Question 1

A technological advance that increases the marginal product of labor will

Accepted Answer

A) decrease the demand for labor. 
B) increase the supply for labor. 
C) decrease the supply for labor. 
D) increase the demand for labor. 
A) decrease the demand for labor. 
B) increase the supply for labor. 
C) decrease the supply for labor. 
D) increase the demand for labor.

Question 2

The substitution effect and the output effect work in the

Accepted Answer

A) same direction some of the time. 
B) same direction all of the time. 
C) opposite direction some of the time. 
D) opposite direction all of the time. 
A) same direction some of the time. 
B) same direction all of the time. 
C) opposite direction some of the time. 
D) opposite direction all of the time.

Question 3

Which of the following will not cause the demand curve for labor to shift?

Accepted Answer

A) An increase in the wage rate. 
B) An increase in the price of the final product. 
C) An increase in the price of a substitute factor of production. 
D) A change in demand for the final product. 
E) An improvement in technology that produces higher labor productivity. 
A) An increase in the wage rate. 
B) An increase in the price of the final product. 
C) An increase in the price of a substitute factor of production. 
D) A change in demand for the final product. 
E) An improvement in technology that produces higher labor productivity.

Question 4

The additional revenue obtained by selling the output produced by one more unit of a resource is its

Accepted Answer

A) marginal physical product. 
B) marginal revenue product. 
C) final demand. 
D) average revenue product. 
A) marginal physical product. 
B) marginal revenue product. 
C) final demand. 
D) average revenue product.

Question 5

In general,as units of resource inputs rise,the marginal revenue product

Accepted Answer

A) rises faster under imperfect competition than under perfect competition. 
B) rises faster under perfect competition than under imperfect competition. 
C) falls faster under perfect competition than under imperfect competition. 
D) falls faster under imperfect competition than under perfect competition. 
A) rises faster under imperfect competition than under perfect competition. 
B) rises faster under perfect competition than under imperfect competition. 
C) falls faster under perfect competition than under imperfect competition. 
D) falls faster under imperfect competition than under perfect competition.

Question 6

Suppose that the marginal revenue product of the eighth worker hired is $12 an hour and the wage rate is $10 an hour.We can say that

Accepted Answer

A) not enough labor is being hired. 
B) just enough labor is being hired. 
C) too much labor is being hired. 
A) not enough labor is being hired. 
B) just enough labor is being hired. 
C) too much labor is being hired.

Question 7

In 1973 the Russian wheat crop failed and the Soviet Union made massive purchases of American wheat.Which statement is a result of this action?

Accepted Answer

A) The demand for farm labor and farmland was driven down in the United States. 
B) There was no effect on the demand for farm labor and farmland in the United States. 
C) The demand for farm labor and farmland was driven up in the United States. 
D) None of these statements are true. 
A) The demand for farm labor and farmland was driven down in the United States. 
B) There was no effect on the demand for farm labor and farmland in the United States. 
C) The demand for farm labor and farmland was driven up in the United States. 
D) None of these statements are true.

Question 8

If the wage rate were $45,how many workers would be hired?

Accepted Answer

The answer of If the wage rate were $45,how many...

Question 9

Workers in one country are more productive than workers in another country because

Accepted Answer

A) they have fewer complementary factors to work with. 
B) they have more complementary factors to work with. 
C) they are better motivated and paid. 
A) they have fewer complementary factors to work with. 
B) they have more complementary factors to work with. 
C) they are better motivated and paid.

Question 10

The demand for an input is called a derived demand because

Accepted Answer

A) employers of inputs,particularly labor,derive income from using inputs. 
B) employers derive satisfaction from giving employment to an input. 
C) the demand for output is derived from the demand for the inputs used to produce it. 
D) it arises from the demand for the output that the input is used to produce. 
A) employers of inputs,particularly labor,derive income from using inputs. 
B) employers derive satisfaction from giving employment to an input. 
C) the demand for output is derived from the demand for the inputs used to produce it. 
D) it arises from the demand for the output that the input is used to produce.

Question 11

If a large decrease in rent leads to a firm cutting back on the labor it uses,

Accepted Answer

A) 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 of determining the relative strengths of the output and substitution effects. 
A) 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 of determining the relative strengths of the output and substitution effects.

Question 12

If a firm acquires new machines that complement labor

Accepted Answer

A) there will be no effect on the marginal product of labor curve. 
B) the amount of labor services hired will decrease. 
C) the marginal revenue product of labor curve will shift upward. 
D) the marginal revenue product of labor curve will shift downwarD. 
A) there will be no effect on the marginal product of labor curve. 
B) the amount of labor services hired will decrease. 
C) the marginal revenue product of labor curve will shift upward. 
D) the marginal revenue product of labor curve will shift downwarD.

Question 13

The substitution effect and the output effect

Accepted Answer

A) always work in the same direction. 
B) sometimes work in the same direction. 
C) always work in the opposite direction. 
D) sometimes work in the opposite direction. 
A) always work in the same direction. 
B) sometimes work in the same direction. 
C) always work in the opposite direction. 
D) sometimes work in the opposite direction.

Question 14

If the prices of cars doubled,the MRP schedule for autoworkers would

Accepted Answer

A) rise. 
B) fall. 
C) stay about the same. 
A) rise. 
B) fall. 
C) stay about the same.

Question 15

As we use more and more units of a resource,the MRP

Accepted Answer

A) rises sharply. 
B) rises slowly. 
C) remains the same. 
D) declines. 
A) rises sharply. 
B) rises slowly. 
C) remains the same. 
D) declines.

Question 16

$$\begin{array} { c c c c c c } 
\begin{array} { c } 
\text { Units } \
\text { of } \
\text { Labor }
\end{array} & \text { Output } & \begin{array} { c } 
\text { Marginal } \
\text { Physical } \
\text { Product }
\end{array} & \begin{array} { c } 
\text { Total } \
\text { Price }
\end{array} & \begin{array} { r } 
\text { Revenue } \
\text { Product }
\end{array} & \begin{array} { c } 
\text { Parginal } \
\text { Pevenue } \
\text { Product }
\end{array} \
1 & 32 && \$ 20 \
2 & 63 && 19 \
3 & 92 && 18 \
4 & 117 && 17 \
5 & 136 && 16 \
6 & 146 && 15 \
7 & 151 && 14 \
8 & 152 && 13
\end{array}$$
-Fill in the above table.

Accepted Answer

The answer of \[\begin{array} { c c c c c...

Question 17

If the wage rate were $25,how many workers would be hired?

Accepted Answer

The answer of If the wage rate were $25,how many...

Question 18

If the wage rate were $90,how many workers would be hired?

Accepted Answer

The answer of If the wage rate were $90,how many...

Question 19

Suppose that the MRP of the sixth acre of land is $200 and the rent paid on that land is $200.We can say that

Accepted Answer

A) not enough land is being rented. 
B) just enough land is being rented. 
C) too much land is being rented. 
A) not enough land is being rented. 
B) just enough land is being rented. 
C) too much land is being rented.

Question 20

The primary difference between marginal revenue product for the perfect and imperfect competitor is

Accepted Answer

A) the determination of the output price. 
B) the effective use of capital. 
C) the differences in calculation of total revenue. 
D) the concept of marginal analysis. 
A) the determination of the output price. 
B) the effective use of capital. 
C) the differences in calculation of total revenue. 
D) the concept of marginal analysis.

Exam 26: Demand in the Factor Market

A technological advance that increases the marginal product of labor will

The substitution effect and the output effect work in the

Which of the following will not cause the demand curve for labor to shift?

The additional revenue obtained by selling the output produced by one more unit of a resource is its

In general,as units of resource inputs rise,the marginal revenue product

Suppose that the marginal revenue product of the eighth worker hired is $12 an hour and the wage rate is $10 an hour.We can say that

In 1973 the Russian wheat crop failed and the Soviet Union made massive purchases of American wheat.Which statement is a result of this action?

If the wage rate were $45,how many workers would be hired?

Workers in one country are more productive than workers in another country because

The demand for an input is called a derived demand because

If a large decrease in rent leads to a firm cutting back on the labor it uses,

If a firm acquires new machines that complement labor

The substitution effect and the output effect

If the prices of cars doubled,the MRP schedule for autoworkers would

As we use more and more units of a resource,the MRP

Units of Labor Output Marginal Physical Product Total Price Revenue Product Parginal Pevenue Product 1 32 \ 20 2 63 19 3 92 18 4 117 17 5 136 16 6 146 15 7 151 14 8 152 13 -Fill in the above table.

If the wage rate were $25,how many workers would be hired?

If the wage rate were $90,how many workers would be hired?

Suppose that the MRP of the sixth acre of land is $200 and the rent paid on that land is $200.We can say that

The primary difference between marginal revenue product for the perfect and imperfect competitor is

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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