Question 1

Andy's individual labor supply curve is positively sloped, so for Andy, the substitution effect dominates the income effect.

Accepted Answer

A) True 
 B)False

Question 2

In 2012, fewer than 10% of the employees of private businesses were represented by unions.

Accepted Answer

A) True 
 B)False

Question 3

Firms that engage in discrimination are usually more profitable than firms that don't discriminate.

Accepted Answer

A) True 
 B)False

Question 4

Use the following to answer questions :  
-(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords. Assume that the market for power cords is perfectly competitive. If the price of a power cord is $2, the value of the marginal product for the fifth worker is:

Accepted Answer

A)  $0. 
B)  $20. 
C)  $40. 
D)  $60. 
A)  $0. 
B)  $20. 
C)  $40. 
D)  $60.

Question 5

Use the following to answer questions 
Figure: The Demand for Bricklayers  
-(Figure: The Demand for Bricklayers) Look at the figure The Demand for Bricklayers. The equilibrium market wage for bricklayers is $100 a day, but a minimum wage of $130 a day for bricklayers is set by the government. As a result:

Accepted Answer

A)  six workers will now be hired by the firm. 
B)  three workers who otherwise would have been employed are now unemployed. 
C)  all bricklayers are better off. 
D)  construction firms will shut down. 
A)  six workers will now be hired by the firm. 
B)  three workers who otherwise would have been employed are now unemployed. 
C)  all bricklayers are better off. 
D)  construction firms will shut down.

Question 6

Women, regardless of ethnicity, earn:

Accepted Answer

A)  the same as White men. 
B)  about twice as much as White men. 
C)  about 70% of the earnings for White men. 
D)  about 25% of the earnings for White men. 
A)  the same as White men. 
B)  about twice as much as White men. 
C)  about 70% of the earnings for White men. 
D)  about 25% of the earnings for White men.

Question 7

In the past 30 years, the ability of unions to increase wages and improve working conditions for their members has:

Accepted Answer

A)  increased. 
B)  decreased. 
C)  remained constant. 
D)  proved the marginal productivity theory of income distribution to be false. 
A)  increased. 
B)  decreased. 
C)  remained constant. 
D)  proved the marginal productivity theory of income distribution to be false.

Question 8

The marginal product times product price equals the:

Accepted Answer

A)  marginal revenue. 
B)  value of the marginal product. 
C)  additional revenue product. 
D)  marginal cost. 
A)  marginal revenue. 
B)  value of the marginal product. 
C)  additional revenue product. 
D)  marginal cost.

Question 9

A firm's demand curve for labor is:

Accepted Answer

A)  its marginal cost curve. 
B)  its marginal product curve. 
C)  its value of the marginal product of labor curve. 
D)  horizontal if it is in perfect competition. 
A)  its marginal cost curve. 
B)  its marginal product curve. 
C)  its value of the marginal product of labor curve. 
D)  horizontal if it is in perfect competition.

Question 10

Use the following to answer questions :  
-(Table: Total Product of Labor at Debbie's Bakery) Look at the table Total Product of Labor at Debbie's Bakery. Debbie can sell cakes at $8 each. Debbie must pay each worker $45 per day. How many workers will she hire to maximize profit?

Accepted Answer

A)  two 
B)  three 
C)  four 
D)  five 
A)  two 
B)  three 
C)  four 
D)  five

Question 11

The more work people do, all other things unchanged, the:

Accepted Answer

A)  more their free time. 
B)  greater their nonmarket use of time. 
C)  less income they have. 
D)  less leisure they have. 
A)  more their free time. 
B)  greater their nonmarket use of time. 
C)  less income they have. 
D)  less leisure they have.

Question 12

A firm has hired the profit-maximizing number of workers when the wage is:

Accepted Answer

A)  less than the price of the product. 
B)  greater than the average product of the last worker hired. 
C)  equal to the average product of the last worker hired. 
D)  equal to the value of the marginal product of labor of the last worker hired. 
A)  less than the price of the product. 
B)  greater than the average product of the last worker hired. 
C)  equal to the average product of the last worker hired. 
D)  equal to the value of the marginal product of labor of the last worker hired.

Question 13

Use the following to answer questions 
Figure: The Demand for Bricklayers  
-(Figure: The Demand for Bricklayers) Look at the figure The Demand for Bricklayers. If the price for bricks laid in the wall is $0.10 a brick, the marginal product of the second bricklayer is _____ bricks.

Accepted Answer

A)  1,500 
B)  1,400 
C)  1,300 
D)  1,200 
A)  1,500 
B)  1,400 
C)  1,300 
D)  1,200

Question 14

Which of the following is an input in the production of croissants?

Accepted Answer

A)  ovens 
B)  pastry chefs 
C)  flour 
D)  dough mixers 
A)  ovens 
B)  pastry chefs 
C)  flour 
D)  dough mixers

Question 15

Suppose a firm sells a good for a perfectly competitive price of $5. The equilibrium wage rate is $10. The first worker it hires produces five units. Two workers produce a total of nine units. If it hires two workers, the value of marginal product for the second worker is:

Accepted Answer

A)  $5. 
B)  $45. 
C)  $20. 
D)  $10. 
A)  $5. 
B)  $45. 
C)  $20. 
D)  $10.

Question 16

Liyun owns a small flower shop, and the industry is perfectly competitive. She is considering whether to hire an additional worker. The wage rate for the worker is $500 per week; the marginal product of the additional worker would be 100 units per week; and the price of the units is $10 each. What should Liyun do?

Accepted Answer

A)  hire the additional worker 
B)  not hire the additional worker 
C)  raise the price of the flower arrangements that she sells 
D)  Not enough information is given to answer the question. 
A)  hire the additional worker 
B)  not hire the additional worker 
C)  raise the price of the flower arrangements that she sells 
D)  Not enough information is given to answer the question.

Question 17

Barry's Brewpub is considering hiring more brewmasters. The market wage for a brewmaster is $120 per day. The average brewmaster produces 40 pints of beer per day, but Barry expects the next brewmaster to produce only 20 pints per day. Assuming the market for beer is perfectly competitive, Barry's Brewpub will hire another brewmaster only if:

Accepted Answer

A)  a pint of brew sells for $3. 
B)  the new brewmaster can produce 40 pints. 
C)  a pint of brew sells for $2. 
D)  a pint of brew sells for $6 or more. 
A)  a pint of brew sells for $3. 
B)  the new brewmaster can produce 40 pints. 
C)  a pint of brew sells for $2. 
D)  a pint of brew sells for $6 or more.

Question 18

The opportunity cost of an extra hour of leisure is:

Accepted Answer

A)  $1. 
B)  the hourly wage rate. 
C)  the same as the price of money. 
D)  always less than the value of the marginal product of labor. 
A)  $1. 
B)  the hourly wage rate. 
C)  the same as the price of money. 
D)  always less than the value of the marginal product of labor.

Question 19

An increase in the demand for autoworkers may come about because of all of the following EXCEPT a(n):

Accepted Answer

A)  increase in the price of cars. 
B)  decrease in the market wage rate. 
C)  increase in the productivity of autoworkers. 
D)  increase in the supply of other factors that autoworkers use in production. 
A)  increase in the price of cars. 
B)  decrease in the market wage rate. 
C)  increase in the productivity of autoworkers. 
D)  increase in the supply of other factors that autoworkers use in production.

Question 20

Use the following to answer questions 
Figure: The Value of the Marginal Product Curve  
-(Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, if a technological advance makes labor more productive and everything else stays the same, then the profit-maximizing quantity of labor:

Accepted Answer

A)  will increase. 
B)  will decrease. 
C)  will stay the same. 
D)  cannot be determined. 
A)  will increase. 
B)  will decrease. 
C)  will stay the same. 
D)  cannot be determined.

Exam 18: Factor Markets and the Distribution of Income

Andy's individual labor supply curve is positively sloped, so for Andy, the substitution effect dominates the income effect.

In 2012, fewer than 10% of the employees of private businesses were represented by unions.

Firms that engage in discrimination are usually more profitable than firms that don't discriminate.

Women, regardless of ethnicity, earn:

In the past 30 years, the ability of unions to increase wages and improve working conditions for their members has:

The marginal product times product price equals the:

A firm's demand curve for labor is:

Use the following to answer questions : -(Table: Total Product of Labor at Debbie's Bakery) Look at the table Total Product of Labor at Debbie's Bakery. Debbie can sell cakes at $8 each. Debbie must pay each worker $45 per day. How many workers will she hire to maximize profit?

The more work people do, all other things unchanged, the:

A firm has hired the profit-maximizing number of workers when the wage is:

Use the following to answer questions Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers) Look at the figure The Demand for Bricklayers. If the price for bricks laid in the wall is $0.10 a brick, the marginal product of the second bricklayer is _____ bricks.

Which of the following is an input in the production of croissants?

Suppose a firm sells a good for a perfectly competitive price of $5. The equilibrium wage rate is $10. The first worker it hires produces five units. Two workers produce a total of nine units. If it hires two workers, the value of marginal product for the second worker is:

The opportunity cost of an extra hour of leisure is:

An increase in the demand for autoworkers may come about because of all of the following EXCEPT a(n):

First Principles

Economic Models- Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas- Meddling With Markets

Elasticity

Taxes

The Rational Consumer

International Trade

Decision Making by Individuals and Firms

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Uncertainty, Risk, and Private Information

Macroeconomics- the Big Picture

Gdp and the Consumer Price Index

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Macroeconomics- Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

Toward a Fuller Understanding

Consumer Preferences and Consumer Choice

Indifference Curve Analysis of Labor Supply

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