Exam 18: Factor Markets and the Distribution of Income

In the United States just after the turn of the twenty-first century, approximately _____ of total income in the economy took the form of compensation of employees.

A _____ wage will _____ the _____ leisure.

According to the marginal productivity theory of income distribution, in a competitive economy each factor of production is paid its equilibrium value of the marginal product.

At Hamill Manufacturing of Pennsylvania highly skilled senior machinists are paid $70,000, excluding benefits, but the average skilled machinist generates approximately $137,000 in value added. This is due partially to the fact that the wage rate includes other costs, such as employee benefits, that have to be added to the $70,000 salary.

When a person becomes better educated and is able to produce a better product, the person's education is an improvement in:

Which of the following groups has the LOWEST median earnings in the U.S. labor market?

In the U.S. labor market, women of all ethnicities have the highest median earnings.

Which of the following will NOT shift the labor supply curve?

Now that Naila has her bachelor's degree, she has decided to pursue her master's degree. Naila's choice of additional education is called an investment in:

Unions are organizations of workers that try to raise wages and improve working conditions for their members through collective bargaining with employers.

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 total production of bricks by the first three bricklayers is _____ bricks.

Use the following to answer questions -(Table: Workers and Corn Output) Look at the table Workers and Corn Output. Laura is a price-taking farmer who produces corn. Assume the wage rate for workers is $125 and the price per bushel of corn is $10. Suppose Laura is employing seven workers. If she reduces employment to six workers, her profits will:

Use the following to answer questions -(Table: Workers and Corn Output) Look at the table Workers and Corn Output. Laura is a price-taking farmer who produces corn. Assume the wage rate for workers is $250 and the price per bushel of corn is $20. Laura should hire _____ workers to maximize profits.

Suppose there are diminishing returns to labor. If the _____ of labor hired by a firm increases, holding everything else constant, the _____ labor will _____.

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 and the market wage rate is $60 per hour, the profit-maximizing quantity of labor is _____ workers.

The quantity demanded of labor will decrease if:

Which of the following formulas is CORRECT?

Capital, the factor of production, includes physical capital (such as buildings and machines), human capital (improvement in labor by education and knowledge), and financial capital (such as stock market investments).

The marginal productivity theory of income distribution assumes that factor markets are oligopolies.

Beyond some point, a higher wage may induce an individual to work _____, and the labor supply curve may then _____.