Question 1

Which factor of production earns the most income in the U.S.economy?

Accepted Answer

A)  labor 
B)  capital 
C)  land 
D)  entrepreneurship 
E)  government 
A)  labor 
B)  capital 
C)  land 
D)  entrepreneurship 
E)  government

Question 2

More job opportunities open up in the South,prompting labor supply curves in northern states to ________ and in southern states to ________.

Accepted Answer

A)  remain unchanged; shift right 
B)  shift right; shift right 
C)  shift left; shift right 
D)  shift left; remain unchanged 
E)  shift left; shift left 
A)  remain unchanged; shift right 
B)  shift right; shift right 
C)  shift left; shift right 
D)  shift left; remain unchanged 
E)  shift left; shift left

Question 3

A firm calculates that the marginal product of labor (MPL)can be found from the following equation:
MPL = 35 - 2L
where L is the number of workers hired.
The production function for this firm is as follows:
Q = 35L - L2
The firm knows it can find profits with the following equation:
Profit = P * Q - W * L
where P stands for the selling price of the good,Q stands for total output,and W represents the wage.Price is equal to $1.
a.If the wage is $11,how many workers will the firm hire? How much profit will it earn?
b.Compare this level of profits to those earned by the firm if it hired one fewer worker than L* and one worker more than L* to demonstrate that L* workers generate the most profit for the firm.

Accepted Answer

a.First,we need to find the equation for

Question 4

Consider the labor market for domestic market personal trainers.Graph and explain how the following events would affect the labor supply curve for these workers.
a.Many personal trainers are qualified to coach various athletic teams.The pay for these coaching positions is far superior to what they can earn as personal trainers.
b.Most personal trainers used to be men.Now,more women are hired as personal trainers.
c.A neighboring country is looking to build its Olympic program to make the national team more competitive.As such,the government is providing very lucrative offers to personal trainers who move to that country to train potential Olympic athletes.

Accepted Answer

a.There is an incentive to switch profes

Question 5

When a new major league baseball stadium is built in the suburbs of a large city,the rents of apartments surrounding the stadium skyrocket because

Accepted Answer

A)  the supply of the apartments is high. 
B)  the amount of land available for apartments is fixed. 
C)  stadium owners want the area to be upscale. 
D)  everyone wants to live near a stadium. 
E)  the players want to live nearby and can afford high rents. 
A)  the supply of the apartments is high. 
B)  the amount of land available for apartments is fixed. 
C)  stadium owners want the area to be upscale. 
D)  everyone wants to live near a stadium. 
E)  the players want to live nearby and can afford high rents.

Question 6

The use of farm machinery to plant and harvest crops has increased because it is more productive than the typical farmhand.Demand for farmhands has

Accepted Answer

A)  remained steady. 
B)  shifted to other areas of the farm. 
C)  decreased. 
D)  fallen to zero. 
E)  increased. 
A)  remained steady. 
B)  shifted to other areas of the farm. 
C)  decreased. 
D)  fallen to zero. 
E)  increased.

Question 7

The Earth's major governments have recently decided to combine their resources to launch an effective plan to colonize the moon.
a.Graph the market for land on the moon before the colonization effort is successful.
b.What impact will the moon base have on the rental price of land on Earth? Graph and explain.

Accepted Answer

a.The demand for land has a negative slo

Question 8

Your friend Sue tells you that if she gets a raise,she is going to start working less.Your other friend Emma says that the plan is crazy and that Sue should work more so she can earn more money.Which friend is right?

Accepted Answer

It depends on whether the income effect

Question 9

Factors of production are

Accepted Answer

A)  goods and services. 
B)  used to make goods and services. 
C)  purchased by the consumer for personal use. 
D)  sold by the consumer for income. 
E)  the property of firms. 
A)  goods and services. 
B)  used to make goods and services. 
C)  purchased by the consumer for personal use. 
D)  sold by the consumer for income. 
E)  the property of firms.

Question 10

The following graph represents Zendar's labor market.Use this graph to answer the following questions:
  
-At a wage of ________,there is a ________ of ________ workers.

Accepted Answer

A)  $10; surplus; 30 
B)  $40; shortage; 30 
C)  $10; shortage; 30 
D)  $35; shortage; 20 
E)  $25; surplus; 10 
A)  $10; surplus; 30 
B)  $40; shortage; 30 
C)  $10; shortage; 30 
D)  $35; shortage; 20 
E)  $25; surplus; 10

Question 11

A profit-maximizing firm in a competitive market that is producing on a production curve where the marginal product of labor is diminishing also has

Accepted Answer

A)  an upward-sloping labor demand curve. 
B)  a downward-sloping labor demand curve. 
C)  a perfectly elastic labor supply curve. 
D)  a perfectly inelastic labor supply curve. 
E)  a perfectly inelastic labor demand curve. 
A)  an upward-sloping labor demand curve. 
B)  a downward-sloping labor demand curve. 
C)  a perfectly elastic labor supply curve. 
D)  a perfectly inelastic labor supply curve. 
E)  a perfectly inelastic labor demand curve.

Question 12

Consider the labor market for autoworkers.Graph and explain how the following events would affect the labor demand curve for these workers:
a.Citizens become more concerned about the environment,choosing public transportation over motor vehicles.
b.Domestic pressures and governmental policy make it harder for firms to outsource their production to other countries.As business expands,firms must hire domestically.
c.Assembly line technology improves to the point where only a handful of workers are needed to operate the production system.

Accepted Answer

a.The demand for labor is a derived dema

Question 13

Refer to the following figure to answer the following questions:
  
-What is the marginal product of the fourth worker?

Accepted Answer

A)  3.75 units 
B)  15 units 
C)  2 units 
D)  1 unit 
E)  4.67 units 
A)  3.75 units 
B)  15 units 
C)  2 units 
D)  1 unit 
E)  4.67 units

Question 14

Refer to the following figure to answer the following questions:
  
-What is the marginal product of the second worker?

Accepted Answer

A)  12 units 
B)  8 units 
C)  6 units 
D)  4 units 
E)  2 units 
A)  12 units 
B)  8 units 
C)  6 units 
D)  4 units 
E)  2 units

Question 15

The labor supply curve is given by the equation LS = 3W + 20 and the labor demand curve is given by the equation LD = 80 - 2W.If the wage is $20,there will be a ________ of ________ workers.

Accepted Answer

A)  surplus; 80 
B)  shortage; 40 
C)  shortage; 80 
D)  surplus; 40 
E)  surplus; 20 
A)  surplus; 80 
B)  shortage; 40 
C)  shortage; 80 
D)  surplus; 40 
E)  surplus; 20

Question 16

Graph the labor supply curves based on the statements below.
a.I hate working! I am never going to work!
b.I want to earn as much money as I possibly can so I can buy everything on my wish list.Every time I get a raise it makes me want to work more because I can earn even more money.I don't think I would ever work less,not even if the wage were a million dollars.
c.Money is necessary,but it's not the most important thing to me.If I received increased wages,I would probably work more for a while,but once my pay was high enough,I would work less.

Accepted Answer

a.There is no wage that can induce this

Question 17

Use the following table,which shows the supply and demand schedules for workers in the country of Hovian,to answer the following questions:
  
-Wages above ________ will cause a ________.

Accepted Answer

A)  $10; surplus 
B)  $50; shortage 
C)  $20; surplus 
D)  $30; shortage 
E)  $40; shortage 
A)  $10; surplus 
B)  $50; shortage 
C)  $20; surplus 
D)  $30; shortage 
E)  $40; shortage

Question 18

If a profit-maximizing firm hires its eleventh worker,then it can be inferred that when the firm hired the first 10 workers,the

Accepted Answer

A)  wage was larger than the value of the marginal product of labor (VMPL). 
B)  value of the marginal product of labor (VMPL)was larger than the wage. 
C)  marginal product of labor was increasing. 
D)  market was becoming less competitive. 
E)  labor demand curve of this firm was becoming more steep. 
A)  wage was larger than the value of the marginal product of labor (VMPL). 
B)  value of the marginal product of labor (VMPL)was larger than the wage. 
C)  marginal product of labor was increasing. 
D)  market was becoming less competitive. 
E)  labor demand curve of this firm was becoming more steep.

Question 19

Use the following table to answer the following questions:
  
-What is the marginal product of the third worker?

Accepted Answer

A)  7 units 
B)  8.33 units 
C)  25 units 
D)  75 units 
E)  8 units 
A)  7 units 
B)  8.33 units 
C)  25 units 
D)  75 units 
E)  8 units

Question 20

Use the following table,which shows the supply and demand schedules for workers in the country of Hovian,to answer the following questions:
  
-The supply schedule indicates that the labor supply curve is

Accepted Answer

A)  backward-bending. 
B)  upward-sloping. 
C)  downward-sloping. 
D)  vertical. 
E)  horizontal. 
A)  backward-bending. 
B)  upward-sloping. 
C)  downward-sloping. 
D)  vertical. 
E)  horizontal.

Which factor of production earns the most income in the U.S.economy?

More job opportunities open up in the South,prompting labor supply curves in northern states to and in southern states to .

When a new major league baseball stadium is built in the suburbs of a large city,the rents of apartments surrounding the stadium skyrocket because

The use of farm machinery to plant and harvest crops has increased because it is more productive than the typical farmhand.Demand for farmhands has

Your friend Sue tells you that if she gets a raise,she is going to start working less.Your other friend Emma says that the plan is crazy and that Sue should work more so she can earn more money.Which friend is right?

Factors of production are

The following graph represents Zendar's labor market.Use this graph to answer the following questions: -At a wage of ,there is a of workers.

A profit-maximizing firm in a competitive market that is producing on a production curve where the marginal product of labor is diminishing also has

Refer to the following figure to answer the following questions: -What is the marginal product of the fourth worker?

Refer to the following figure to answer the following questions: -What is the marginal product of the second worker?

The labor supply curve is given by the equation L_S = 3W + 20 and the labor demand curve is given by the equation L_D = 80 - 2W.If the wage is $20,there will be a of workers.

Use the following table,which shows the supply and demand schedules for workers in the country of Hovian,to answer the following questions: -Wages above will cause a .

If a profit-maximizing firm hires its eleventh worker,then it can be inferred that when the firm hired the first 10 workers,the

Use the following table to answer the following questions: -What is the marginal product of the third worker?

Use the following table,which shows the supply and demand schedules for workers in the country of Hovian,to answer the following questions: -The supply schedule indicates that the labor supply curve is

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

International Trade

Filters

Exam 14: The Demand and Supply of Resources

Which factor of production earns the most income in the U.S.economy?

More job opportunities open up in the South,prompting labor supply curves in northern states to ________ and in southern states to ________.

When a new major league baseball stadium is built in the suburbs of a large city,the rents of apartments surrounding the stadium skyrocket because

The use of farm machinery to plant and harvest crops has increased because it is more productive than the typical farmhand.Demand for farmhands has

Your friend Sue tells you that if she gets a raise,she is going to start working less.Your other friend Emma says that the plan is crazy and that Sue should work more so she can earn more money.Which friend is right?

Factors of production are

The following graph represents Zendar's labor market.Use this graph to answer the following questions: -At a wage of ________,there is a ________ of ________ workers.

A profit-maximizing firm in a competitive market that is producing on a production curve where the marginal product of labor is diminishing also has

Refer to the following figure to answer the following questions: -What is the marginal product of the fourth worker?

Refer to the following figure to answer the following questions: -What is the marginal product of the second worker?

The labor supply curve is given by the equation LS = 3W + 20 and the labor demand curve is given by the equation LD = 80 - 2W.If the wage is $20,there will be a ________ of ________ workers.

Use the following table,which shows the supply and demand schedules for workers in the country of Hovian,to answer the following questions: -Wages above ________ will cause a ________.

If a profit-maximizing firm hires its eleventh worker,then it can be inferred that when the firm hired the first 10 workers,the

Use the following table to answer the following questions: -What is the marginal product of the third worker?

Use the following table,which shows the supply and demand schedules for workers in the country of Hovian,to answer the following questions: -The supply schedule indicates that the labor supply curve is

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

International Trade

Filters

More job opportunities open up in the South,prompting labor supply curves in northern states to and in southern states to .

The following graph represents Zendar's labor market.Use this graph to answer the following questions: -At a wage of ,there is a of workers.

The labor supply curve is given by the equation L_S = 3W + 20 and the labor demand curve is given by the equation L_D = 80 - 2W.If the wage is $20,there will be a of workers.

Use the following table,which shows the supply and demand schedules for workers in the country of Hovian,to answer the following questions: -Wages above will cause a .