Question 1

Which statement is true?

Accepted Answer

A) Productivity is input per unit of output. 
B) The MRP curve for the perfect competitor is steeper than the MRP curve for the imperfect competitor. 
C) The firm will hire workers until the wage rate and the Marginal Physical Product (MPP)of the last worker hired are equal. 
D) Relative to the U.S.economy,the Chinese economy is more labor intensive and less capital intensive. 
A) Productivity is input per unit of output. 
B) The MRP curve for the perfect competitor is steeper than the MRP curve for the imperfect competitor. 
C) The firm will hire workers until the wage rate and the Marginal Physical Product (MPP)of the last worker hired are equal. 
D) Relative to the U.S.economy,the Chinese economy is more labor intensive and less capital intensive.

Question 2

If the output per acre of land triples,then the productivity of an acre of land

Accepted Answer

A) has been cut by two-thirds. 
B) has been cut by one-third. 
C) has stayed about the same. 
D) has increaseD. 
E) has tripled. 
A) has been cut by two-thirds. 
B) has been cut by one-third. 
C) has stayed about the same. 
D) has increaseD. 
E) has tripled.

Question 3

Which statement is true?

Accepted Answer

A) A change in derived demand brings about a change in final demand. 
B) A change in final demand brings about a change in derived demand. 
C) A rise in final demand is associated with a decline in derived demand. 
D) None of these statements are true. 
A) A change in derived demand brings about a change in final demand. 
B) A change in final demand brings about a change in derived demand. 
C) A rise in final demand is associated with a decline in derived demand. 
D) None of these statements are true.

Question 4

Labor and land are substitutes.If rent goes up and the amount of labor used goes down,we can assume that the

Accepted Answer

A) output effect outweighed the substitution effect. 
B) the substitution effect outweighed the output effect. 
C) the substitution effect and the output effect canceled each other out. 
D) there is no way to determine the relative weights of the substitution effect and the output effect. 
A) output effect outweighed the substitution effect. 
B) the substitution effect outweighed the output effect. 
C) the substitution effect and the output effect canceled each other out. 
D) there is no way to determine the relative weights of the substitution effect and the output effect.

Question 5

You operate a shop that repairs TVs and VCRs.The going wage rate in a competitive market for skilled repair people is $18 per hour.Given the current demand for your services,the marginal revenue product of your repair people is $28 per hour.
-If you were to employ one more hour of a repair person's services you would

Accepted Answer

A) increase your profit by $28. 
B) increase your profit by $18. 
C) increase your profit by $10. 
D) not increase your profit at all. 
E) decrease your profit. 
A) increase your profit by $28. 
B) increase your profit by $18. 
C) increase your profit by $10. 
D) not increase your profit at all. 
E) decrease your profit.

Question 6

$$\begin{array}{l}
\begin{array} {ccc } 
\text { Units of Input}&\text { Units of Output }\
1 & 4 \
2 & 9 \
3 & 13 \
4 & 15 \
5 & 16 \
6 & 16 \
7 & 15
\end{array}
\end{array}$$
-If this firm were a perfect competitor selling its entire output at a price of $10,the marginal revenue product of the fourth unit of output would be

Accepted Answer

A) $0. 
B) $10. 
C) $15. 
D) $20. 
E) $150. 
A) $0. 
B) $10. 
C) $15. 
D) $20. 
E) $150.

Question 7

If the wage rate were $250,how many workers would be hired?

Accepted Answer

A) 3 
B) 4 
C) 5 
D) 6 
E) 0 
A) 3 
B) 4 
C) 5 
D) 6 
E) 0

Question 8

If a large increase in the wage rate leads to a net increase in the use of land by a firm,then

Accepted Answer

A) the substitution effect outweighed the output effect. 
B) the output effect outweighed the substitution effect. 
C) the substitution and output effects are equal. 
D) there is no way to estimate the relative sizes of the substitution and output effects. 
A) the substitution effect outweighed the output effect. 
B) the output effect outweighed the substitution effect. 
C) the substitution and output effects are equal. 
D) there is no way to estimate the relative sizes of the substitution and output effects.

Question 9

If the productivity of capital rises,its MPP will _____ and its MRP will ____.

Accepted Answer

A) rise;rise 
B) fall;fall 
C) rise;fall 
D) fall;rise 
A) rise;rise 
B) fall;fall 
C) rise;fall 
D) fall;rise

Question 10

You operate a shop that repairs TVs and VCRs.The going wage rate in a competitive market for skilled repair people is $18 per hour.Given the current demand for your services,the marginal revenue product of your repair people is $28 per hour.
-You should

Accepted Answer

A) increase the number of repair people working for you. 
B) decrease the number of repair people working for you. 
C) make no change in the number of people you use. 
D) lay off all your employees and do all the work yourself. 
A) increase the number of repair people working for you. 
B) decrease the number of repair people working for you. 
C) make no change in the number of people you use. 
D) lay off all your employees and do all the work yourself.

Question 11

Using the table,how many units of land,labor,and capital would you hire?
$\begin{array} { c c c c c c } 
\begin{array} { c } 
\text { Units of } \
\text { Land }
\end{array} & \begin{array} { c } 
\text { MRP of } \
\text { Land }
\end{array} & \begin{array} { c } 
\text { Units of } \
\text { Capital }
\end{array} & \begin{array} { c } 
\text { MRP of } \
\text { Capital }
\end{array} & \begin{array} { c } 
\text { Units of } \
\text { Labor }
\end{array} & \begin{array} { c } 
\text { MRP of } \
\text { Labor }
\end{array} \
1 & \$ 50 & 1 & \$ 110 & 1 & \$ 95 \
2 & 44 & 2 & 102 & 2 & 90 \
3 & 37 & 3 & 90 & 3 & 83 \
4 & 27 & 4 & 77 & 4 & 74 \
5 & 15 & 5 & 61 & 5 & 61 \
6 & 2 & 6 & 44 & 6 & 46 \
7 & -10 & 7 & 28 & 7 & 33 \
8 & -25 & 8 & 13 & 8 & 18
\end{array}$
$~~~~~~~~~~~\text { Rent }=\$ 15 \quad~~~~~~~~~~~~~~~~~~~~~~ \text { Interest }=\$ 44 \quad~~~~~~~~~~~~~~~~ \text { Wage rate }-\$ 74$

Accepted Answer

@#IMG-DLM& 5 units of land;6 u

Question 12

How many workers would the firm hire if the wage rate were $459?

Accepted Answer

The answer of How many workers would the firm hire...

Question 13

Suppose that land and capital are substitute resources.If rent rose,then the employment of capital would be _____ by the substitution effect and _____ by the output effect.

Accepted Answer

A) increased;increased 
B) decreased;decreased 
C) increased;decreased 
D) decreased;increased 
A) increased;increased 
B) decreased;decreased 
C) increased;decreased 
D) decreased;increased

Question 14

An increase in the demand for steel occurs.As a result,firms in the steel industry will

Accepted Answer

A) experience no change in their demand for capital. 
B) decrease their demand for capital. 
C) decrease both output and their demand for capital. 
D) increase their demand for capital. 
A) experience no change in their demand for capital. 
B) decrease their demand for capital. 
C) decrease both output and their demand for capital. 
D) increase their demand for capital.

Question 15

If a firm's marginal revenue product of labor is $100 and it pays a wage rate of $85,

Accepted Answer

A) the firm should reduce the wage it pays. 
B) the firm is maximizing its profits. 
C) the law of diminishing marginal productivity is being observed. 
D) the firm can raise its profits by increasing the number of workers. 
A) the firm should reduce the wage it pays. 
B) the firm is maximizing its profits. 
C) the law of diminishing marginal productivity is being observed. 
D) the firm can raise its profits by increasing the number of workers.

Question 16

If the wage rate rises and there is a net decrease in the use of capital by a firm

Accepted Answer

A) the substitution effect outweighed the output effect. 
B) the output effect outweighed the substitution effect. 
C) the substitution and output effects were equal. 
D) there is no way to determine the relative strengths of the output and substitution effects. 
A) the substitution effect outweighed the output effect. 
B) the output effect outweighed the substitution effect. 
C) the substitution and output effects were equal. 
D) there is no way to determine the relative strengths of the output and substitution effects.

Question 17

White-collar employment has risen sharply since the introduction of computers,so clearly the

Accepted Answer

A) output effect has outweighed the substitution effect. 
B) substitution effect has outweighed the output effect. 
C) substitution and output effects are equal. 
A) output effect has outweighed the substitution effect. 
B) substitution effect has outweighed the output effect. 
C) substitution and output effects are equal.

Question 18

A decrease in the demand for the product produced by an input will

Accepted Answer

A) increase the supply of the input. 
B) decrease the supply of the input. 
C) have no effect on the input market. 
D) increase the demand for the input. 
E) decrease the demand for the input. 
A) increase the supply of the input. 
B) decrease the supply of the input. 
C) have no effect on the input market. 
D) increase the demand for the input. 
E) decrease the demand for the input.

Question 19

Derived demand is derived from the demand for the ________________.

Accepted Answer

The answer of Derived demand is derived from the demand...

Question 20

Suppose that land and labor are substitute resources.If the wage rate rose,the employment of land would rise only if

Accepted Answer

A) the output effect outweighed the substitution effect. 
B) the substitution effect outweighed the output effect. 
C) the substitution effect was equal to the output effect. 
A) the output effect outweighed the substitution effect. 
B) the substitution effect outweighed the output effect. 
C) the substitution effect was equal to the output effect.

Exam 26: Demand in the Factor Market

Which statement is true?

If the output per acre of land triples,then the productivity of an acre of land

Which statement is true?

Labor and land are substitutes.If rent goes up and the amount of labor used goes down,we can assume that the

Units of Input Units of Output 1 4 2 9 3 13 4 15 5 16 6 16 7 15 -If this firm were a perfect competitor selling its entire output at a price of $10,the marginal revenue product of the fourth unit of output would be

If the wage rate were $250,how many workers would be hired?

If a large increase in the wage rate leads to a net increase in the use of land by a firm,then

If the productivity of capital rises,its MPP will _____ and its MRP will ____.

You operate a shop that repairs TVs and VCRs.The going wage rate in a competitive market for skilled repair people is $18 per hour.Given the current demand for your services,the marginal revenue product of your repair people is $28 per hour. -You should

How many workers would the firm hire if the wage rate were $459?

Suppose that land and capital are substitute resources.If rent rose,then the employment of capital would be _____ by the substitution effect and _____ by the output effect.

An increase in the demand for steel occurs.As a result,firms in the steel industry will

If a firm's marginal revenue product of labor is $100 and it pays a wage rate of $85,

If the wage rate rises and there is a net decrease in the use of capital by a firm

White-collar employment has risen sharply since the introduction of computers,so clearly the

A decrease in the demand for the product produced by an input will

Derived demand is derived from the demand for the ________________.

Suppose that land and labor are substitute resources.If the wage rate rose,the employment of land would rise only if

A Brief Economic History of the United States

Resource Utilization

The Mixed Economy

Supply and Demand

The Household Consumption Sector

The Business Investment Sector

The Government Sector

The Export-Import Sector

Gross Domestic Product

Economic Fluctuations, unemployment, and Inflation

Classical and Keynesian Economics

Fiscal Policy and the National Debt

Money and Banking

The Federal Reserve and Monetary Policy

A Century of Economic Theory

Economic Growth and Productivity

Demand,supply,and Equilibrium

The Price Elasticities of Demand and Supply

Theory of Consumer Behavior

Cost

Profit, loss, and Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Corporate Mergers and Antitrust

Labor Unions

Labor Markets and Wage Rates

Rent, interest, and Profit

Income Distribution and Poverty

International Trade

International Finance

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If the productivity of capital rises,its MPP will _ and its MRP will .

Suppose that land and capital are substitute resources.If rent rose,then the employment of capital would be _ by the substitution effect and _ by the output effect.