Question 1

If a large decrease in the cost of capital leads to a firm increasing the labor it uses

Accepted Answer

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

Question 2

The output effect states that if the price of a resource _________,output of the final product will _________.

Accepted Answer

A) rises;decline 
B) rises;increase 
C) falls;decline 
D) None of these choices are correct. 
A) rises;decline 
B) rises;increase 
C) falls;decline 
D) None of these choices are correct.

Question 3

Land and capital are substitutes.If rent goes up and the amount of capital used goes up,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 4

$$\begin{array}{l}
\begin{array} { cc } 
\text { Units of Input}&\text { Units of Outputs }\
1 & 3 \
2 & 7 \
3 & 10 \
4 & 12 \
5 & 13 \
6 & 12
\end{array}
\end{array}$$
-The maximum units of input you would possibly hire is

Accepted Answer

A) 2. 
B) 3. 
C) 4. 
D) 5. 
E) 6. 
A) 2. 
B) 3. 
C) 4. 
D) 5. 
E) 6.

Question 5

The optimum resource mix for a firm would be

Accepted Answer

A) wage rate/rent = MRP of labor/MRP of land. 
B) wage rate / rent = MRP of labor * MRP of land. 
C) MRP of labor/wage rate = MRP of land/rent. 
D) None of these choices are correct. 
A) wage rate/rent = MRP of labor/MRP of land. 
B) wage rate / rent = MRP of labor * MRP of land. 
C) MRP of labor/wage rate = MRP of land/rent. 
D) None of these choices are correct.

Question 6

When the price of a resource _________,the demand for a complementary resource ___________;when price of a resource _________,the demand for a complementary resource _________.

Accepted Answer

A) rises,rises;falls,falls 
B) rises,falls;falls,falls 
C) rises,falls;falls,rises 
D) rises,rises;falls,rises 
A) rises,rises;falls,falls 
B) rises,falls;falls,falls 
C) rises,falls;falls,rises 
D) rises,rises;falls,rises

Question 7

As output rises,

Accepted Answer

A) both marginal revenue product and marginal physical product rise. 
B) both marginal revenue product and marginal physical product fall. 
C) marginal revenue product rises and marginal physical product falls. 
D) marginal revenue product rises and marginal physical product rises. 
A) both marginal revenue product and marginal physical product rise. 
B) both marginal revenue product and marginal physical product fall. 
C) marginal revenue product rises and marginal physical product falls. 
D) marginal revenue product rises and marginal physical product rises.

Question 8

Productivity is _________ per unit of __________.

Accepted Answer

A) output;input 
B) input;output 
C) labor;capital 
D) None of these choices are true. 
A) output;input 
B) input;output 
C) labor;capital 
D) None of these choices are true.

Question 9

If the wage rate were $156,how many workers would be hired?

Accepted Answer

The answer of If the wage rate were $156,how many...

Question 10

Statement I: The substitution effect states that if the price of a resource rises,other resources will be substituted for it.
Statement II: The concept of margin is central to economic analysis.

Accepted Answer

A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false. 
A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false.

Question 11

If Max's output per hour were 50 in 1994 and 60 in 1995,how much would his marginal productivity be in 1995?

Accepted Answer

A) 10 
B) 50 
C) 55 
D) 60 
A) 10 
B) 50 
C) 55 
D) 60

Question 12

Is the firm a perfect competitor or an imperfect competitor? Explain your answer in one sentence.

Accepted Answer

An imperfect competi

Question 13

An increase in the price of crude oil,a basic input into the production of gasoline,is likely to

Accepted Answer

A) put downward pressure on the price of gasoline. 
B) put upward pressure on the price of gasoline. 
C) decrease the demand for gasoline. 
D) increase the quantity of gasoline demandeD. 
A) put downward pressure on the price of gasoline. 
B) put upward pressure on the price of gasoline. 
C) decrease the demand for gasoline. 
D) increase the quantity of gasoline demandeD.

Question 14

If the demand for fast food declines sharply,the marginal revenue product curve for fast food workers will

Accepted Answer

A) shift to the left. 
B) shift to the right. 
C) stay exactly where it is. 
A) shift to the left. 
B) shift to the right. 
C) stay exactly where it is.

Question 15

The demand for a resource is derived mainly from the demand for __________.

Accepted Answer

The answer of The demand for a resource is derived...

Question 16

If Kelly's output per hour in 1995 were 100 and her output per hour in 1996 were 105,how much would her productivity be in 1996?

Accepted Answer

A) 5 
B) 100 
C) 102.5 
D) 105 
E) Impossible to calculate 
A) 5 
B) 100 
C) 102.5 
D) 105 
E) Impossible to calculate

Question 17

A firm will use more and more land until the marginal revenue product of land

Accepted Answer

A) rises to the level of the rent. 
B) falls to the level of the rent. 
C) rises above the level of the rent. 
D) falls below the level of the rent. 
A) rises to the level of the rent. 
B) falls to the level of the rent. 
C) rises above the level of the rent. 
D) falls below the level of the rent.

Question 18

Factors of production that can be used together to enhance the other's productivity are

Accepted Answer

A) proportionate inputs. 
B) complementary inputs. 
C) duplicate inputs. 
D) substitutable inputs. 
A) proportionate inputs. 
B) complementary inputs. 
C) duplicate inputs. 
D) substitutable inputs.

Question 19

Derived demand is a demand for

Accepted Answer

A) final goods and services. 
B) intermediate goods like steel and plastics. 
C) resources used only by monopolies. 
D) factors of production. 
A) final goods and services. 
B) intermediate goods like steel and plastics. 
C) resources used only by monopolies. 
D) factors of production.

Question 20

If the wage rate were $15,how many workers would be hired?

Accepted Answer

The answer of If the wage rate were $15,how many...

Exam 26: Demand in the Factor Market

If a large decrease in the cost of capital leads to a firm increasing the labor it uses

The output effect states that if the price of a resource _________,output of the final product will _________.

Land and capital are substitutes.If rent goes up and the amount of capital used goes up,we can assume that the

Units of Input Units of Outputs 1 3 2 7 3 10 4 12 5 13 6 12 -The maximum units of input you would possibly hire is

The optimum resource mix for a firm would be

When the price of a resource _________,the demand for a complementary resource ___________;when price of a resource _________,the demand for a complementary resource _________.

As output rises,

Productivity is _________ per unit of __________.

If the wage rate were $156,how many workers would be hired?

Statement I: The substitution effect states that if the price of a resource rises,other resources will be substituted for it. Statement II: The concept of margin is central to economic analysis.

If Max's output per hour were 50 in 1994 and 60 in 1995,how much would his marginal productivity be in 1995?

Is the firm a perfect competitor or an imperfect competitor? Explain your answer in one sentence.

An increase in the price of crude oil,a basic input into the production of gasoline,is likely to

If the demand for fast food declines sharply,the marginal revenue product curve for fast food workers will

The demand for a resource is derived mainly from the demand for __________.

If Kelly's output per hour in 1995 were 100 and her output per hour in 1996 were 105,how much would her productivity be in 1996?

A firm will use more and more land until the marginal revenue product of land

Factors of production that can be used together to enhance the other's productivity are

Derived demand is a demand for

If the wage rate were $15,how many workers would be hired?

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

Filters

The output effect states that if the price of a resource _,output of the final product will _.

When the price of a resource ___,the demand for a complementary resource _;when price of a resource _,the demand for a complementary resource _____.

Productivity is _ per unit of __.