Answer the question on the basis of the following marginal product data for resources a and b.The output of these independent resources sells in a purely competitive market at $1 per unit. $\begin{array}{ccc} \begin{array}{ccc} \text { Inputs } \\ \text { of a } & & \mathrm{MP}_{\mathrm{a}} \\ \hline 1 & & 25 \\ 2 & & 20 \\ 3 & & 15 \\ 4 & & 10 \\ 5 & & 5 \\ 6 & & 2 \\ 7 & & 1 \end{array} \begin{array}{c} \begin{array}{c} \text { Inputs } \\ \text { of } b \end{array} & & M P_{b} \\ \hline 1 & & 40 \\ 2 & & 36 \\ 3 & & 32 \\ 4 & & 24 \\ 5 & & 20 \\ 6 & & 16 \\ 7 & & 8 \end{array} \end{array}$ Refer to the given data.Assume now that the prices of a and b are $15 and $20 respectively.To maximize profits,what combination of a and b should the employer hire?

A) 3 of a and 5 of b. B) 5 of a and 7 of b. C) 7 of a and 7 of b. D) 6 of a and 2 of b. A) 3 of a and 5 of b. B) 5 of a and 7 of b. C) 7 of a and 7 of b. D) 6 of a and 2 of b.

Answer the question on the basis of the following information for Manfred's Shoe Shine Parlor.Assume Manfred hires labor,its only variable input,under purely competitive conditions.Shoe shines are also sold competitively. $\begin{array}{c} \begin{array}{c} \text {Units of}\\ \underline{\text {Labor}}\\ 0\\ 1\\ 2\\ 3\\ 4\\ 5\\ 6\\ 7 \end{array} \begin{array}{c} \text {Total}\\ \underline{\text {Product}}\\ 0\\ 14\\ \\ 30\\ 35\\ 39\\ \\ 44 \end{array} \begin{array}{c} \text {Marginal}\\ \underline{\text {Product}}\\ \\ 14\\ 10\\ \\ \\ \\ \\ 2 \end{array} \begin{array}{c} \text {Total}\\ \underline{\text {Revenue}}\\ \\ \$ 42 \\ \\ 90\\ \\ 117\\ 126\\ 132 \end{array} \end{array}$ Refer to the given data.If the wage rate is $11 and Manfred's only fixed input is capital,the total cost of which is $30,then what will be his economic profit?

A) $62. B) $42. C) $28. D) $32. A) $62. B) $42. C) $28. D) $32.

Answer the question on the basis of the following information for Manfred's Shoe Shine Parlor.Assume Manfred hires labor,its only variable input,under purely competitive conditions.Shoe shines are also sold competitively. $\begin{array}{c} \begin{array}{c} \text {Units of}\\ \underline{\text {Labor}}\\ 0\\ 1\\ 2\\ 3\\ 4\\ 5\\ 6\\ 7 \end{array} \begin{array}{c} \text {Total}\\ \underline{\text {Product}}\\ 0\\ 14\\ \\ 30\\ 35\\ 39\\ \\ 44 \end{array} \begin{array}{c} \text {Marginal}\\ \underline{\text {Product}}\\ \\ 14\\ 10\\ \\ \\ \\ \\ 2 \end{array} \begin{array}{c} \text {Total}\\ \underline{\text {Revenue}}\\ \\ \$ 42 \\ \\ 90\\ \\ 117\\ 126\\ 132 \end{array} \end{array}$ Refer to the given data.How many units of output are produced when 2 workers are employed?

A) 4. B) 16. C) 24. D) 10. A) 4. B) 16. C) 24. D) 10.

Exam 15: The Demand for Resources

Answer the question on the basis of the following marginal product data for resources a and b.The output of these independent resources sells in a purely competitive market at $1 per unit. Inputs of a 1 25 2 20 3 15 4 10 5 5 6 2 7 1 Inputs of b M 1 40 2 36 3 32 4 24 5 20 6 16 7 8 Refer to the given data.Assume now that the prices of a and b are $15 and $20 respectively.To maximize profits,what combination of a and b should the employer hire?

(Multiple Choice)

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Question 21

Other things equal,the resource demand curve of an imperfectly competitive seller will:

(Multiple Choice)

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Question 22

Marginal revenue product measures the:

(Multiple Choice)

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Question 23

The MRP curve for labor:

(Multiple Choice)

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Question 24

Suppose a technological improvement increases the productivity of a firm's capital and,simultaneously,its workers' union negotiates a wage increase.We can predict that:

(Multiple Choice)

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Question 25

If the price of capital declines,the consequent output effect would be:

(Multiple Choice)

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Question 26

The MRP of labor curve is the firm's labor demand curve.

(True/False)

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Question 27

A firm will find it profitable to hire workers up to the point at which their:

(Multiple Choice)

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Question 28

A competitive employer is using labor in such an amount that labor's MRP is $10 and its wage rate is $8.This firm:

(Multiple Choice)

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Question 29

Elasticity of resource demand is measured by the:

(Multiple Choice)

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Question 30

The marginal productivity theory of income distribution suggests that:

(Multiple Choice)

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Question 31

The marginal productivity theory of income distribution has been criticized because:

(Multiple Choice)

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Question 32

Answer the question on the basis of the following information for Manfred's Shoe Shine Parlor.Assume Manfred hires labor,its only variable input,under purely competitive conditions.Shoe shines are also sold competitively. Units of 0 1 2 3 4 5 6 7 Total 0 14 30 35 39 44 Marginal 14 10 2 Total \ 42 90 117 126 132 Refer to the given data.If the wage rate is $11 and Manfred's only fixed input is capital,the total cost of which is $30,then what will be his economic profit?

(Multiple Choice)

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Question 33

Answer the question on the basis of the following information for Manfred's Shoe Shine Parlor.Assume Manfred hires labor,its only variable input,under purely competitive conditions.Shoe shines are also sold competitively. Units of 0 1 2 3 4 5 6 7 Total 0 14 30 35 39 44 Marginal 14 10 2 Total \ 42 90 117 126 132 Refer to the given data.How many units of output are produced when 2 workers are employed?

(Multiple Choice)

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Question 34

If MP_a/P_a = MP_b/P_b and MRP_a/P_a = MRP_b/P_b > 1,this firm is:

(Multiple Choice)

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Question 35

A change in an input price will alter both production costs and the profit-maximizing output.Thus,a decline in the price of capital will reduce production costs,increase the profit-maximizing output,and thereby increase the demand for labor.This describes the:

(Multiple Choice)

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Question 36

Hiring the least-costly combination of resources ensures that profits will be maximized.

(True/False)

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Question 37

The general rule for hiring any input (say,labor)in the profit-maximizing amount is MRC = MRP.This rule takes the special form W = MRP (where W is the wage rate)when the:

(Multiple Choice)

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Question 38

Answer the question on the basis of the following information: Suppose a firm hires both labor (L)and capital (C)under purely competitive conditions.The price of labor is P_L and that of capital is P_C.The marginal product of labor is MP_L and that of capital is MP_C.The firm sells its product competitively at a price of P_X. Refer to the given information.Which of the following must pertain if the firm is to minimize the cost of producing any output?

(Multiple Choice)

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Question 39

Other things equal,the less competitive the market in which a firm sells its product,the less elastic will be its resource demand curve.

(True/False)

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Question 40

Other things equal,the resource demand curve of an imperfectly competitive seller will:

Marginal revenue product measures the:

The MRP curve for labor:

Suppose a technological improvement increases the productivity of a firm's capital and,simultaneously,its workers' union negotiates a wage increase.We can predict that:

If the price of capital declines,the consequent output effect would be:

The MRP of labor curve is the firm's labor demand curve.

A firm will find it profitable to hire workers up to the point at which their:

A competitive employer is using labor in such an amount that labor's MRP is $10 and its wage rate is $8.This firm:

Elasticity of resource demand is measured by the:

The marginal productivity theory of income distribution suggests that:

The marginal productivity theory of income distribution has been criticized because:

If MP_a/P_a = MP_b/P_b and MRP_a/P_a = MRP_b/P_b > 1,this firm is:

A change in an input price will alter both production costs and the profit-maximizing output.Thus,a decline in the price of capital will reduce production costs,increase the profit-maximizing output,and thereby increase the demand for labor.This describes the:

Hiring the least-costly combination of resources ensures that profits will be maximized.

The general rule for hiring any input (say,labor)in the profit-maximizing amount is MRC = MRP.This rule takes the special form W = MRP (where W is the wage rate)when the:

Other things equal,the less competitive the market in which a firm sells its product,the less elastic will be its resource demand curve.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

Technology RD and Efficiency

Wage Determination

Rent Interest and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters

Exam 15: The Demand for Resources

Other things equal,the resource demand curve of an imperfectly competitive seller will:

Marginal revenue product measures the:

The MRP curve for labor:

Suppose a technological improvement increases the productivity of a firm's capital and,simultaneously,its workers' union negotiates a wage increase.We can predict that:

If the price of capital declines,the consequent output effect would be:

The MRP of labor curve is the firm's labor demand curve.

A firm will find it profitable to hire workers up to the point at which their:

A competitive employer is using labor in such an amount that labor's MRP is $10 and its wage rate is $8.This firm:

Elasticity of resource demand is measured by the:

The marginal productivity theory of income distribution suggests that:

The marginal productivity theory of income distribution has been criticized because:

If MPa/Pa = MPb/Pb and MRPa/Pa = MRPb/Pb > 1,this firm is:

A change in an input price will alter both production costs and the profit-maximizing output.Thus,a decline in the price of capital will reduce production costs,increase the profit-maximizing output,and thereby increase the demand for labor.This describes the:

Hiring the least-costly combination of resources ensures that profits will be maximized.

The general rule for hiring any input (say,labor)in the profit-maximizing amount is MRC = MRP.This rule takes the special form W = MRP (where W is the wage rate)when the:

Other things equal,the less competitive the market in which a firm sells its product,the less elastic will be its resource demand curve.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

Technology RD and Efficiency

Wage Determination

Rent Interest and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters

If MP_a/P_a = MP_b/P_b and MRP_a/P_a = MRP_b/P_b > 1,this firm is: