Question 1

Where would economic rents be highest?

Accepted Answer

A)  Cincinnati,Ohio 
B)  St.Louis,Missouri 
C)  New York City 
D)  Toledo,Ohio 
E)  Grand Rapids,Michigan 
A)  Cincinnati,Ohio 
B)  St.Louis,Missouri 
C)  New York City 
D)  Toledo,Ohio 
E)  Grand Rapids,Michigan

Question 2

The citizens of Robbinsville notice that their friends and family in the neighboring city of Deville are earning higher wages.We would expect the labor supply in Robbinsville ________ and the labor supply in Deville to ________.

Accepted Answer

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

Question 3

Outsourcing has been a controversial topic ever since labor and manufacturing have been able to be transported.From a free-market perspective,what makes the issue so controversial?

Accepted Answer

Few people want to lose their employment

Question 4

How does diminishing marginal product affect the shape of the production function?

Accepted Answer

A)  The slope of the production function increases as the quantity of input increases. 
B)  The slope of the production function becomes more positive with diminishing marginal product. 
C)  The slope of the production function becomes horizontal once diminishing marginal product is achieved. 
D)  The slope of the production function decreases as the quantity of input increases. 
E)  The slope of the production function is not affected by diminishing marginal product. 
A)  The slope of the production function increases as the quantity of input increases. 
B)  The slope of the production function becomes more positive with diminishing marginal product. 
C)  The slope of the production function becomes horizontal once diminishing marginal product is achieved. 
D)  The slope of the production function decreases as the quantity of input increases. 
E)  The slope of the production function is not affected by diminishing marginal product.

Question 5

Refer to the following graphs to answer the following questions:
A.   
B. 
C.  
D. 
E. 
-Which graph shows a person who has a fixed quantity of hours that he or she is willing to work per week?

Accepted Answer

A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E 
A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E

Question 6

The worker productivity of Cutie Cupcakes is presented in the following table.Use the table to answer the following questions:
  
-Cupcakes previously sold for $3 and now sell for $5.The number of workers that Cutie Cupcakes hires will

Accepted Answer

A)  fall. 
B)  remain unchanged,but employees will have to work overtime. 
C)  increase. 
D)  stay the same. 
E)  increase indefinitely. 
A)  fall. 
B)  remain unchanged,but employees will have to work overtime. 
C)  increase. 
D)  stay the same. 
E)  increase indefinitely.

Question 7

With a large group of citizens leaving a country,what will happen to the equilibrium wage and quantity of workers employed?

Accepted Answer

A)  Both will fall. 
B)  Both will rise. 
C)  The equilibrium number of workers will rise and the wage will fall. 
D)  The equilibrium number of workers will fall and the wage will fall. 
E)  The equilibrium number of workers will fall and the wage will rise. 
A)  Both will fall. 
B)  Both will rise. 
C)  The equilibrium number of workers will rise and the wage will fall. 
D)  The equilibrium number of workers will fall and the wage will fall. 
E)  The equilibrium number of workers will fall and the wage will rise.

Question 8

A situation with only one buyer of labor is called a(n)

Accepted Answer

A)  monopoly. 
B)  oligopoly. 
C)  monopsony. 
D)  labor market equilibrium. 
E)  labor market disequilibrium. 
A)  monopoly. 
B)  oligopoly. 
C)  monopsony. 
D)  labor market equilibrium. 
E)  labor market disequilibrium.

Question 9

Because a product's demand for an input to its production depends on the decision to produce this product,it is called ________ demand.

Accepted Answer

A)  dependent 
B)  secondary 
C)  derived 
D)  production 
E)  input 
A)  dependent 
B)  secondary 
C)  derived 
D)  production 
E)  input

Question 10

In theory,some people might lose in the short run from outsourcing,but in the long run,all should benefit.Which option demonstrates that this theory might NOT be true?

Accepted Answer

A)  Lower labor costs lead to lower prices,so more foreigners can buy imports. 
B)  Income earned at outsourced jobs allows foreign workers to purchase imports. 
C)  Lower prices allow more consumers to buy the good domestically. 
D)  Outsourcing stimulates competition. 
E)  Inadequate transition programs hinder the ability of domestic workers,who lost their jobs to outsourcing,to obtain new jobs. 
A)  Lower labor costs lead to lower prices,so more foreigners can buy imports. 
B)  Income earned at outsourced jobs allows foreign workers to purchase imports. 
C)  Lower prices allow more consumers to buy the good domestically. 
D)  Outsourcing stimulates competition. 
E)  Inadequate transition programs hinder the ability of domestic workers,who lost their jobs to outsourcing,to obtain new jobs.

Question 11

Mary recently opened her own styling salon.After the first month of operation,she looks at the mix of inputs she is using to see whether she should make any changes.The value of marginal product of her stylists is $125,000,and their wage is $20.Her equipment and salon space produces a value of $250,000,and it costs $400 to rent it.The land,which she rents at $800,produces a value of $300,000.Should she change her input mix or is she maximizing profit with her current arrangement?

Accepted Answer

Mary needs to calculate the bang per buc

Question 12

Use the following table,which shows the supply and demand schedules for workers in the country of Hovian,to answer the following questions:
  
-If the wage is temporarily set at $25,it will need to ________ to restore equilibrium.

Accepted Answer

A)  rise 
B)  fall 
C)  remain unchanged 
D)  decrease to zero 
E)  increase to $30 
A)  rise 
B)  fall 
C)  remain unchanged 
D)  decrease to zero 
E)  increase to $30

Question 13

In the distant future,companies will be using technology that can replicate food.What will happen to the equilibrium wage and quantity of cooks?

Accepted Answer

A)  The wage will rise and the number of cooks employed will rise. 
B)  Both will remain unchanged. 
C)  The wage will stay the same,but many cooks will leave the market. 
D)  The wage will rise,and the number of cooks employed will fall. 
E)  The wage and quantity demand will both decrease because firms won't hire as many cooks. 
A)  The wage will rise and the number of cooks employed will rise. 
B)  Both will remain unchanged. 
C)  The wage will stay the same,but many cooks will leave the market. 
D)  The wage will rise,and the number of cooks employed will fall. 
E)  The wage and quantity demand will both decrease because firms won't hire as many cooks.

Question 14

The following table includes information on the labor market for bakers:
  
a.What is the equilibrium wage and quantity of bakers in this market? 
b.With the invention of instant teleportation,baker positions can be outsourced to countries with cheaper labor without sacrificing freshly baked goods.This reduces the labor demand for bakers by four-fifths.What is the new equilibrium wage and quantity of bakers hired?
c.Who wins in this situation in the short run? Who loses? What needs to happen in the long run so that the economic losers can benefit from outsourcing?

Accepted Answer

a.The equilibrium wage in this labor mar

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.The equilibrium wage in this labor market is

Accepted Answer

A)  $10. 
B)  $12. 
C)  $36. 
D)  $56. 
E)  $80. 
A)  $10. 
B)  $12. 
C)  $36. 
D)  $56. 
E)  $80.

Question 16

If there is a massive wave of immigration,the wages of workers ________ and it is more profitable for firms to use more ________.

Accepted Answer

A)  drop; capital and fewer workers 
B)  increase; land and fewer workers 
C)  increase; capital and less land 
D)  drop; workers and less capital 
E)  increase; workers and less land 
A)  drop; capital and fewer workers 
B)  increase; land and fewer workers 
C)  increase; capital and less land 
D)  drop; workers and less capital 
E)  increase; workers and less land

Question 17

Joe has several different offers for his land,which is located in the city center.He currently rents the land to a community-supported agriculture (CSA)farm for $5,000 per month.The city is offering a yearly rent payment of $12,000,to be paid in monthly installments,to put in a city park.Calculate the economic rent Joe is earning and use it to decide whether he should rent his land to the city.

Accepted Answer

First,convert the $12,000 to monthly ins

Question 18

The income effect describes the

Accepted Answer

A)  incentive to change jobs. 
B)  decision whether to join the labor force. 
C)  decision to ask for a raise. 
D)  incentive to work more when the wage rises. 
E)  incentive to work less when the wage rises. 
A)  incentive to change jobs. 
B)  decision whether to join the labor force. 
C)  decision to ask for a raise. 
D)  incentive to work more when the wage rises. 
E)  incentive to work less when the wage rises.

Question 19

The following graph represents Zendar's labor market.Use this graph to answer the following questions:
  
-To have no surplus or shortage of workers in Zendar,what does the wage rate have to be?

Accepted Answer

A)  $5 
B)  $10 
C)  $15 
D)  $20 
E)  $25 
A)  $5 
B)  $10 
C)  $15 
D)  $20 
E)  $25

Question 20

The backward-bending labor supply curve has its shape because,at

Accepted Answer

A)  low wages,the income effect dominates the substitution effect,but the reverse occurs at high wages. 
B)  high wages,the substitution effect dominates the income effect,but the reverse occurs at low wages. 
C)  low wages,the substitution effect dominates the income effect,but the reverse occurs at high wages. 
D)  all wages,the income effect dominates the substitution effect. 
E)  all wages,the substitution effect dominates the income effect. 
A)  low wages,the income effect dominates the substitution effect,but the reverse occurs at high wages. 
B)  high wages,the substitution effect dominates the income effect,but the reverse occurs at low wages. 
C)  low wages,the substitution effect dominates the income effect,but the reverse occurs at high wages. 
D)  all wages,the income effect dominates the substitution effect. 
E)  all wages,the substitution effect dominates the income effect.

Where would economic rents be highest?

The citizens of Robbinsville notice that their friends and family in the neighboring city of Deville are earning higher wages.We would expect the labor supply in Robbinsville and the labor supply in Deville to .

Outsourcing has been a controversial topic ever since labor and manufacturing have been able to be transported.From a free-market perspective,what makes the issue so controversial?

How does diminishing marginal product affect the shape of the production function?

Refer to the following graphs to answer the following questions: A. B.11efbc7a_aae2_b1ce_a154_5b2bc6d63cd5_TB4871_00 C. D. E. -Which graph shows a person who has a fixed quantity of hours that he or she is willing to work per week?

The worker productivity of Cutie Cupcakes is presented in the following table.Use the table to answer the following questions: -Cupcakes previously sold for $3 and now sell for $5.The number of workers that Cutie Cupcakes hires will

With a large group of citizens leaving a country,what will happen to the equilibrium wage and quantity of workers employed?

A situation with only one buyer of labor is called a(n)

Because a product's demand for an input to its production depends on the decision to produce this product,it is called ________ demand.

In theory,some people might lose in the short run from outsourcing,but in the long run,all should benefit.Which option demonstrates that this theory might NOT be true?

Use the following table,which shows the supply and demand schedules for workers in the country of Hovian,to answer the following questions: -If the wage is temporarily set at $25,it will need to ________ to restore equilibrium.

In the distant future,companies will be using technology that can replicate food.What will happen to the equilibrium wage and quantity of cooks?

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.The equilibrium wage in this labor market is

If there is a massive wave of immigration,the wages of workers and it is more profitable for firms to use more .

The income effect describes the

The following graph represents Zendar's labor market.Use this graph to answer the following questions: -To have no surplus or shortage of workers in Zendar,what does the wage rate have to be?

The backward-bending labor supply curve has its shape because,at

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

Where would economic rents be highest?

The citizens of Robbinsville notice that their friends and family in the neighboring city of Deville are earning higher wages.We would expect the labor supply in Robbinsville ________ and the labor supply in Deville to ________.

Outsourcing has been a controversial topic ever since labor and manufacturing have been able to be transported.From a free-market perspective,what makes the issue so controversial?

How does diminishing marginal product affect the shape of the production function?

Refer to the following graphs to answer the following questions: A. B.11efbc7a_aae2_b1ce_a154_5b2bc6d63cd5_TB4871_00 C. D. E. -Which graph shows a person who has a fixed quantity of hours that he or she is willing to work per week?

The worker productivity of Cutie Cupcakes is presented in the following table.Use the table to answer the following questions: -Cupcakes previously sold for $3 and now sell for $5.The number of workers that Cutie Cupcakes hires will

With a large group of citizens leaving a country,what will happen to the equilibrium wage and quantity of workers employed?

A situation with only one buyer of labor is called a(n)

Because a product's demand for an input to its production depends on the decision to produce this product,it is called ________ demand.

In theory,some people might lose in the short run from outsourcing,but in the long run,all should benefit.Which option demonstrates that this theory might NOT be true?

Use the following table,which shows the supply and demand schedules for workers in the country of Hovian,to answer the following questions: -If the wage is temporarily set at $25,it will need to ________ to restore equilibrium.

In the distant future,companies will be using technology that can replicate food.What will happen to the equilibrium wage and quantity of cooks?

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.The equilibrium wage in this labor market is

If there is a massive wave of immigration,the wages of workers ________ and it is more profitable for firms to use more ________.

The income effect describes the

The following graph represents Zendar's labor market.Use this graph to answer the following questions: -To have no surplus or shortage of workers in Zendar,what does the wage rate have to be?

The backward-bending labor supply curve has its shape because,at

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

The citizens of Robbinsville notice that their friends and family in the neighboring city of Deville are earning higher wages.We would expect the labor supply in Robbinsville and the labor supply in Deville to .

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.The equilibrium wage in this labor market is

If there is a massive wave of immigration,the wages of workers and it is more profitable for firms to use more .