Question 1

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

Accepted Answer

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

Question 2

To maximize profits,a firm will employ workers until for the last worker employed:

Accepted Answer

A)  marginal product of labour is equal to the nominal wage rate. 
B)  the value of the marginal product of labour is equal to the wage rate. 
C)  the value of the marginal product of labour is equal to the price per unit of output. 
D)  the value of the marginal product of labour is as high as possible. 
A)  marginal product of labour is equal to the nominal wage rate. 
B)  the value of the marginal product of labour is equal to the wage rate. 
C)  the value of the marginal product of labour is equal to the price per unit of output. 
D)  the value of the marginal product of labour is as high as possible. B

Question 3

Maria operates a persimmon orchard in southeastern Ontario.She pays her workers $248 per week to pick and process persimmons,and she sells her persimmons for $6 per kilogram.If she adds one more worker and that worker can pick and process 44 kilograms per week,what will be the profit for Maria from hiring that worker?

Accepted Answer

A)  $0 
B)  $16 
C)  $264 
D)  $544 
A)  $0 
B)  $16 
C)  $264 
D)  $544 B

Question 4

The LARGEST component of the factor distribution of income in Canada is:

Accepted Answer

A)  interest and rents. 
B)  taxes. 
C)  corporate profits. 
D)  compensation of employees. 
A)  interest and rents. 
B)  taxes. 
C)  corporate profits. 
D)  compensation of employees.

Question 5

An objection to the marginal productivity theory of income distribution is that many people believe it is a moral justification for the unequal distribution of income.

Accepted Answer

A) True 
 B)False

Question 6

At Hamill Manufacturing of Alberta,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.

Accepted Answer

A) True 
 B)False

Question 7

The importance of human capital has been increased by technological progress.

Accepted Answer

A) True 
 B)False

Question 8

Use the following to answer questions :
Scenario: The Decision to Hire Labour
Assume that both the product market and the labour market are perfectly competitive.The price of this firm's product is $5.The firm's total product with respect to labour is given in the table that follows. $\begin{array}{llcc}
 \hline  \text { Quantity } &  \
 \text { of Labour } & \text {  Quantity } \
 \text { (workers)  } & \text {of Output  }\
\hline 0&0\
1 &7\
2 &13\
3&18\
4&21\
\hline
\end{array}$

-(Scenario: The Decision to Hire Labour)Use Scenario: The Decision to Hire Labour.The marginal product of the fourth worker is:

Accepted Answer

A)  7 
B)  21 
C)  3 
D)  15 
A)  7 
B)  21 
C)  3 
D)  15

Question 9

Use the following to answer questions :  
-(Table: Employment and Output)Use Table: Employment and Output.In the table,if the price of a kilogram of wheat is $10,then the value of the marginal product of the fifth worker is:

Accepted Answer

A)  $11. 
B)  $110. 
C)  $90. 
D)  $750. 
A)  $11. 
B)  $110. 
C)  $90. 
D)  $750.

Question 10

A firm's demand curve for labour in a perfectly competitive market is the downward-sloping portion of its _____ curve.

Accepted Answer

A)  marginal revenue 
B)  average total cost 
C)  value of the marginal product of labour 
D)  total revenue 
A)  marginal revenue 
B)  average total cost 
C)  value of the marginal product of labour 
D)  total revenue

Question 11

The key distinction between a factor of production and an input is that:

Accepted Answer

A)  an input is an enduring source of income,but a factor of production is used up in production. 
B)  a factor of production earns income from selling its services over and over again,but an input does not. 
C)  an input earns income from selling its services over and over again,but a factor of production does not. 
D)  a factor of production has limited earning potential. 
A)  an input is an enduring source of income,but a factor of production is used up in production. 
B)  a factor of production earns income from selling its services over and over again,but an input does not. 
C)  an input earns income from selling its services over and over again,but a factor of production does not. 
D)  a factor of production has limited earning potential.

Question 12

In Canada in 2016,approximately _____% of total income in the economy took the form of compensation of employees.

Accepted Answer

A)  47 
B)  9 
C)  90 
D)  58 
A)  47 
B)  9 
C)  90 
D)  58

Question 13

One objection to the marginal productivity theory of income distribution is the absence of large disparities in income between men and women and various ethnic groups.

Accepted Answer

A) True 
 B)False

Question 14

Use the following to answer questions :
Scenario: The Decision to Hire Labour
Assume that both the product market and the labour market are perfectly competitive.The price of this firm's product is $5.The firm's total product with respect to labour is given in the table that follows. $\begin{array}{llcc}
 \hline  \text { Quantity } &  \
 \text { of Labour } & \text {  Quantity } \
 \text { (workers)  } & \text {of Output  }\
\hline 0&0\
1 &7\
2 &13\
3&18\
4&21\
\hline
\end{array}$

-(Scenario: The Decision to Hire Labour)Use Scenario: The Decision to Hire Labour.Holding everything else constant,if the demand for this firm's product decreases:

Accepted Answer

A)  its value of marginal product curve shifts to the right,and it will hire more workers. 
B)  its value of marginal product curve shifts to the left,and it will hire more workers. 
C)  its value of marginal product curve shifts to the left,and it will hire fewer workers. 
D)  the firm will not change its hiring,since it is a perfectly competitive firm. 
A)  its value of marginal product curve shifts to the right,and it will hire more workers. 
B)  its value of marginal product curve shifts to the left,and it will hire more workers. 
C)  its value of marginal product curve shifts to the left,and it will hire fewer workers. 
D)  the firm will not change its hiring,since it is a perfectly competitive firm.

Question 15

The amount by which the use of an additional unit of a factor of production increases a firm's total revenue during a period is called the:

Accepted Answer

A)  value of the marginal product. 
B)  average product. 
C)  marginal factor cost. 
D)  marginal physical product. 
A)  value of the marginal product. 
B)  average product. 
C)  marginal factor cost. 
D)  marginal physical product.

Question 16

Oscar's Flower Shop maximizes profits by hiring 4 workers in a perfectly competitive labour market.The workers and their value of the marginal product of labour are Noe,$40;Barbara,$35;Calvin,$27;and Diana,$15.According to the marginal productivity theory of income distribution,which statement is TRUE?

Accepted Answer

A)  In equilibrium,each worker is paid his or her value of the marginal product of labour. 
B)  Each worker is paid a wage equal to the highest value of the marginal product of labour . 
C)  Each worker is paid $15. 
D)  We need to know the product price before we can figure out the wage rate. 
A)  In equilibrium,each worker is paid his or her value of the marginal product of labour. 
B)  Each worker is paid a wage equal to the highest value of the marginal product of labour . 
C)  Each worker is paid $15. 
D)  We need to know the product price before we can figure out the wage rate.

Question 17

The amount by which an additional unit of a factor increases a firm's total _____ during a period is the _____.

Accepted Answer

A)  revenue;value of the marginal product 
B)  revenue;marginal factor cost 
C)  cost;value of marginal product 
D)  cost;marginal product 
A)  revenue;value of the marginal product 
B)  revenue;marginal factor cost 
C)  cost;value of marginal product 
D)  cost;marginal product

Question 18

A higher wage _____ the price of _____ and _____ workers' incomes.The result pulls the quantity of labour supplied in _____ direction(s).

Accepted Answer

A)  increases;leisure;increases;opposite 
B)  increases;leisure;increases;the same 
C)  reduces;work effort;reduces;opposite 
D)  reduces;labour;increases;the same 
A)  increases;leisure;increases;opposite 
B)  increases;leisure;increases;the same 
C)  reduces;work effort;reduces;opposite 
D)  reduces;labour;increases;the same

Question 19

The category "compensation of employees" doesn't capture the full income of labour because:

Accepted Answer

A)  it doesn't include the earnings of proprietors. 
B)  it doesn't include benefits such as health insurance. 
C)  a sizable fraction of it can be attributed to the return on human capital. 
D)  it excludes payments in kind that are common in rural areas. 
A)  it doesn't include the earnings of proprietors. 
B)  it doesn't include benefits such as health insurance. 
C)  a sizable fraction of it can be attributed to the return on human capital. 
D)  it excludes payments in kind that are common in rural areas.

Question 20

Use the following to answer questions :
Figure: The Demand for Bricklayers  
-(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If a shortage in the market for mortar lowers bricklayers' productivity,then the value of the marginal product of the eighth bricklayer will be:

Accepted Answer

A)  less than $80. 
B)  greater than $100. 
C)  equal to $100. 
D)  greater than $80. 
A)  less than $80. 
B)  greater than $100. 
C)  equal to $100. 
D)  greater than $80.

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

To maximize profits,a firm will employ workers until for the last worker employed:

The LARGEST component of the factor distribution of income in Canada is:

An objection to the marginal productivity theory of income distribution is that many people believe it is a moral justification for the unequal distribution of income.

The importance of human capital has been increased by technological progress.

Use the following to answer questions : -(Table: Employment and Output)Use Table: Employment and Output.In the table,if the price of a kilogram of wheat is $10,then the value of the marginal product of the fifth worker is:

A firm's demand curve for labour in a perfectly competitive market is the downward-sloping portion of its _____ curve.

The key distinction between a factor of production and an input is that:

In Canada in 2016,approximately _____% of total income in the economy took the form of compensation of employees.

One objection to the marginal productivity theory of income distribution is the absence of large disparities in income between men and women and various ethnic groups.

The amount by which the use of an additional unit of a factor of production increases a firm's total revenue during a period is called the:

The amount by which an additional unit of a factor increases a firm's total _ during a period is the _.

A higher wage ___ the price of _ and _ workers' incomes.The result pulls the quantity of labour supplied in ___ direction(s).

The category "compensation of employees" doesn't capture the full income of labour because:

Use the following to answer questions : Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If a shortage in the market for mortar lowers bricklayers' productivity,then the value of the marginal product of the eighth bricklayer will be:

First Principles

Economic Models

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve- Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Uncertainty, risk, and Private Information

Graphs in Economics

Consumer Preferences

Indifference Curve Analysis

Filters

Exam 19: Factor Markets and the Distribution of Income

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

To maximize profits,a firm will employ workers until for the last worker employed:

The LARGEST component of the factor distribution of income in Canada is:

An objection to the marginal productivity theory of income distribution is that many people believe it is a moral justification for the unequal distribution of income.

The importance of human capital has been increased by technological progress.

Use the following to answer questions : -(Table: Employment and Output)Use Table: Employment and Output.In the table,if the price of a kilogram of wheat is $10,then the value of the marginal product of the fifth worker is:

A firm's demand curve for labour in a perfectly competitive market is the downward-sloping portion of its _____ curve.

The key distinction between a factor of production and an input is that:

In Canada in 2016,approximately _____% of total income in the economy took the form of compensation of employees.

One objection to the marginal productivity theory of income distribution is the absence of large disparities in income between men and women and various ethnic groups.

The amount by which the use of an additional unit of a factor of production increases a firm's total revenue during a period is called the:

The amount by which an additional unit of a factor increases a firm's total _____ during a period is the _____.

A higher wage _____ the price of _____ and _____ workers' incomes.The result pulls the quantity of labour supplied in _____ direction(s).

The category "compensation of employees" doesn't capture the full income of labour because:

Use the following to answer questions : Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If a shortage in the market for mortar lowers bricklayers' productivity,then the value of the marginal product of the eighth bricklayer will be:

First Principles

Economic Models

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve- Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Uncertainty, risk, and Private Information

Graphs in Economics

Consumer Preferences

Indifference Curve Analysis

Filters

The amount by which an additional unit of a factor increases a firm's total _ during a period is the _.

A higher wage ___ the price of _ and _ workers' incomes.The result pulls the quantity of labour supplied in ___ direction(s).