs. 
D)  maximize profits.

Question 16

An increase in real dividend income minus taxes represents

Accepted Answer

A)  a pure substitution effect. 
B)  a pure income effect. 
C)  a combination of income and substitution effects. 
D)  neither a pure income effect nor a pure substitution effect. 
A)  a pure substitution effect. 
B)  a pure income effect. 
C)  a combination of income and substitution effects. 
D)  neither a pure income effect nor a pure substitution effect.

Question 17

A good is inferior for a consumer if

Accepted Answer

A)  it is never included in his or her consumption bundle. 
B)  its consumption rises when income rises. 
C)  its consumption falls when income rises. 
D)  some minimal level of the good must be consumed to assure the consumer's survival. 
A)  it is never included in his or her consumption bundle. 
B)  its consumption rises when income rises. 
C)  its consumption falls when income rises. 
D)  some minimal level of the good must be consumed to assure the consumer's survival.

Question 18

We assume leisure is a normal good. This implies that

Accepted Answer

A)  an increase in taxes decreases the demand for leisure. 
B)  households maximize utility. 
C)  preferences over consumption are well defined. 
D)  an increase in the wage increases demand for leisure. 
A)  an increase in taxes decreases the demand for leisure. 
B)  households maximize utility. 
C)  preferences over consumption are well defined. 
D)  an increase in the wage increases demand for leisure.

Question 19

In the production function,Y = zF(K,N?),total factor productivity is

Accepted Answer

A)  Y/K. 
B)  Y/N?. 
C)  F/Y. 
D)  z. 
A)  Y/K. 
B)  Y/N?. 
C)  F/Y. 
D)  z.

Question 20

The questions below deal with the Widget Company, which produces widgets according to the following table.
  
-The marginal product of the second widget worker hired is

Accepted Answer

A)  2. 
B)  8. 
C)  10. 
D)  12. 
A)  2. 
B)  8. 
C)  10. 
D)  12.

A consumption bundle

Of the following,which is the least likely example of an increase in total factor productivity?

The assumption that the marginal product of labor decreases as the labor input increases implies that

The vertical intercept of the consumer's budget line is equal to

The construct of a representative firm is most helpful in describing the behavior of all of the firms in the economy when

At the optimal consumption bundle,the marginal rate of substitution of leisure for consumption is equal to

Capital,K,includes

If the firm hires more labor,everything else held constant,then

Saying the consumer is rational means

We use indifference curves because

The preferences of the representative consumer over consumption and leisure are represented by use of a

In the (consumption,leisure)space,indifference curves as we have assumed them have the property of presenting the highest levels of satisfaction

Two key properties of indifference curves are that an indifference curve slopes

If labor supply is increasing in the real wage,then

The goal of the representative firm is to

An increase in real dividend income minus taxes represents

A good is inferior for a consumer if

We assume leisure is a normal good. This implies that

In the production function,Y = zF(K,N?),total factor productivity is

The questions below deal with the Widget Company, which produces widgets according to the following table. -The marginal product of the second widget worker hired is

Introduction

Measurement

Business Cycle Measurement

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption-Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters

Exam 4: Consumer and Firm Behavior: The Work-Leisure Decision and Profit Maximization

A consumption bundle

Of the following,which is the least likely example of an increase in total factor productivity?

The assumption that the marginal product of labor decreases as the labor input increases implies that

The vertical intercept of the consumer's budget line is equal to

The construct of a representative firm is most helpful in describing the behavior of all of the firms in the economy when

At the optimal consumption bundle,the marginal rate of substitution of leisure for consumption is equal to

Capital,K,includes

If the firm hires more labor,everything else held constant,then

Saying the consumer is rational means

We use indifference curves because

The preferences of the representative consumer over consumption and leisure are represented by use of a

In the (consumption,leisure)space,indifference curves as we have assumed them have the property of presenting the highest levels of satisfaction

Two key properties of indifference curves are that an indifference curve slopes

If labor supply is increasing in the real wage,then

The goal of the representative firm is to

An increase in real dividend income minus taxes represents

A good is inferior for a consumer if

We assume leisure is a normal good. This implies that

In the production function,Y = zF(K,N?),total factor productivity is

The questions below deal with the Widget Company, which produces widgets according to the following table. -The marginal product of the second widget worker hired is

Introduction

Measurement

Business Cycle Measurement

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption-Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters