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.Assuming the prices of resources a and b are $5 and $8 respectively,what is the profit-maximizing combination of resources?

A) 7 of a and 7 of b. B) 6 of a and 4 of b. C) 5 of a and 7 of b. D) 4 of a and 4 of b. A) 7 of a and 7 of b. B) 6 of a and 4 of b. C) 5 of a and 7 of b. D) 4 of a and 4 of b.

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 $11,how many workers will the firm choose to employ?

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

Answer the question on the basis of the following data: $\begin{array}{cccccc} Quantity &MP of& MRP of &\text{Quantity of}& MP of &MRP of\\ of Labor& Labor& Labor& Capital &Capital &Capital\\ \hline 1 & 15 & \$ 45 & 1 & 8 & \$ 24 \\ 2 & 12 & 36 & 2 & 6 & 18 \\ 3 & 9 & 27 & 3 & 5 & 15 \\ 4 & 6 & 18 & 4 & 4 & 12 \\ 5 & 3 & 9 & 5 & 3 & 9 \\ 6 & 1 & 3 & 6 & 2 & 6 \end{array}$ Refer to the given data.If the prices of labor and capital are $9 and $15 respectively,at the profit-maximizing level,the firm's total output will be:

A) 38 units. B) 60 units. C) 64 units. D) 27 units. A) 38 units. B) 60 units. C) 64 units. D) 27 units.

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.Assuming the prices of resources a and b are $5 and $8 respectively,what is the profit-maximizing combination of resources?

(Multiple Choice)

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Question 101

(Last Word)"The Case of ATMs" best illustrates the:

(Multiple Choice)

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Question 102

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. Units of Labor Total Product 0 0 1 15 2 28 3 39 4 48 5 55 6 60 Product Price \ 2.20 2.00 1.80 1.60 1.40 1.20 1.10 Refer to the given data.If the wage rate is $11,how many workers will the firm choose to employ?

(Multiple Choice)

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Question 103

Which of the following occupations is among the ten projected most rapidly declining U.S.occupations in terms of percentage increases?

(Multiple Choice)

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Question 104

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.If MP_C/P_C > MP_L/P_L,the firm:

(Multiple Choice)

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Question 105

Resource X has many close substitutes,whereas resource Y has no close substitutes.Other things equal,we would expect:

(Multiple Choice)

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Question 106

The labor demand curve of a purely competitive seller:

(Multiple Choice)

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Question 107

A firm is hiring resources X,Y,and Z in the profit-maximizing amounts when:

(Multiple Choice)

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Question 108

(Consider This)In the market for superstars:

(Multiple Choice)

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Question 109

A firm should reduce its employment of a resource whose marginal resource cost exceeds its marginal revenue product.

(True/False)

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Question 110

Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units.If the product sells for $6 per unit in a purely competitive market,the MRP of this additional worker is:

(Multiple Choice)

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Question 111

Assume the price of capital doubles and,as a result,firms make no change in the relative quantities of capital and labor they employ.This implies that:

(Multiple Choice)

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Question 112

A profit-maximizing firm employs resources to the point where:

(Multiple Choice)

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Question 113

A firm will employ more of an input whose relative price has fallen and,conversely,will use less of an input whose relative price has risen.Thus,a fall in the price of capital will increase the relative price of labor and thereby reduce the demand for labor.This describes the:

(Multiple Choice)

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Question 114

The marginal productivity theory of income distribution holds that all resources are paid according to their marginal contribution to society's output.

(True/False)

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Question 115

The MRP curve for labor:

(Multiple Choice)

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Question 116

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.In competitive labor markets,the marginal cost of an additional unit of labor:

(Multiple Choice)

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Question 117

Producers should hire resources until the total output of each is equal.

(True/False)

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Question 118

Other things equal,the relationship between the relative importance of a given type of labor in a firm's total costs and the elasticity of demand for that labor is such that the:

(Multiple Choice)

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Question 119

Answer the question on the basis of the following data: Quantity MPof MRPof Quantity of MPof MRPof ofLabor Labor Labor Capital Capital Capital 1 15 \ 45 1 8 \ 24 2 12 36 2 6 18 3 9 27 3 5 15 4 6 18 4 4 12 5 3 9 5 3 9 6 1 3 6 2 6 Refer to the given data.If the prices of labor and capital are $9 and $15 respectively,at the profit-maximizing level,the firm's total output will be:

(Multiple Choice)

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Question 120

(Last Word)"The Case of ATMs" best illustrates the:

Which of the following occupations is among the ten projected most rapidly declining U.S.occupations in terms of percentage increases?

Resource X has many close substitutes,whereas resource Y has no close substitutes.Other things equal,we would expect:

The labor demand curve of a purely competitive seller:

A firm is hiring resources X,Y,and Z in the profit-maximizing amounts when:

(Consider This)In the market for superstars:

A firm should reduce its employment of a resource whose marginal resource cost exceeds its marginal revenue product.

Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units.If the product sells for $6 per unit in a purely competitive market,the MRP of this additional worker is:

Assume the price of capital doubles and,as a result,firms make no change in the relative quantities of capital and labor they employ.This implies that:

A profit-maximizing firm employs resources to the point where:

A firm will employ more of an input whose relative price has fallen and,conversely,will use less of an input whose relative price has risen.Thus,a fall in the price of capital will increase the relative price of labor and thereby reduce the demand for labor.This describes the:

The marginal productivity theory of income distribution holds that all resources are paid according to their marginal contribution to society's output.

The MRP curve for labor:

Producers should hire resources until the total output of each is equal.

Other things equal,the relationship between the relative importance of a given type of labor in a firm's total costs and the elasticity of demand for that labor is such that the:

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