Question 1

The labor demand curve of a purely competitive seller:

Accepted Answer

A)  slopes downward because the firm must lower price to sell more output. 
B)  slopes downward because labor productivity increases as successive workers are hired. 
C)  is perfectly elastic because the firm is hiring an insignificant portion of the total labor supply. 
D)  slopes downward because the marginal product of successive workers declines. 
A)  slopes downward because the firm must lower price to sell more output. 
B)  slopes downward because labor productivity increases as successive workers are hired. 
C)  is perfectly elastic because the firm is hiring an insignificant portion of the total labor supply. 
D)  slopes downward because the marginal product of successive workers declines.

Question 2

Which of the following occupations is projected to be the fastest growing in the U.S.in terms of percentage increases?

Accepted Answer

A)  Medical assistants. 
B)  Biomedical engineers. 
C)  Personal care aides. 
D)  Software engineers. 
A)  Medical assistants. 
B)  Biomedical engineers. 
C)  Personal care aides. 
D)  Software engineers.

Question 3

Answer the question on the basis of the information given in the following table: $\begin{array}{c}
\begin{array}{c}
\
Employment\
\hline
0\
1 \
2 \
3 \
4 \
5 \
6
\end{array}
\begin{array}{c}
Total\
Product\
\hline
0\
12\
22\
30\
36\
40\
42\
\end{array}
\begin{array}{c}
\text { Product }\
\text { Price } \
\hline \$ 3 \
3 \
3 \
3 \
3 \
3 \
3
\end{array}
\end{array}$ Refer to the given data.If the firm is hiring workers under purely competitive conditions at a wage rate of $10,it will employ:

Accepted Answer

A)  2 workers. 
B)  3 workers. 
C)  4 workers. 
D)  5 workers. 
A)  2 workers. 
B)  3 workers. 
C)  4 workers. 
D)  5 workers.

Question 4

The elasticity of resource demand will be greater the:

Accepted Answer

A)  smaller the portion of the product's total costs accounted for by the resource. 
B)  less the elasticity of demand for the product it is producing. 
C)  easier it is to substitute other resources in production. 
D)  less the elasticity of resource supply. 
A)  smaller the portion of the product's total costs accounted for by the resource. 
B)  less the elasticity of demand for the product it is producing. 
C)  easier it is to substitute other resources in production. 
D)  less the elasticity of resource supply.

Question 5

Answer the question on the basis of the data contained in the following table.Assume that the firm is hiring labor in a purely competitive market. $\begin{array}{ccc}
\begin{array}{ccc}
\begin{array}{c}
\text { Units of } \
\text { Labor }\
\hline
\end{array} && \begin{array}{c}
\text { Total } \
\text { Product }\
\hline
\end{array} \
0 & & 0 \
1 & & 15 \
2 & & 28 \
3 & & 39 \
4 & & 48 \
5 & & 55 \
6 & & 60
\end{array}
\begin{array}{c}
Product\
Price\
\hline
 \$ 2.20\ 
 2.00 \
 1.80 \
 1.60 \
1.40 \
 1.20 \
 1.10 
\end{array}
\end{array}$ Refer to the given data.If the wage rate is $20,how many workers will the firm choose to employ?

Accepted Answer

A)  5. 
B)  4. 
C)  3. 
D)  2. 
A)  5. 
B)  4. 
C)  3. 
D)  2.

Question 6

Answer the question on the basis of the information given in the following table: $\begin{array}{c}
\begin{array}{c}
\
Employment\
\hline
0\
1 \
2 \
3 \
4 \
5 \
6
\end{array}
\begin{array}{c}
Total\
Product\
\hline
0\
12\
22\
30\
36\
40\
42\
\end{array}
\begin{array}{c}
\text { Product }\
\text { Price } \
\hline \$ 3 \
3 \
3 \
3 \
3 \
3 \
3
\end{array}
\end{array}$ Refer to the given data.This firm is:

Accepted Answer

A)  selling its product in a purely competitive market. 
B)  selling its product in an imperfectly competitive market. 
C)  hiring workers in a purely competitive market. 
D)  hiring workers in an imperfectly competitive market. 
A)  selling its product in a purely competitive market. 
B)  selling its product in an imperfectly competitive market. 
C)  hiring workers in a purely competitive market. 
D)  hiring workers in an imperfectly competitive market.

Question 7

When the elasticity coefficient for resource demand is less than one,resource demand is:

Accepted Answer

A)  inelastic. 
B)  elastic. 
C)  unit-elastic. 
D)  infinitely elastic. 
A)  inelastic. 
B)  elastic. 
C)  unit-elastic. 
D)  infinitely elastic.

Question 8

Answer the question on the basis of the following information: Harry owns a barber shop and charges $6 per haircut.By hiring one barber at $10 per hour,the shop can provide 24 haircuts per eight-hour day.By hiring a second barber at the same wage rate,the shop can now provide a total of 42 haircuts per day. Refer to the given information.The MP of the second barber is:

Accepted Answer

A)  $240. 
B)  $108. 
C)  18 haircuts. 
D)  42 haircuts. 
A)  $240. 
B)  $108. 
C)  18 haircuts. 
D)  42 haircuts.

Question 9

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.At what price does each shoe shine sell?

Accepted Answer

A)  $1. 
B)  $2. 
C)  $3. 
D)  $2.50. 
A)  $1. 
B)  $2. 
C)  $3. 
D)  $2.50.

Question 10

An increase in the price of capital will reduce the demand for labor if capital and labor are complementary resources.

Accepted Answer

A) True 
 B)False

Question 11

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,how many workers will Manfred hire to maximize profits?

Accepted Answer

A)  1. 
B)  2. 
C)  3. 
D)  5. 
A)  1. 
B)  2. 
C)  3. 
D)  5.

Question 12

If two resources are highly substitutable for one another:

Accepted Answer

A)  a decrease in the price of one will increase unit costs of production. 
B)  an increase in the price of one will increase the demand for the other. 
C)  an increase in the price of one will reduce the demand for the other. 
D)  a decrease in the price of one will increase the demand for the other. 
A)  a decrease in the price of one will increase unit costs of production. 
B)  an increase in the price of one will increase the demand for the other. 
C)  an increase in the price of one will reduce the demand for the other. 
D)  a decrease in the price of one will increase the demand for the other.

Question 13

The marginal revenue product curve of a purely competitive seller declines solely because of the law of diminishing returns.

Accepted Answer

A) True 
 B)False

Question 14

Marginal product is:

Accepted Answer

A)  the output of the least skilled worker. 
B)  a worker's output multiplied by the price at which each unit can be sold. 
C)  the amount an additional worker adds to the firm's total output. 
D)  the amount any given worker contributes to the firm's total revenue. 
A)  the output of the least skilled worker. 
B)  a worker's output multiplied by the price at which each unit can be sold. 
C)  the amount an additional worker adds to the firm's total output. 
D)  the amount any given worker contributes to the firm's total revenue.

Question 15

Assuming a competitive resource market,a firm is hiring resources in the profit-maximizing amounts when the:

Accepted Answer

A)  firm's total outlay on resources is minimized. 
B)  marginal revenue product of each resource is equal to its price. 
C)  price of each resource employed is the same. 
D)  marginal revenue product of the last unit of each resource hired is the same. 
A)  firm's total outlay on resources is minimized. 
B)  marginal revenue product of each resource is equal to its price. 
C)  price of each resource employed is the same. 
D)  marginal revenue product of the last unit of each resource hired is the same.

Question 16

Suppose there is a decline in the demand for the product labor is producing.Furthermore,the price of capital,which is complementary to labor,increases.Thus,the demand for labor:

Accepted Answer

A)  will increase. 
B)  will decrease. 
C)  may either increase or decrease. 
D)  will not change. 
A)  will increase. 
B)  will decrease. 
C)  may either increase or decrease. 
D)  will not change.

Question 17

The demand for a resource depends on its productivity and the market value of the product it is producing.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is true? Other things equal,the demand for labor will be less elastic the:

Accepted Answer

A)  easier it is to substitute capital for labor. 
B)  greater the elasticity of resource supply. 
C)  greater the elasticity of product demand. 
D)  smaller the ratio of labor costs to total costs. 
A)  easier it is to substitute capital for labor. 
B)  greater the elasticity of resource supply. 
C)  greater the elasticity of product demand. 
D)  smaller the ratio of labor costs to total costs.

Question 19

Which of the following occupations is not among the ten projected fastest-growing U.S.occupations in terms of percentage increases?

Accepted Answer

A)  School teachers. 
B)  Biomedical engineers. 
C)  Physical therapist assistants. 
D)  Personal care aides. 
A)  School teachers. 
B)  Biomedical engineers. 
C)  Physical therapist assistants. 
D)  Personal care aides.

Question 20

For a firm selling its product in a purely competitive market,the marginal revenue product of labor can be found by:

Accepted Answer

A)  adding marginal product to total product as one more unit of labor is employed. 
B)  adding marginal revenue to total product as one more unit of labor is employed. 
C)  multiplying marginal product by product price. 
D)  dividing marginal product by product price. 
A)  adding marginal product to total product as one more unit of labor is employed. 
B)  adding marginal revenue to total product as one more unit of labor is employed. 
C)  multiplying marginal product by product price. 
D)  dividing marginal product by product price.

The labor demand curve of a purely competitive seller:

Which of the following occupations is projected to be the fastest growing in the U.S.in terms of percentage increases?

Answer the question on the basis of the information given in the following table: Employment 0 1 2 3 4 5 6 Total Product 0 12 22 30 36 40 42 Product Price \ 3 3 3 3 3 3 3 Refer to the given data.If the firm is hiring workers under purely competitive conditions at a wage rate of $10,it will employ:

The elasticity of resource demand will be greater the:

Answer the question on the basis of the information given in the following table: Employment 0 1 2 3 4 5 6 Total Product 0 12 22 30 36 40 42 Product Price \ 3 3 3 3 3 3 3 Refer to the given data.This firm is:

When the elasticity coefficient for resource demand is less than one,resource demand is:

An increase in the price of capital will reduce the demand for labor if capital and labor are complementary resources.

If two resources are highly substitutable for one another:

The marginal revenue product curve of a purely competitive seller declines solely because of the law of diminishing returns.

Marginal product is:

Assuming a competitive resource market,a firm is hiring resources in the profit-maximizing amounts when the:

Suppose there is a decline in the demand for the product labor is producing.Furthermore,the price of capital,which is complementary to labor,increases.Thus,the demand for labor:

The demand for a resource depends on its productivity and the market value of the product it is producing.

Which of the following statements is true? Other things equal,the demand for labor will be less elastic the:

Which of the following occupations is not among the ten projected fastest-growing U.S.occupations in terms of percentage increases?

For a firm selling its product in a purely competitive market,the marginal revenue product of labor can be found by:

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

The labor demand curve of a purely competitive seller:

Which of the following occupations is projected to be the fastest growing in the U.S.in terms of percentage increases?

Answer the question on the basis of the information given in the following table: Employment 0 1 2 3 4 5 6 Total Product 0 12 22 30 36 40 42 Product Price \ 3 3 3 3 3 3 3 Refer to the given data.If the firm is hiring workers under purely competitive conditions at a wage rate of $10,it will employ:

The elasticity of resource demand will be greater the:

Answer the question on the basis of the information given in the following table: Employment 0 1 2 3 4 5 6 Total Product 0 12 22 30 36 40 42 Product Price \ 3 3 3 3 3 3 3 Refer to the given data.This firm is:

When the elasticity coefficient for resource demand is less than one,resource demand is:

An increase in the price of capital will reduce the demand for labor if capital and labor are complementary resources.

If two resources are highly substitutable for one another:

The marginal revenue product curve of a purely competitive seller declines solely because of the law of diminishing returns.

Marginal product is:

Assuming a competitive resource market,a firm is hiring resources in the profit-maximizing amounts when the:

Suppose there is a decline in the demand for the product labor is producing.Furthermore,the price of capital,which is complementary to labor,increases.Thus,the demand for labor:

The demand for a resource depends on its productivity and the market value of the product it is producing.

Which of the following statements is true? Other things equal,the demand for labor will be less elastic the:

Which of the following occupations is not among the ten projected fastest-growing U.S.occupations in terms of percentage increases?

For a firm selling its product in a purely competitive market,the marginal revenue product of labor can be found by:

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