Question 1

Immigration is when:

Accepted Answer

A)  foreign persons enter another country. 
B)  foreign persons leave another country. 
C)  citizens move to another country. 
D)  citizens move within their own country. 
E)  foreign persons move within their own country. 
A)  foreign persons enter another country. 
B)  foreign persons leave another country. 
C)  citizens move to another country. 
D)  citizens move within their own country. 
E)  foreign persons move within their own country.

Question 2

Joe has several different offers for his land, which is located in the city center. He currently rents the land to a community-supported agriculture (CSA) farm for $5,000 per month. The city is offering a yearly rent payment of $12,000, to be paid in monthly installments, to put in a city park. Calculate the economic rent Joe is earning and use it to decide whether he should rent his land to the city.

Accepted Answer

First, convert the $12,000 to monthly in

Question 3

Derived demand best describes the demand for which of the following options?

Accepted Answer

A)  cupcakes 
B)  water bottles 
C)  hair stylists 
D)  cat food 
E)  cars 
A)  cupcakes 
B)  water bottles 
C)  hair stylists 
D)  cat food 
E)  cars

Question 4

Doctors must complete four years of undergraduate education and four years of medical school, and work three to eight years in a hospital before they can fully practice on their own. In contrast, a worker at a fast-food restaurant need not complete high school.
a. How does the difference in education and training affect the relative labor supply in these professions?
b. Using a supply and demand graph and your answer to part a, show why doctors earn higher wages than fast-food workers do.

Accepted Answer

a. There will be a smaller supply of doc

Question 5

If demand for land increases, the rental price _________ and the equilibrium amount of land _________.

Accepted Answer

A)  increases; falls 
B)  decreases; increases 
C)  increases; increases 
D)  decreases; stays the same 
E)  increases; stays the same 
A)  increases; falls 
B)  decreases; increases 
C)  increases; increases 
D)  decreases; stays the same 
E)  increases; stays the same

Question 6

Graph the impact of the following events in the market for typists. Your graph should include shifting the appropriate curve and indicate the change to equilibrium wage W1 and quantity of labor L1.
a. The introduction of new ergonomic keyboards increases the rate at which typists can complete their tasks.
b. The main supplies typists use-computers, desks, and chairs-are all increasing in cost for their bosses.
c. The conditions in a similar profession, such as office manager, are superior in terms of pay and benefits.

Accepted Answer

a. This increase in productivity will sh

Question 7

A situation with only one buyer of labor is called a(n):

Accepted Answer

A)  monopoly. 
B)  oligopoly. 
C)  monopsony. 
D)  labor market equilibrium. 
E)  labor market disequilibrium. 
A)  monopoly. 
B)  oligopoly. 
C)  monopsony. 
D)  labor market equilibrium. 
E)  labor market disequilibrium.

Question 8

Use the accompanying graph, which depicts Mighty Max's labor demand for his duffle-bag business, to answer the  questions.  
-Assume that the price per duffle bag rises from $10 to $20. What is the value of the marginal product of labor of the twentieth worker?

Accepted Answer

A)  $30 
B)  $40 
C)  $50 
D)  $60 
E)  $70 
A)  $30 
B)  $40 
C)  $50 
D)  $60 
E)  $70

Question 9

The labor supply curve is given by the equation LS = 3W + 20 and the labor demand curve is given by the equation LD = 80 − 2W. The equilibrium wage in this labor market is:

Accepted Answer

A)  $10. 
B)  $12. 
C)  $36. 
D)  $56. 
E)  $80. 
A)  $10. 
B)  $12. 
C)  $36. 
D)  $56. 
E)  $80.

Question 10

Companies begin to find that customers, when calling customer service, want to talk to real people rather than to a recording. What will happen to demand for receptionists and the market equilibrium wage?

Accepted Answer

A)  Demand will fall; the equilibrium wage will fall. 
B)  Demand will increase; the equilibrium wage will fall. 
C)  Demand will stay the same; the equilibrium wage will rise. 
D)  Demand will decrease; the equilibrium wage will rise. 
E)  Demand will increase; the equilibrium wage will increase. 
A)  Demand will fall; the equilibrium wage will fall. 
B)  Demand will increase; the equilibrium wage will fall. 
C)  Demand will stay the same; the equilibrium wage will rise. 
D)  Demand will decrease; the equilibrium wage will rise. 
E)  Demand will increase; the equilibrium wage will increase.

Question 11

A firm is currently using two inputs: labor and capital. It rents equipment for $1,000, which produces a value of the marginal product of $5,000. It hires workers at $10 an hour who produce a value of the marginal product of $100. The wages of workers rise by 20% and the rental price of capital increases by 25%. The firm should hire _________ labor and _________ capital.

Accepted Answer

A)  more; more 
B)  more; less 
C)  the same amount; the same amount 
D)  less; more 
E)  less; less 
A)  more; more 
B)  more; less 
C)  the same amount; the same amount 
D)  less; more 
E)  less; less

Question 12

When people make more money, they sometimes take more vacation time. Based on this information, we can say that leisure is a(n):

Accepted Answer

A)  substitute good. 
B)  complement good. 
C)  inferior good. 
D)  Giffen good. 
E)  normal good. 
A)  substitute good. 
B)  complement good. 
C)  inferior good. 
D)  Giffen good. 
E)  normal good.

Question 13

Factors of production are:

Accepted Answer

A)  goods and services. 
B)  used to make goods and services. 
C)  purchased by the consumer for personal use. 
D)  sold by the consumer for income. 
E)  the property of firms. 
A)  goods and services. 
B)  used to make goods and services. 
C)  purchased by the consumer for personal use. 
D)  sold by the consumer for income. 
E)  the property of firms.

Question 14

Assume that consumer demand for hybrid vehicles is increasing and that for large SUVs is decreasing. The labor supply is the same for both markets.
a. How does this difference in consumer demand affect the labor demand for workers producing hybrid vehicles versus that of workers making SUVs?
b. Using a supply and demand graph and your answer to part a, show why workers producing hybrids earn more than workers who build SUVs.

Accepted Answer

a. Labor is a derived demand that depend

Question 15

The substitution effect describes the:

Accepted Answer

A)  incentive to work more when the wage rises. 
B)  incentive to work less when the wage rises. 
C)  decision whether to work more or less. 
D)  decision whether to join the labor force. 
E)  incentive to change jobs. 
A)  incentive to work more when the wage rises. 
B)  incentive to work less when the wage rises. 
C)  decision whether to work more or less. 
D)  decision whether to join the labor force. 
E)  incentive to change jobs.

Question 16

Refer to the accompanying table to answer the questions. $\begin{array} { l  }\text { Number of Workers }&\text { Output }\
1&20\2&30\3&38\4&42\5&44
\end{array}$

-If the price of output is $5, the value of the marginal product of labor of the third worker is:

Accepted Answer

A)  $8. 
B)  $30. 
C)  $40. 
D)  $38. 
E)  $190. 
A)  $8. 
B)  $30. 
C)  $40. 
D)  $38. 
E)  $190.

Question 17

If the wage is $8 and the price of a cupcake is $4, find King Kupcake's profits at the optimal amount of labor. $\begin{array} { l  }
\text { Quantity of Workers }&100&200&300&400\
\text { Ouantity of Output }&650&950&1,150&1,200
\end{array}$

Accepted Answer

A)  $2,200 
B)  $2,600 
C)  $4,600 
D)  $5,000 
E)  $7,500 
A)  $2,200 
B)  $2,600 
C)  $4,600 
D)  $5,000 
E)  $7,500

Question 18

Which of the following situations describes a monopsony?

Accepted Answer

A)  You are an ice cream artist and several shops are hiring. 
B)  You are the only teleport technician in the world. 
C)  You are an accountant in New York City. 
D)  You are a college instructor and there is only one university within 300 miles of your permanent residence. 
E)  You are the only professional dog groomer in town. 
A)  You are an ice cream artist and several shops are hiring. 
B)  You are the only teleport technician in the world. 
C)  You are an accountant in New York City. 
D)  You are a college instructor and there is only one university within 300 miles of your permanent residence. 
E)  You are the only professional dog groomer in town.

Question 19

Use the following information to answer the  questions.
Nicky L, owner of NLD Incorporated, knows that the marginal product of labor (MPL) for his workers can be defined as follows:
MPL = 32 - L
The total output a given level of workers can produce is found as:
Q = 32L - LS1U1P12S1S1P0
He also knows that the price of his output is $3. His profits can be found as:
Profit = P × Q - W × L
-What is the value of additional output produced by the twelfth worker?

Accepted Answer

A)  $20 
B)  $100 
C)  $10 
D)  $60 
E)  $80 
A)  $20 
B)  $100 
C)  $10 
D)  $60 
E)  $80

Question 20

Use the following information to answer the  questions.
Nicky L, owner of NLD Incorporated, knows that the marginal product of labor (MPL) for his workers can be defined as follows:
MPL = 32 - L
The total output a given level of workers can produce is found as:
Q = 32L - LS1U1P12S1S1P0
He also knows that the price of his output is $3. His profits can be found as:
Profit = P × Q - W × L
-What additional amount of output does the thirtieth worker contribute?

Accepted Answer

A)  150 units 
B)  60 units 
C)  2 units 
D)  14 units 
E)  9 units 
A)  150 units 
B)  60 units 
C)  2 units 
D)  14 units 
E)  9 units

Immigration is when:

Derived demand best describes the demand for which of the following options?

If demand for land increases, the rental price _ and the equilibrium amount of land _.

A situation with only one buyer of labor is called a(n):

Use the accompanying graph, which depicts Mighty Max's labor demand for his duffle-bag business, to answer the questions. -Assume that the price per duffle bag rises from $10 to $20. What is the value of the marginal product of labor of the twentieth worker?

The labor supply curve is given by the equation L_S = 3W + 20 and the labor demand curve is given by the equation L_D = 80 − 2W. The equilibrium wage in this labor market is:

Companies begin to find that customers, when calling customer service, want to talk to real people rather than to a recording. What will happen to demand for receptionists and the market equilibrium wage?

When people make more money, they sometimes take more vacation time. Based on this information, we can say that leisure is a(n):

Factors of production are:

The substitution effect describes the:

Refer to the accompanying table to answer the questions. Number of Workers Output 1 20 2 30 3 38 4 42 5 44 -If the price of output is $5, the value of the marginal product of labor of the third worker is:

If the wage is $8 and the price of a cupcake is $4, find King Kupcake's profits at the optimal amount of labor. Quantity of Workers 100 200 300 400 Ouantity of Output 650 950 1,150 1,200

Which of the following situations describes a monopsony?

The Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Price Controls

The Efficiency of Markets and the Costs of Taxation

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

Income, Inequality, and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Filters

Exam 14: The Demand and Supply of Resources

Immigration is when:

Derived demand best describes the demand for which of the following options?

If demand for land increases, the rental price _________ and the equilibrium amount of land _________.

A situation with only one buyer of labor is called a(n):

Use the accompanying graph, which depicts Mighty Max's labor demand for his duffle-bag business, to answer the questions. -Assume that the price per duffle bag rises from $10 to $20. What is the value of the marginal product of labor of the twentieth worker?

The labor supply curve is given by the equation LS = 3W + 20 and the labor demand curve is given by the equation LD = 80 − 2W. The equilibrium wage in this labor market is:

Companies begin to find that customers, when calling customer service, want to talk to real people rather than to a recording. What will happen to demand for receptionists and the market equilibrium wage?

When people make more money, they sometimes take more vacation time. Based on this information, we can say that leisure is a(n):

Factors of production are:

The substitution effect describes the:

Refer to the accompanying table to answer the questions. Number of Workers Output 1 20 2 30 3 38 4 42 5 44 -If the price of output is $5, the value of the marginal product of labor of the third worker is:

If the wage is $8 and the price of a cupcake is $4, find King Kupcake's profits at the optimal amount of labor. Quantity of Workers 100 200 300 400 Ouantity of Output 650 950 1,150 1,200

Which of the following situations describes a monopsony?

The Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Price Controls

The Efficiency of Markets and the Costs of Taxation

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

Income, Inequality, and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Filters

If demand for land increases, the rental price _ and the equilibrium amount of land _.

The labor supply curve is given by the equation L_S = 3W + 20 and the labor demand curve is given by the equation L_D = 80 − 2W. The equilibrium wage in this labor market is: