Question 1

In part,the demand for labor depends on the

Accepted Answer

A)  supply of labor. 
B)  number of workers available. 
C)  price of the firm's output. 
D)  workers' income. 
E)  wage rate at which the labor supply curve starts to bend backwards. 
A)  supply of labor. 
B)  number of workers available. 
C)  price of the firm's output. 
D)  workers' income. 
E)  wage rate at which the labor supply curve starts to bend backwards. C

Question 2

A worker has a marginal product of 15 units a day,each of which can be sold for $10.Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer.

Accepted Answer

It is profitable to hire this worker because the worker's value of marginal product is $150 a day (the price,$10,times the marginal product,15 units),which exceeds the wage rate of $100 a day.The worker creates $150 more revenue for the firm at a cost of only $100.Hence it is profitable to hire this worker.

Question 3

An individual's labor supply curve eventually bends backward because at a high enough wage rate,

Accepted Answer

A)  people are willing to work more hours. 
B)  employers are willing to hire more workers. 
C)  people desire more leisure time. 
D)  very few workers are hired. 
E)  more people enter the labor market to search for jobs. 
A)  people are willing to work more hours. 
B)  employers are willing to hire more workers. 
C)  people desire more leisure time. 
D)  very few workers are hired. 
E)  more people enter the labor market to search for jobs. C

Question 4

An increase in the price of the firm's output leads to a

Accepted Answer

A)  movement up along the demand for labor curve. 
B)  movement down along the demand for labor curve. 
C)  rightward shift of the demand for labor curve. 
D)  leftward shift of the demand for labor curve. 
E)  rightward shift of the supply of labor curve. 
A)  movement up along the demand for labor curve. 
B)  movement down along the demand for labor curve. 
C)  rightward shift of the demand for labor curve. 
D)  leftward shift of the demand for labor curve. 
E)  rightward shift of the supply of labor curve.

Question 5

For a firm selling its product in a perfectly competitive market,the demand curve for a factor of production is downward sloping because

Accepted Answer

A)  of the diminishing marginal product of the factor. 
B)  to sell more output, the firm must lower the price of its product. 
C)  firms must hire more factors of production if they want to increase their output. 
D)  a factor's marginal product increases when the price of the factor increases. 
E)  None of the above answers is correct. 
A)  of the diminishing marginal product of the factor. 
B)  to sell more output, the firm must lower the price of its product. 
C)  firms must hire more factors of production if they want to increase their output. 
D)  a factor's marginal product increases when the price of the factor increases. 
E)  None of the above answers is correct.

Question 6

Why might an individual decrease the quantity of labor he or she supplies when the wage rate increases? Briefly explain your answer.

Accepted Answer

A worker might decrease the quantity of

Question 7

Which of the following is a correct statement of the relationship between advances in technology and the demand for labor?

Accepted Answer

A)  The demand decreases for some types of labor and increases for other types of labor. 
B)  The demand for labor always decreases when technology advances. 
C)  The demand for labor always increases when technology advances. 
D)  Technology advances when the demand for labor advances. 
E)  None of the above answers is correct. 
A)  The demand decreases for some types of labor and increases for other types of labor. 
B)  The demand for labor always decreases when technology advances. 
C)  The demand for labor always increases when technology advances. 
D)  Technology advances when the demand for labor advances. 
E)  None of the above answers is correct.

Question 8

The proposition that the price of a resource is expected to rise at a rate equal to the interest rate is called the

Accepted Answer

A)  Discounted Value Proposition. 
B)  derived demand for productive resources. 
C)  diminishing marginal revenue product. 
D)  Interest Rate Theory. 
E)  Hotelling Principle. 
A)  Discounted Value Proposition. 
B)  derived demand for productive resources. 
C)  diminishing marginal revenue product. 
D)  Interest Rate Theory. 
E)  Hotelling Principle.

Question 9

The figure above shows a firm's VMP curve.
-Suppose that new technology raises the workers' marginal product.As a result,

Accepted Answer

A)  there is a movement upward along the curve, such as a movement from point C to point B. 
B)  there is a movement downward along the curve, such as a movement from point C to point D. 
C)  the curve shifts rightward. 
D)  the curve shifts leftward. 
E)  More information is needed to answer the question. 
A)  there is a movement upward along the curve, such as a movement from point C to point B. 
B)  there is a movement downward along the curve, such as a movement from point C to point D. 
C)  the curve shifts rightward. 
D)  the curve shifts leftward. 
E)  More information is needed to answer the question.

Question 10

What factors other than the wage rate influence the demand for labor? How is demand affected by changes in these factors?

Accepted Answer

The demand for labor is influenced by ch

Question 11

Which of the following shift the supply of labor curve leftward?
i.an advancement in technology
ii.a decrease in the price of the product that the labor produces
iii.a decrease in the adult population

Accepted Answer

A)  i and ii 
B)  ii and iii 
C)  ii only 
D)  iii only 
E)  i, ii, and iii 
A)  i and ii 
B)  ii and iii 
C)  ii only 
D)  iii only 
E)  i, ii, and iii

Question 12

When hiring labor,to maximize profit a firm hires labor

Accepted Answer

A)  until the value of marginal product equals the wage rate. 
B)  if the workers are not unionized. 
C)  until the value of marginal product is less than the wage rate. 
D)  until the value of marginal product is greater than the wage rate. 
E)  until the value of marginal product equals the marginal revenue from hiring the worker. 
A)  until the value of marginal product equals the wage rate. 
B)  if the workers are not unionized. 
C)  until the value of marginal product is less than the wage rate. 
D)  until the value of marginal product is greater than the wage rate. 
E)  until the value of marginal product equals the marginal revenue from hiring the worker.

Question 13

The supply of labor curve shifts leftward if

Accepted Answer

A)  the population increases. 
B)  the demand for labor curve shifts leftward. 
C)  the supply of labor increases. 
D)  the wage rate falls. 
E)  the supply of labor decreases. 
A)  the population increases. 
B)  the demand for labor curve shifts leftward. 
C)  the supply of labor increases. 
D)  the wage rate falls. 
E)  the supply of labor decreases.

Question 14

Which of the following is a method used by unions to increase the demand for their members' labor?

Accepted Answer

A)  Support import restrictions. 
B)  Decrease the marginal product of union members. 
C)  Increase imported goods and services 
D)  Oppose immigration restrictions. 
E)  Oppose minimum wage laws. 
A)  Support import restrictions. 
B)  Decrease the marginal product of union members. 
C)  Increase imported goods and services 
D)  Oppose immigration restrictions. 
E)  Oppose minimum wage laws.

Question 15

If the price of movie tickets increases,there is

Accepted Answer

A)  an increase in the demand for actors and actresses. 
B)  a decrease in the demand for actors and actresses. 
C)  no change in the demand for actors and actresses. 
D)  a decrease in the supply of actors and actresses. 
E)  an increase in the supply of actors and actresses. 
A)  an increase in the demand for actors and actresses. 
B)  a decrease in the demand for actors and actresses. 
C)  no change in the demand for actors and actresses. 
D)  a decrease in the supply of actors and actresses. 
E)  an increase in the supply of actors and actresses.

Question 16

Which of the following statements about a firm's demand for labor curve and its value of marginal product of labor curve is true?

Accepted Answer

A)  The value of marginal product curve slopes upward and the demand for labor curve slopes downward. 
B)  The demand for labor curve shows the amount of labor firms will hire based on the wage rate while the value of marginal product curve shows the amount of output supplied based on the wage rate. 
C)  The value of marginal product curve is steeper than the demand for labor curve. 
D)  The demand for labor curve is the same as the value of marginal product curve. 
E)  The value of marginal product curve lies above the demand for labor curve. 
A)  The value of marginal product curve slopes upward and the demand for labor curve slopes downward. 
B)  The demand for labor curve shows the amount of labor firms will hire based on the wage rate while the value of marginal product curve shows the amount of output supplied based on the wage rate. 
C)  The value of marginal product curve is steeper than the demand for labor curve. 
D)  The demand for labor curve is the same as the value of marginal product curve. 
E)  The value of marginal product curve lies above the demand for labor curve.

Question 17

Which of the following methods is used by unions to increase the demand for the labor of its members?

Accepted Answer

A)  Decrease the marginal product of union members 
B)  Support minimum wage laws 
C)  Support free trade 
D)  Support laws that increase immigration into the country 
E)  Decrease demand for the good produced 
A)  Decrease the marginal product of union members 
B)  Support minimum wage laws 
C)  Support free trade 
D)  Support laws that increase immigration into the country 
E)  Decrease demand for the good produced

Question 18

If the demand for a good increases,the demand for the factors used to produce the good

Accepted Answer

A)  increases. 
B)  decreases. 
C)  stays the same. 
D)  could increase, decrease, or stay the same depending on whether the demand for the good is elastic, inelastic, or unit elastic. 
E)  None of the above answers is correct. 
A)  increases. 
B)  decreases. 
C)  stays the same. 
D)  could increase, decrease, or stay the same depending on whether the demand for the good is elastic, inelastic, or unit elastic. 
E)  None of the above answers is correct.

Question 19

-The above figure shows the initial demand for labor curve at a Pizza Hut in Canada.The wage rate is $6 an hour.If the demand for pizzas increases so that the price of a pizza rises,

Accepted Answer

A)  at the wage rate of $6 per hour, Pizza Hut hires fewer than 10 workers. 
B)  Pizza Hut's demand for labor curve shifts rightward. 
C)  the supply of labor curve shifts rightward. 
D)  Pizza Hut's demand for labor curve shifts leftward. 
E)  the supply of labor curve shifts leftward. 
A)  at the wage rate of $6 per hour, Pizza Hut hires fewer than 10 workers. 
B)  Pizza Hut's demand for labor curve shifts rightward. 
C)  the supply of labor curve shifts rightward. 
D)  Pizza Hut's demand for labor curve shifts leftward. 
E)  the supply of labor curve shifts leftward.

Question 20

Unions support immigration restrictions because the restrictions create

Accepted Answer

A)  an increase in the supply of union labor. 
B)  a decrease in the supply of union labor. 
C)  unemployment. 
D)  an increase in the demand for union labor. 
E)  a decrease in the demand for union labor. 
A)  an increase in the supply of union labor. 
B)  a decrease in the supply of union labor. 
C)  unemployment. 
D)  an increase in the demand for union labor. 
E)  a decrease in the demand for union labor.

In part,the demand for labor depends on the

A worker has a marginal product of 15 units a day,each of which can be sold for $10.Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer.

An individual's labor supply curve eventually bends backward because at a high enough wage rate,

An increase in the price of the firm's output leads to a

For a firm selling its product in a perfectly competitive market,the demand curve for a factor of production is downward sloping because

Why might an individual decrease the quantity of labor he or she supplies when the wage rate increases? Briefly explain your answer.

Which of the following is a correct statement of the relationship between advances in technology and the demand for labor?

The proposition that the price of a resource is expected to rise at a rate equal to the interest rate is called the

The figure above shows a firm's VMP curve. -Suppose that new technology raises the workers' marginal product.As a result,

What factors other than the wage rate influence the demand for labor? How is demand affected by changes in these factors?

Which of the following shift the supply of labor curve leftward? i.an advancement in technology ii.a decrease in the price of the product that the labor produces iii.a decrease in the adult population

When hiring labor,to maximize profit a firm hires labor

The supply of labor curve shifts leftward if

Which of the following is a method used by unions to increase the demand for their members' labor?

If the price of movie tickets increases,there is

Which of the following statements about a firm's demand for labor curve and its value of marginal product of labor curve is true?

Which of the following methods is used by unions to increase the demand for the labor of its members?

If the demand for a good increases,the demand for the factors used to produce the good

-The above figure shows the initial demand for labor curve at a Pizza Hut in Canada.The wage rate is $6 an hour.If the demand for pizzas increases so that the price of a pizza rises,

Unions support immigration restrictions because the restrictions create

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Economic Inequality

Filters

Exam 19: Markets for Factors of Production

In part,the demand for labor depends on the

A worker has a marginal product of 15 units a day,each of which can be sold for $10.Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer.

An individual's labor supply curve eventually bends backward because at a high enough wage rate,

An increase in the price of the firm's output leads to a

For a firm selling its product in a perfectly competitive market,the demand curve for a factor of production is downward sloping because

Why might an individual decrease the quantity of labor he or she supplies when the wage rate increases? Briefly explain your answer.

Which of the following is a correct statement of the relationship between advances in technology and the demand for labor?

The proposition that the price of a resource is expected to rise at a rate equal to the interest rate is called the

The figure above shows a firm's VMP curve. -Suppose that new technology raises the workers' marginal product.As a result,

What factors other than the wage rate influence the demand for labor? How is demand affected by changes in these factors?

Which of the following shift the supply of labor curve leftward? i.an advancement in technology ii.a decrease in the price of the product that the labor produces iii.a decrease in the adult population

When hiring labor,to maximize profit a firm hires labor

The supply of labor curve shifts leftward if

Which of the following is a method used by unions to increase the demand for their members' labor?

If the price of movie tickets increases,there is

Which of the following statements about a firm's demand for labor curve and its value of marginal product of labor curve is true?

Which of the following methods is used by unions to increase the demand for the labor of its members?

If the demand for a good increases,the demand for the factors used to produce the good

-The above figure shows the initial demand for labor curve at a Pizza Hut in Canada.The wage rate is $6 an hour.If the demand for pizzas increases so that the price of a pizza rises,

Unions support immigration restrictions because the restrictions create

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Economic Inequality

Filters