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Deck 12: The Factors of Production
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Question
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
What is the term for the wage rate expressed as a dollar and cents figure?
A)The nominal wage.
B)The minimum wage.
C)The real wage.
D)The normal wage.
What is the term for the wage rate expressed as a dollar and cents figure?
A)The nominal wage.
B)The minimum wage.
C)The real wage.
D)The normal wage.
Question
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.At its optimal output,what quantity of labour will Nearly Done Inc.employ if the market wage rate is $8?
A)1.
B)6.
C)7.
D)8.
E)9.
Refer to the above information to answer this question.At its optimal output,what quantity of labour will Nearly Done Inc.employ if the market wage rate is $8?
A)1.
B)6.
C)7.
D)8.
E)9.
Question
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.What quantity of labour will Nearly Done Inc.employ and what will its total revenue be if the market wage rate is $4?
A)5 and $72.
B)8 and $96.
C)8 and $98.
D)9 and $98.
E)Some indeterminate quantity above 9.
Refer to the above information to answer this question.What quantity of labour will Nearly Done Inc.employ and what will its total revenue be if the market wage rate is $4?
A)5 and $72.
B)8 and $96.
C)8 and $98.
D)9 and $98.
E)Some indeterminate quantity above 9.
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Question
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
Refer to the above information to answer this question.What quantities of labour will Nearly Done Inc.definitely not employ regardless of the market wage rate?
A)8,9 or 10.
B)9 or 10.
C)1 or 2.
D)1,2 or 3.
E)Cannot be determined.
Refer to the above information to answer this question.What quantities of labour will Nearly Done Inc.definitely not employ regardless of the market wage rate?
A)8,9 or 10.
B)9 or 10.
C)1 or 2.
D)1,2 or 3.
E)Cannot be determined.
Question
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
What is meant by the labour force supply?
A)It is the total number of people over 15 who are willing and able to work.
B)It is the total number of people between 15 and 65 who are willing and able to work.
C)It is the total number of hours that those in the labour force are willing to work.
D)It is the total number of people over 15 who have paid employment.
What is meant by the labour force supply?
A)It is the total number of people over 15 who are willing and able to work.
B)It is the total number of people between 15 and 65 who are willing and able to work.
C)It is the total number of hours that those in the labour force are willing to work.
D)It is the total number of people over 15 who have paid employment.
Question
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
What is the term for the total number of people over fifteen who are willing and able to be employed?
A)The labour market.
B)The labour force.
C)The labour force supply.
D)The labour force population.
What is the term for the total number of people over fifteen who are willing and able to be employed?
A)The labour market.
B)The labour force.
C)The labour force supply.
D)The labour force population.
Question
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.At its optimal output,what is Nearly Done's total profit or loss if the market wage rate is $8,total fixed costs are $24 and labour costs are the only variable costs?
A)-$72.
B)-$8.
C)+$10.
D)+$12.
E)Cannot be determined.
Refer to the above information to answer this question.At its optimal output,what is Nearly Done's total profit or loss if the market wage rate is $8,total fixed costs are $24 and labour costs are the only variable costs?
A)-$72.
B)-$8.
C)+$10.
D)+$12.
E)Cannot be determined.
Question
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.In what type of market does Nearly Done Inc.sell its output?
A)Perfect competition.
B)Monopoly.
C)Oligopoly.
D)Monopolistic competition.
E)Natural monopoly.
Refer to the above information to answer this question.In what type of market does Nearly Done Inc.sell its output?
A)Perfect competition.
B)Monopoly.
C)Oligopoly.
D)Monopolistic competition.
E)Natural monopoly.
Question
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.Suppose that the market wage rate is $8,how much more labour will Nearly Done Inc.employ if the marginal product of labour doubles?
A)0.
B)1.
C)2.
D)3.
E)7.
Refer to the above information to answer this question.Suppose that the market wage rate is $8,how much more labour will Nearly Done Inc.employ if the marginal product of labour doubles?
A)0.
B)1.
C)2.
D)3.
E)7.
Question
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.At its optimal output,what is Nearly Done's total revenue if the market wage rate is $8.
A)$8.
B)$14.
C)$92.
D)$96.
E)Cannot be determined.
Refer to the above information to answer this question.At its optimal output,what is Nearly Done's total revenue if the market wage rate is $8.
A)$8.
B)$14.
C)$92.
D)$96.
E)Cannot be determined.
Question
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
Refer to the above information to answer this question.What quantity of labour is Nearly Done Inc.employing when the marginal product of labour is maximized?
A)2.
B)4.
C)6.
D)8.
E)Cannot be determined.
Refer to the above information to answer this question.What quantity of labour is Nearly Done Inc.employing when the marginal product of labour is maximized?
A)2.
B)4.
C)6.
D)8.
E)Cannot be determined.
Question
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
What is meant by the labour force?
A)It is the total number of people over 15 who are willing and able to work.
B)It is the total number of people between 15 and 65 who are willing and able to work.
C)It is the total number of hours that employed people work.
D)It is the total number of people over 15 who have paid employment.
What is meant by the labour force?
A)It is the total number of people over 15 who are willing and able to work.
B)It is the total number of people between 15 and 65 who are willing and able to work.
C)It is the total number of hours that employed people work.
D)It is the total number of people over 15 who have paid employment.
Question
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
Which of the following statements is correct regarding the market supply of labour curve?
A)It is perfectly elastic.
B)It is upward sloping and relatively elastic.
C)It is upward sloping and relatively inelastic.
D)It is perfectly inelastic.
Which of the following statements is correct regarding the market supply of labour curve?
A)It is perfectly elastic.
B)It is upward sloping and relatively elastic.
C)It is upward sloping and relatively inelastic.
D)It is perfectly inelastic.
Question
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
Refer to the above information to answer this question.How much labour will Nearly Done Inc.employ if the market wage rate is $12?
A)2.
B)4.
C)6.
D)8.
E)Cannot be determined.
Refer to the above information to answer this question.How much labour will Nearly Done Inc.employ if the market wage rate is $12?
A)2.
B)4.
C)6.
D)8.
E)Cannot be determined.
Question
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.What is Nearly Done's total wage bill if the market wage rate is $8?
A)$16.
B)$36.
C)$48.
D)$56.
E)$66.
Refer to the above information to answer this question.What is Nearly Done's total wage bill if the market wage rate is $8?
A)$16.
B)$36.
C)$48.
D)$56.
E)$66.
Question
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
Which of the following statements is true if a firm is hiring labour under conditions of a perfectly competitive factor market?
A)The firm's labour demand curve will be perfectly elastic.
B)The firm's labour supply curve will be upward-sloping.
C)The firm's labour supply curve will be perfectly elastic.
D)The firm's labour demand curve will be upward-sloping.
Which of the following statements is true if a firm is hiring labour under conditions of a perfectly competitive factor market?
A)The firm's labour demand curve will be perfectly elastic.
B)The firm's labour supply curve will be upward-sloping.
C)The firm's labour supply curve will be perfectly elastic.
D)The firm's labour demand curve will be upward-sloping.
Question
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
Suppose that the supply of labour is upward sloping and the marginal product of labour increases.Which of the following statements is correct?
A)The wage rate will increase.
B)The wage rate will decrease.
C)The supply of labour curve will shift to the left.
D)The supply of labour curve will shift to the right.
Suppose that the supply of labour is upward sloping and the marginal product of labour increases.Which of the following statements is correct?
A)The wage rate will increase.
B)The wage rate will decrease.
C)The supply of labour curve will shift to the left.
D)The supply of labour curve will shift to the right.
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Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What has happened to the demand for and the supply of labour in Canada over the last forty years?
A)The demand has increased and the supply has decreased.
B)The supply has increased and the demand has decreased.
C)Both the demand and the supply have increased.
D)Both the demand and the supply have decreased.
E)The demand has increased but the supply has remained unchanged.
What has happened to the demand for and the supply of labour in Canada over the last forty years?
A)The demand has increased and the supply has decreased.
B)The supply has increased and the demand has decreased.
C)Both the demand and the supply have increased.
D)Both the demand and the supply have decreased.
E)The demand has increased but the supply has remained unchanged.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What has happened to the size of Canada's labour force over the last thirty years?
A)It has decreased slightly.
B)It has grown by about 10%.
C)It has grown by about 50%.
D)It has almost doubled.
What has happened to the size of Canada's labour force over the last thirty years?
A)It has decreased slightly.
B)It has grown by about 10%.
C)It has grown by about 50%.
D)It has almost doubled.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
Refer to the information above to answer this question.What is the firm's total revenue if the firm maximizes its profits?
A)$20.
B)$120.
C)$192.
D)$250.
E)$325.
Refer to the information above to answer this question.What is the firm's total revenue if the firm maximizes its profits?
A)$20.
B)$120.
C)$192.
D)$250.
E)$325.
Question
Which of the following statements is correct regarding an individual firm which obtains its labour in a perfectly competitive labour market?
A)It faces a downward-sloping labour demand curve and a upward-sloping labour supply curve.
B)It faces an upward-sloping labour demand curve and a downward-sloping labour supply curve.
C)It faces a downward-sloping labour demand curve and a horizontal labour supply curve.
D)It faces a horizontal labour demand curve and a upward-sloping labour supply curve.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What determines the productivity of labour?
A)The quantity of capital that labour has to work with.
B)The quality of the labour itself.
C)The state of technology.
D)The quantity of labour employed.
What determines the productivity of labour?
A)The quantity of capital that labour has to work with.
B)The quality of the labour itself.
C)The state of technology.
D)The quantity of labour employed.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What was the size of Canada's labour force in 2013?
A)7.5 million.
B)10.6 million.
C)12.2 million.
D)19.1 million.
E)21.5 million.
What was the size of Canada's labour force in 2013?
A)7.5 million.
B)10.6 million.
C)12.2 million.
D)19.1 million.
E)21.5 million.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
Refer to the information above to answer this question.What is the firm's total wage bill if the firm maximizes its profits?
A)$30.
B)$64.
C)$120.
D)$154.
E)$192.
Refer to the information above to answer this question.What is the firm's total wage bill if the firm maximizes its profits?
A)$30.
B)$64.
C)$120.
D)$154.
E)$192.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
Refer to the information above to answer this question.What is the equilibrium wage rate if the firm maximizes its profits?
A)$5.
B)$12.
C)$18.
D)$20.
E)Cannot be determined.
Refer to the information above to answer this question.What is the equilibrium wage rate if the firm maximizes its profits?
A)$5.
B)$12.
C)$18.
D)$20.
E)Cannot be determined.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
Which of the following in the correct statement regarding the change that has taken place in Canada's percentage of the (labour force)population which is in the labour force since 1950?
A)The male participation rate has decreased while the female participation rate has increased.
B)The female participation rate has decreased while the male participation rate has increased.
C)Both the male and female rates have decreased.
D)Both the male and female rates have increased.
Which of the following in the correct statement regarding the change that has taken place in Canada's percentage of the (labour force)population which is in the labour force since 1950?
A)The male participation rate has decreased while the female participation rate has increased.
B)The female participation rate has decreased while the male participation rate has increased.
C)Both the male and female rates have decreased.
D)Both the male and female rates have increased.
Question
Refer to the information above to answer this question.Which of the following statements is correct regarding the firm's labour supply curve?
A)It is perfectly inelastic.
B)It is perfectly elastic.
C)It is upward-sloping.
D)It is downward-sloping.
Question
Refer to the information above to answer this question.What is the firm's total profit if its fixed cost are $180,labour is its only variable costs and it maximizes its profits?
A)$14.
B)$24.
C)$80.
D)$204.
E)Cannot be determined.
Question
Refer to the information above to answer this question.Which of the following statements is correct?
A)This firm is hiring labour in a perfectly competitive market and selling its product in an imperfectly competitive market.
B)This firm is both hiring its labour and selling its product in perfectly competitive markets.
C)This firm is hiring its labour in a perfectly competitive market but no comment is possible about the market conditions under which it is selling its product.
D)This firm is selling its product in a perfectly competitive market but no comment can be made about the market conditions under which it is hiring its labour.
Question
Refer to the information above to answer this question.What quantity of labour will the firm employ if it maximizes its profits?
A)2.
B)4.
C)6.
D)7.
E)8.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What happens if the demand for labour increases more than does the supply of labour?
A)Wage rates will increase.
B)Wage rates will decrease.
C)The effect on wage rates is indeterminate.
D)The quantity of hours worked will decline.
What happens if the demand for labour increases more than does the supply of labour?
A)Wage rates will increase.
B)Wage rates will decrease.
C)The effect on wage rates is indeterminate.
D)The quantity of hours worked will decline.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What is the term for a market structure in which there is only one buyer?
A)Monopoly.
B)Absolute advantage.
C)Monopsony.
D)Natural monopoly.
What is the term for a market structure in which there is only one buyer?
A)Monopoly.
B)Absolute advantage.
C)Monopsony.
D)Natural monopoly.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What happens if the supply of labour increases more than does the demand for labour?
A)Wage rates will increase.
B)Wages rates will decrease.
C)The effect on wage rates is indeterminate.
D)The quantity of hours worked will decline.
What happens if the supply of labour increases more than does the demand for labour?
A)Wage rates will increase.
B)Wages rates will decrease.
C)The effect on wage rates is indeterminate.
D)The quantity of hours worked will decline.
Question
Refer to the information above to answer this question.What is the firm's total revenue if it maximizes its profits?
A)$10.
B)$22.
C)$52.
D)$260.
E)$265.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What is the ultimate determinant of the real wage in Canada?
A)The level of taxation by all levels of government.
B)The value of the Canadian dollar.
C)The real output of goods and service in Canada divided by the labour force.
D)The number of Canadians actively participating in the labour force.
What is the ultimate determinant of the real wage in Canada?
A)The level of taxation by all levels of government.
B)The value of the Canadian dollar.
C)The real output of goods and service in Canada divided by the labour force.
D)The number of Canadians actively participating in the labour force.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What will be the effect if an economy experiences growth in its labour productivity over a period of years?
A)The marginal revenue product of labour will decrease and,graphically,the demand for labour curve will shift to the right.
B)The marginal revenue product of labour will increase and,graphically,the demand for labour curve will shift to the right.
C)The marginal revenue product of labour will increase and,graphically,the supply of labour curve will shift to the left.
D)The marginal revenue product of labour will increase and,graphically,the supply of labour curve will shift to the right.
What will be the effect if an economy experiences growth in its labour productivity over a period of years?
A)The marginal revenue product of labour will decrease and,graphically,the demand for labour curve will shift to the right.
B)The marginal revenue product of labour will increase and,graphically,the demand for labour curve will shift to the right.
C)The marginal revenue product of labour will increase and,graphically,the supply of labour curve will shift to the left.
D)The marginal revenue product of labour will increase and,graphically,the supply of labour curve will shift to the right.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What is real wage?
A)The nominal wage multiplied by the price level.
B)The purchasing power,given a set of prices,of the nominal wage.
C)The income received for the use of capital.
D)The wage rate expressed as a dollar and cents figure.
What is real wage?
A)The nominal wage multiplied by the price level.
B)The purchasing power,given a set of prices,of the nominal wage.
C)The income received for the use of capital.
D)The wage rate expressed as a dollar and cents figure.
Question
What does the term economic rent mean?
A)The return to a factor of production that has a perfectly elastic supply.
B)The return to a factor of production that has a perfectly inelastic supply.
C)The return to labour.
D)The return to landlords.
Question
Refer to the graph above to answer this question.Suppose that the original supply and demand curves for labour are S1 and D1 and that the market is in equilibrium at point e.What can you conclude has happened if a new equilibrium at c occurs?
A)The supply of labour,the demand for labour,the wage rate and the equilibrium quantity have all increased.
B)The demand for labour and the wage rate have both increased while the supply of labour and the equilibrium quantity have both decreased.
C)The demand for labour and the wage rate have both increased while the supply of labour has decreased and the equilibrium quantity has not changed.
D)The wage rate has increased,while both the supply of and demand for labour have decreased and the equilibrium wage has remained unchanged.
E)The wage rate and the equilibrium quantity have increased while both the demand for and the supply of labour has increased.
Question
Question
Refer to the graph above to answer this question.Suppose that the original supply and demand curves for labour are S1 and D1 and that the market is in equilibrium at point e.What can you conclude has happened if a new equilibrium at b occurs?
A)The supply of labour,the wage rate and the equilibrium quantity have all increased.
B)Both the demand for labour and the wage rate have increased while the equilibrium quantity has decreased.
C)The wage rate and the equilibrium quantity have increased while the supply of labour has decreased.
D)The wage rate has increased while both the supply of labour and the equilibrium quantity have decreased.
E)The wage rate and the equilibrium quantity have increased while both the demand for and the supply of labour has increased.
Question
Economic research has established that individuals with more formal education enjoy,on average,higher earnings throughout their lives.Approximately how much higher is the annual income of those with a post-secondary education compared with those who have elementary school education only?
A)50% higher.
B)Twice as high.
C)Four times as high.
D)Eight times as high.
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Question
All of the following,expect one,are examples of how a trade union or professional association successfully restricts the supply of labour available.Which is the exception?
A)Only licensed M.D.s (doctors)can practice medicine.
B)Only licensed pipe-fitters can open a gas line.
C)Only members of the Bar can argue a case in court.
D)Only individuals with a PhD can be employed at a university.
E)The government imposes a minimum wage law.
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All of the following,except one,are explanations of the wage differentials that exist in our economy.Which is the exception?
A)Some jobs have unpleasant characteristics that do not exist with other jobs.
B)Some jobs involve physical risks that do not exist with other jobs.
C)Discrimination exists in the job market.
D)Some jobs have non-pecuniary benefits that are absent in other jobs.
E)The level of human capital is the same among individuals.
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All of the following except one are valid explanations of how unions can raise the wages of their members.Which is the exception?
A)By encouraging firms to employ more workers.
B)By increasing the demand for their members through advertising the employer's product.
C)By increasing the demand for their members through advertising their members' skills.
D)By encouraging the government to establish legal qualifications,thereby restricting the supply of labour.
E)By negotiating a fixed wage rate above equilibrium.
Question
What is meant by the term human capital?
A)The total number of people employed by a firm.
B)Those who must continually learn and use theoretical and analytical knowledge in their work.
C)The ideas and effort that are put into the production process by individuals.
D)The accumulation of all skills and knowledge acquired by individuals.
E)The quantity of labour employed through employment agencies.
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Refer to the graph above to answer this question.Suppose that the original supply and demand curves for labour are S1 and D1 and that the market is in equilibrium at point e.What can you conclude has happened if a new wage rate of W2 and quantity of Qb occur?
A)Both the supply of and the demand for labour have decreased.
B)The supply of labour has decreased and the demand has increased.
C)The demand for labour has decreased and the supply has increased.
D)W2 is a non-equilibrium wage rate that may be the result of successful bargaining by a strong trade union.
Question
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
If trend lines representing Canada's real GDP per hour and the real hourly wage in Canada were plotted over a period of the last 50 years,what type of correlation would it show?
A)A very close correlation for the whole period.
B)A very close correlation for the first twenty five years followed by the real hourly wage rate raising significantly above real GDP per hour.
C)A very close correlation for the first twenty five years followed by the real GDP per hour raising significantly above real hourly wage rate.
D)A gradual convergence of the two trends starting from the position of the real hourly wage rate being significantly above real GDP per hour.
If trend lines representing Canada's real GDP per hour and the real hourly wage in Canada were plotted over a period of the last 50 years,what type of correlation would it show?
A)A very close correlation for the whole period.
B)A very close correlation for the first twenty five years followed by the real hourly wage rate raising significantly above real GDP per hour.
C)A very close correlation for the first twenty five years followed by the real GDP per hour raising significantly above real hourly wage rate.
D)A gradual convergence of the two trends starting from the position of the real hourly wage rate being significantly above real GDP per hour.
Question
Refer to the graph above to answer this question.Suppose that the original supply and demand curves for labour are S1 and D1 and that the market is in equilibrium at point e.What can you conclude has happened if a new equilibrium at a occurs?
A)The supply of labour,the wage rate and the equilibrium quantity have all increased.
B)The demand for labour,the wage rate and the equilibrium quantity have all increased.
C)The wage rate and the equilibrium quantity have increased while the supply of labour has decreased.
D)The wage rate and the equilibrium quantity have increased while the demand for labour has decreased.
E)The wage rate and the equilibrium quantity have increased while both the demand for and the supply of labour has increased.
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Deck 12: The Factors of Production
1
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
What is the term for the wage rate expressed as a dollar and cents figure?
A)The nominal wage.
B)The minimum wage.
C)The real wage.
D)The normal wage.
What is the term for the wage rate expressed as a dollar and cents figure?
A)The nominal wage.
B)The minimum wage.
C)The real wage.
D)The normal wage.
The nominal wage.
2
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.At its optimal output,what quantity of labour will Nearly Done Inc.employ if the market wage rate is $8?
A)1.
B)6.
C)7.
D)8.
E)9.
Refer to the above information to answer this question.At its optimal output,what quantity of labour will Nearly Done Inc.employ if the market wage rate is $8?
A)1.
B)6.
C)7.
D)8.
E)9.
7.
3
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.What quantity of labour will Nearly Done Inc.employ and what will its total revenue be if the market wage rate is $4?
A)5 and $72.
B)8 and $96.
C)8 and $98.
D)9 and $98.
E)Some indeterminate quantity above 9.
Refer to the above information to answer this question.What quantity of labour will Nearly Done Inc.employ and what will its total revenue be if the market wage rate is $4?
A)5 and $72.
B)8 and $96.
C)8 and $98.
D)9 and $98.
E)Some indeterminate quantity above 9.
8 and $96.
4
All of the following except one are true statements about the MRP.Which is the exception?
A)It is equal to TR/ inputs.
B)It is equal to TP/price.
C)It is the increase in total revenue that results from the use of one more unit of input.
D)It is equal to MPL price.
A)It is equal to TR/ inputs.
B)It is equal to TP/price.
C)It is the increase in total revenue that results from the use of one more unit of input.
D)It is equal to MPL price.
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5
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
Refer to the above information to answer this question.What quantities of labour will Nearly Done Inc.definitely not employ regardless of the market wage rate?
A)8,9 or 10.
B)9 or 10.
C)1 or 2.
D)1,2 or 3.
E)Cannot be determined.
Refer to the above information to answer this question.What quantities of labour will Nearly Done Inc.definitely not employ regardless of the market wage rate?
A)8,9 or 10.
B)9 or 10.
C)1 or 2.
D)1,2 or 3.
E)Cannot be determined.
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6
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
What is meant by the labour force supply?
A)It is the total number of people over 15 who are willing and able to work.
B)It is the total number of people between 15 and 65 who are willing and able to work.
C)It is the total number of hours that those in the labour force are willing to work.
D)It is the total number of people over 15 who have paid employment.
What is meant by the labour force supply?
A)It is the total number of people over 15 who are willing and able to work.
B)It is the total number of people between 15 and 65 who are willing and able to work.
C)It is the total number of hours that those in the labour force are willing to work.
D)It is the total number of people over 15 who have paid employment.
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7
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
What is the term for the total number of people over fifteen who are willing and able to be employed?
A)The labour market.
B)The labour force.
C)The labour force supply.
D)The labour force population.
What is the term for the total number of people over fifteen who are willing and able to be employed?
A)The labour market.
B)The labour force.
C)The labour force supply.
D)The labour force population.
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8
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.At its optimal output,what is Nearly Done's total profit or loss if the market wage rate is $8,total fixed costs are $24 and labour costs are the only variable costs?
A)-$72.
B)-$8.
C)+$10.
D)+$12.
E)Cannot be determined.
Refer to the above information to answer this question.At its optimal output,what is Nearly Done's total profit or loss if the market wage rate is $8,total fixed costs are $24 and labour costs are the only variable costs?
A)-$72.
B)-$8.
C)+$10.
D)+$12.
E)Cannot be determined.
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9
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.In what type of market does Nearly Done Inc.sell its output?
A)Perfect competition.
B)Monopoly.
C)Oligopoly.
D)Monopolistic competition.
E)Natural monopoly.
Refer to the above information to answer this question.In what type of market does Nearly Done Inc.sell its output?
A)Perfect competition.
B)Monopoly.
C)Oligopoly.
D)Monopolistic competition.
E)Natural monopoly.
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10
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.Suppose that the market wage rate is $8,how much more labour will Nearly Done Inc.employ if the marginal product of labour doubles?
A)0.
B)1.
C)2.
D)3.
E)7.
Refer to the above information to answer this question.Suppose that the market wage rate is $8,how much more labour will Nearly Done Inc.employ if the marginal product of labour doubles?
A)0.
B)1.
C)2.
D)3.
E)7.
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11
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.At its optimal output,what is Nearly Done's total revenue if the market wage rate is $8.
A)$8.
B)$14.
C)$92.
D)$96.
E)Cannot be determined.
Refer to the above information to answer this question.At its optimal output,what is Nearly Done's total revenue if the market wage rate is $8.
A)$8.
B)$14.
C)$92.
D)$96.
E)Cannot be determined.
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12
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
Refer to the above information to answer this question.What quantity of labour is Nearly Done Inc.employing when the marginal product of labour is maximized?
A)2.
B)4.
C)6.
D)8.
E)Cannot be determined.
Refer to the above information to answer this question.What quantity of labour is Nearly Done Inc.employing when the marginal product of labour is maximized?
A)2.
B)4.
C)6.
D)8.
E)Cannot be determined.
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13
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
What is meant by the labour force?
A)It is the total number of people over 15 who are willing and able to work.
B)It is the total number of people between 15 and 65 who are willing and able to work.
C)It is the total number of hours that employed people work.
D)It is the total number of people over 15 who have paid employment.
What is meant by the labour force?
A)It is the total number of people over 15 who are willing and able to work.
B)It is the total number of people between 15 and 65 who are willing and able to work.
C)It is the total number of hours that employed people work.
D)It is the total number of people over 15 who have paid employment.
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14
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
Which of the following statements is correct regarding the market supply of labour curve?
A)It is perfectly elastic.
B)It is upward sloping and relatively elastic.
C)It is upward sloping and relatively inelastic.
D)It is perfectly inelastic.
Which of the following statements is correct regarding the market supply of labour curve?
A)It is perfectly elastic.
B)It is upward sloping and relatively elastic.
C)It is upward sloping and relatively inelastic.
D)It is perfectly inelastic.
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15
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
Refer to the above information to answer this question.How much labour will Nearly Done Inc.employ if the market wage rate is $12?
A)2.
B)4.
C)6.
D)8.
E)Cannot be determined.
Refer to the above information to answer this question.How much labour will Nearly Done Inc.employ if the market wage rate is $12?
A)2.
B)4.
C)6.
D)8.
E)Cannot be determined.
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16
Below is productivity data for firm Nearly Done Inc.which purchases resources in a perfectly competitive factor market.
Refer to the above information to answer this question.What is Nearly Done's total wage bill if the market wage rate is $8?
A)$16.
B)$36.
C)$48.
D)$56.
E)$66.
Refer to the above information to answer this question.What is Nearly Done's total wage bill if the market wage rate is $8?
A)$16.
B)$36.
C)$48.
D)$56.
E)$66.
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17
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
Which of the following statements is true if a firm is hiring labour under conditions of a perfectly competitive factor market?
A)The firm's labour demand curve will be perfectly elastic.
B)The firm's labour supply curve will be upward-sloping.
C)The firm's labour supply curve will be perfectly elastic.
D)The firm's labour demand curve will be upward-sloping.
Which of the following statements is true if a firm is hiring labour under conditions of a perfectly competitive factor market?
A)The firm's labour demand curve will be perfectly elastic.
B)The firm's labour supply curve will be upward-sloping.
C)The firm's labour supply curve will be perfectly elastic.
D)The firm's labour demand curve will be upward-sloping.
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18
Below is a graphical illustration of Nearly Done Inc.'s marginal revenue product.The firm employs its labour in a perfectly competitive labour market.
Suppose that the supply of labour is upward sloping and the marginal product of labour increases.Which of the following statements is correct?
A)The wage rate will increase.
B)The wage rate will decrease.
C)The supply of labour curve will shift to the left.
D)The supply of labour curve will shift to the right.
Suppose that the supply of labour is upward sloping and the marginal product of labour increases.Which of the following statements is correct?
A)The wage rate will increase.
B)The wage rate will decrease.
C)The supply of labour curve will shift to the left.
D)The supply of labour curve will shift to the right.
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19
Which of the following is correct regarding the demand curve for labour?
A)It is the upward portion of the MP curve.
B)It is the downward portion of the MP curve.
C)It is the downward portion of the MRP curve.
D)It is the downward portion of the TP curve.
A)It is the upward portion of the MP curve.
B)It is the downward portion of the MP curve.
C)It is the downward portion of the MRP curve.
D)It is the downward portion of the TP curve.
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20
What is the term for the increase in a firm's total revenue which results from the use of one more unit of input?
A)Marginal profit.
B)Marginal revenue.
C)Marginal revenue product.
D)Marginal product.
A)Marginal profit.
B)Marginal revenue.
C)Marginal revenue product.
D)Marginal product.
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21
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What has happened to the demand for and the supply of labour in Canada over the last forty years?
A)The demand has increased and the supply has decreased.
B)The supply has increased and the demand has decreased.
C)Both the demand and the supply have increased.
D)Both the demand and the supply have decreased.
E)The demand has increased but the supply has remained unchanged.
What has happened to the demand for and the supply of labour in Canada over the last forty years?
A)The demand has increased and the supply has decreased.
B)The supply has increased and the demand has decreased.
C)Both the demand and the supply have increased.
D)Both the demand and the supply have decreased.
E)The demand has increased but the supply has remained unchanged.
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22
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What has happened to the size of Canada's labour force over the last thirty years?
A)It has decreased slightly.
B)It has grown by about 10%.
C)It has grown by about 50%.
D)It has almost doubled.
What has happened to the size of Canada's labour force over the last thirty years?
A)It has decreased slightly.
B)It has grown by about 10%.
C)It has grown by about 50%.
D)It has almost doubled.
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23
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
Refer to the information above to answer this question.What is the firm's total revenue if the firm maximizes its profits?
A)$20.
B)$120.
C)$192.
D)$250.
E)$325.
Refer to the information above to answer this question.What is the firm's total revenue if the firm maximizes its profits?
A)$20.
B)$120.
C)$192.
D)$250.
E)$325.
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24
Which of the following statements is correct regarding an individual firm which obtains its labour in a perfectly competitive labour market?
A)It faces a downward-sloping labour demand curve and a upward-sloping labour supply curve.
B)It faces an upward-sloping labour demand curve and a downward-sloping labour supply curve.
C)It faces a downward-sloping labour demand curve and a horizontal labour supply curve.
D)It faces a horizontal labour demand curve and a upward-sloping labour supply curve.
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25
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What determines the productivity of labour?
A)The quantity of capital that labour has to work with.
B)The quality of the labour itself.
C)The state of technology.
D)The quantity of labour employed.
What determines the productivity of labour?
A)The quantity of capital that labour has to work with.
B)The quality of the labour itself.
C)The state of technology.
D)The quantity of labour employed.
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26
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What was the size of Canada's labour force in 2013?
A)7.5 million.
B)10.6 million.
C)12.2 million.
D)19.1 million.
E)21.5 million.
What was the size of Canada's labour force in 2013?
A)7.5 million.
B)10.6 million.
C)12.2 million.
D)19.1 million.
E)21.5 million.
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27
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
Refer to the information above to answer this question.What is the firm's total wage bill if the firm maximizes its profits?
A)$30.
B)$64.
C)$120.
D)$154.
E)$192.
Refer to the information above to answer this question.What is the firm's total wage bill if the firm maximizes its profits?
A)$30.
B)$64.
C)$120.
D)$154.
E)$192.
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28
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
Refer to the information above to answer this question.What is the equilibrium wage rate if the firm maximizes its profits?
A)$5.
B)$12.
C)$18.
D)$20.
E)Cannot be determined.
Refer to the information above to answer this question.What is the equilibrium wage rate if the firm maximizes its profits?
A)$5.
B)$12.
C)$18.
D)$20.
E)Cannot be determined.
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29
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
Which of the following in the correct statement regarding the change that has taken place in Canada's percentage of the (labour force)population which is in the labour force since 1950?
A)The male participation rate has decreased while the female participation rate has increased.
B)The female participation rate has decreased while the male participation rate has increased.
C)Both the male and female rates have decreased.
D)Both the male and female rates have increased.
Which of the following in the correct statement regarding the change that has taken place in Canada's percentage of the (labour force)population which is in the labour force since 1950?
A)The male participation rate has decreased while the female participation rate has increased.
B)The female participation rate has decreased while the male participation rate has increased.
C)Both the male and female rates have decreased.
D)Both the male and female rates have increased.
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30
Refer to the information above to answer this question.Which of the following statements is correct regarding the firm's labour supply curve?
A)It is perfectly inelastic.
B)It is perfectly elastic.
C)It is upward-sloping.
D)It is downward-sloping.
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31
Refer to the information above to answer this question.What is the firm's total profit if its fixed cost are $180,labour is its only variable costs and it maximizes its profits?
A)$14.
B)$24.
C)$80.
D)$204.
E)Cannot be determined.
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32
Refer to the information above to answer this question.Which of the following statements is correct?
A)This firm is hiring labour in a perfectly competitive market and selling its product in an imperfectly competitive market.
B)This firm is both hiring its labour and selling its product in perfectly competitive markets.
C)This firm is hiring its labour in a perfectly competitive market but no comment is possible about the market conditions under which it is selling its product.
D)This firm is selling its product in a perfectly competitive market but no comment can be made about the market conditions under which it is hiring its labour.
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33
Refer to the information above to answer this question.What quantity of labour will the firm employ if it maximizes its profits?
A)2.
B)4.
C)6.
D)7.
E)8.
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34
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What happens if the demand for labour increases more than does the supply of labour?
A)Wage rates will increase.
B)Wage rates will decrease.
C)The effect on wage rates is indeterminate.
D)The quantity of hours worked will decline.
What happens if the demand for labour increases more than does the supply of labour?
A)Wage rates will increase.
B)Wage rates will decrease.
C)The effect on wage rates is indeterminate.
D)The quantity of hours worked will decline.
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35
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What is the term for a market structure in which there is only one buyer?
A)Monopoly.
B)Absolute advantage.
C)Monopsony.
D)Natural monopoly.
What is the term for a market structure in which there is only one buyer?
A)Monopoly.
B)Absolute advantage.
C)Monopsony.
D)Natural monopoly.
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36
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What happens if the supply of labour increases more than does the demand for labour?
A)Wage rates will increase.
B)Wages rates will decrease.
C)The effect on wage rates is indeterminate.
D)The quantity of hours worked will decline.
What happens if the supply of labour increases more than does the demand for labour?
A)Wage rates will increase.
B)Wages rates will decrease.
C)The effect on wage rates is indeterminate.
D)The quantity of hours worked will decline.
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37
Refer to the information above to answer this question.What is the firm's total revenue if it maximizes its profits?
A)$10.
B)$22.
C)$52.
D)$260.
E)$265.
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38
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What is the ultimate determinant of the real wage in Canada?
A)The level of taxation by all levels of government.
B)The value of the Canadian dollar.
C)The real output of goods and service in Canada divided by the labour force.
D)The number of Canadians actively participating in the labour force.
What is the ultimate determinant of the real wage in Canada?
A)The level of taxation by all levels of government.
B)The value of the Canadian dollar.
C)The real output of goods and service in Canada divided by the labour force.
D)The number of Canadians actively participating in the labour force.
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39
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What will be the effect if an economy experiences growth in its labour productivity over a period of years?
A)The marginal revenue product of labour will decrease and,graphically,the demand for labour curve will shift to the right.
B)The marginal revenue product of labour will increase and,graphically,the demand for labour curve will shift to the right.
C)The marginal revenue product of labour will increase and,graphically,the supply of labour curve will shift to the left.
D)The marginal revenue product of labour will increase and,graphically,the supply of labour curve will shift to the right.
What will be the effect if an economy experiences growth in its labour productivity over a period of years?
A)The marginal revenue product of labour will decrease and,graphically,the demand for labour curve will shift to the right.
B)The marginal revenue product of labour will increase and,graphically,the demand for labour curve will shift to the right.
C)The marginal revenue product of labour will increase and,graphically,the supply of labour curve will shift to the left.
D)The marginal revenue product of labour will increase and,graphically,the supply of labour curve will shift to the right.
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40
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
What is real wage?
A)The nominal wage multiplied by the price level.
B)The purchasing power,given a set of prices,of the nominal wage.
C)The income received for the use of capital.
D)The wage rate expressed as a dollar and cents figure.
What is real wage?
A)The nominal wage multiplied by the price level.
B)The purchasing power,given a set of prices,of the nominal wage.
C)The income received for the use of capital.
D)The wage rate expressed as a dollar and cents figure.
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41
What does the term economic rent mean?
A)The return to a factor of production that has a perfectly elastic supply.
B)The return to a factor of production that has a perfectly inelastic supply.
C)The return to labour.
D)The return to landlords.
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42
Refer to the graph above to answer this question.Suppose that the original supply and demand curves for labour are S1 and D1 and that the market is in equilibrium at point e.What can you conclude has happened if a new equilibrium at c occurs?
A)The supply of labour,the demand for labour,the wage rate and the equilibrium quantity have all increased.
B)The demand for labour and the wage rate have both increased while the supply of labour and the equilibrium quantity have both decreased.
C)The demand for labour and the wage rate have both increased while the supply of labour has decreased and the equilibrium quantity has not changed.
D)The wage rate has increased,while both the supply of and demand for labour have decreased and the equilibrium wage has remained unchanged.
E)The wage rate and the equilibrium quantity have increased while both the demand for and the supply of labour has increased.
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43
Refer to the graph above to answer this question.Which of the following statements is correct?
A)The supply of land is perfectly elastic.
B)The shift from D2 to D3 illustrates a decrease in demand.
C)D1,D2 and D3 are all perfectly inelastic demand curves.
D)The rent is demand-driven.
E)The supply of land is rent-driven.
A)The supply of land is perfectly elastic.
B)The shift from D2 to D3 illustrates a decrease in demand.
C)D1,D2 and D3 are all perfectly inelastic demand curves.
D)The rent is demand-driven.
E)The supply of land is rent-driven.
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44
Refer to the graph above to answer this question.Suppose that the original supply and demand curves for labour are S1 and D1 and that the market is in equilibrium at point e.What can you conclude has happened if a new equilibrium at b occurs?
A)The supply of labour,the wage rate and the equilibrium quantity have all increased.
B)Both the demand for labour and the wage rate have increased while the equilibrium quantity has decreased.
C)The wage rate and the equilibrium quantity have increased while the supply of labour has decreased.
D)The wage rate has increased while both the supply of labour and the equilibrium quantity have decreased.
E)The wage rate and the equilibrium quantity have increased while both the demand for and the supply of labour has increased.
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45
Economic research has established that individuals with more formal education enjoy,on average,higher earnings throughout their lives.Approximately how much higher is the annual income of those with a post-secondary education compared with those who have elementary school education only?
A)50% higher.
B)Twice as high.
C)Four times as high.
D)Eight times as high.
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46
Which of the following is a non-renewable natural resource?
A)Water.
B)Oil.
C)Wild fish.
D)Trees.
A)Water.
B)Oil.
C)Wild fish.
D)Trees.
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47
All of the following,expect one,are examples of how a trade union or professional association successfully restricts the supply of labour available.Which is the exception?
A)Only licensed M.D.s (doctors)can practice medicine.
B)Only licensed pipe-fitters can open a gas line.
C)Only members of the Bar can argue a case in court.
D)Only individuals with a PhD can be employed at a university.
E)The government imposes a minimum wage law.
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48
Refer to the graph above to answer this question.Which of the following statements is correct?
A)If demand is D1,land is free.
B)If demand is D2,rent is R2.
C)If demand is D3,rent is R3.
D)If demand is D1,rent is R1.
A)If demand is D1,land is free.
B)If demand is D2,rent is R2.
C)If demand is D3,rent is R3.
D)If demand is D1,rent is R1.
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49
Refer to the graph above to answer this question.Suppose that the demand for land is D3 and the market is in equilibrium.What is the equilibrium rent?
A)0.
B)R1.
C)R2.
D)R3.
A)0.
B)R1.
C)R2.
D)R3.
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50
All of the following,except one,are explanations of the wage differentials that exist in our economy.Which is the exception?
A)Some jobs have unpleasant characteristics that do not exist with other jobs.
B)Some jobs involve physical risks that do not exist with other jobs.
C)Discrimination exists in the job market.
D)Some jobs have non-pecuniary benefits that are absent in other jobs.
E)The level of human capital is the same among individuals.
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51
Graphically,what is necessary for economic rent to exist?
A)A perfectly inelastic demand curve.
B)An elastic demand curve.
C)A perfectly elastic supply curve.
D)An inelastic supply curve.
E)Both a perfectly elastic supply and demand curve.
A)A perfectly inelastic demand curve.
B)An elastic demand curve.
C)A perfectly elastic supply curve.
D)An inelastic supply curve.
E)Both a perfectly elastic supply and demand curve.
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52
Why are the very best professional squash players paid so much less than even the average professional hockey player?
A)There are many more good squash players than hockey players.
B)The skills needed to be a good hockey player are much greater than those needed to be a good squash player.
C)The general public does not pay as much attention to the game of squash as they do to hockey.
D)Hockey players appear in many more games per year than do squash players.
A)There are many more good squash players than hockey players.
B)The skills needed to be a good hockey player are much greater than those needed to be a good squash player.
C)The general public does not pay as much attention to the game of squash as they do to hockey.
D)Hockey players appear in many more games per year than do squash players.
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53
All of the following except one are valid explanations of how unions can raise the wages of their members.Which is the exception?
A)By encouraging firms to employ more workers.
B)By increasing the demand for their members through advertising the employer's product.
C)By increasing the demand for their members through advertising their members' skills.
D)By encouraging the government to establish legal qualifications,thereby restricting the supply of labour.
E)By negotiating a fixed wage rate above equilibrium.
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54
What is meant by the term human capital?
A)The total number of people employed by a firm.
B)Those who must continually learn and use theoretical and analytical knowledge in their work.
C)The ideas and effort that are put into the production process by individuals.
D)The accumulation of all skills and knowledge acquired by individuals.
E)The quantity of labour employed through employment agencies.
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55
Suppose that the price of oil today is $20 and the interest rate is 5%.Further,suppose that the interest rate remains unchanged and no new discoveries of oil are made.If 2 years from now,the price of oil is $21.50,from the economist's point of view which of the following statements is correct?
A)The rate of oil extraction has been too slow.
B)The rate of oil extraction has been too rapid.
C)The rate of oil extraction has been exactly right.
D)The rate of oil extraction has been either exactly right or too slow but it definitely could not have been too rapid.
A)The rate of oil extraction has been too slow.
B)The rate of oil extraction has been too rapid.
C)The rate of oil extraction has been exactly right.
D)The rate of oil extraction has been either exactly right or too slow but it definitely could not have been too rapid.
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56
Refer to the graph above to answer this question.Suppose that the original supply and demand curves for labour are S1 and D1 and that the market is in equilibrium at point e.What can you conclude has happened if a new wage rate of W2 and quantity of Qb occur?
A)Both the supply of and the demand for labour have decreased.
B)The supply of labour has decreased and the demand has increased.
C)The demand for labour has decreased and the supply has increased.
D)W2 is a non-equilibrium wage rate that may be the result of successful bargaining by a strong trade union.
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57
The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
If trend lines representing Canada's real GDP per hour and the real hourly wage in Canada were plotted over a period of the last 50 years,what type of correlation would it show?
A)A very close correlation for the whole period.
B)A very close correlation for the first twenty five years followed by the real hourly wage rate raising significantly above real GDP per hour.
C)A very close correlation for the first twenty five years followed by the real GDP per hour raising significantly above real hourly wage rate.
D)A gradual convergence of the two trends starting from the position of the real hourly wage rate being significantly above real GDP per hour.
If trend lines representing Canada's real GDP per hour and the real hourly wage in Canada were plotted over a period of the last 50 years,what type of correlation would it show?
A)A very close correlation for the whole period.
B)A very close correlation for the first twenty five years followed by the real hourly wage rate raising significantly above real GDP per hour.
C)A very close correlation for the first twenty five years followed by the real GDP per hour raising significantly above real hourly wage rate.
D)A gradual convergence of the two trends starting from the position of the real hourly wage rate being significantly above real GDP per hour.
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58
Refer to the graph above to answer this question.Suppose that the original supply and demand curves for labour are S1 and D1 and that the market is in equilibrium at point e.What can you conclude has happened if a new equilibrium at a occurs?
A)The supply of labour,the wage rate and the equilibrium quantity have all increased.
B)The demand for labour,the wage rate and the equilibrium quantity have all increased.
C)The wage rate and the equilibrium quantity have increased while the supply of labour has decreased.
D)The wage rate and the equilibrium quantity have increased while the demand for labour has decreased.
E)The wage rate and the equilibrium quantity have increased while both the demand for and the supply of labour has increased.
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59
What is meant by the term common property resource?
A)Any ordinary resource such as labour or machinery.
B)A resource which is not owned by an individual or firm.
C)A resource with perfectly elastic supply.
D)A resource with perfectly inelastic supply.
A)Any ordinary resource such as labour or machinery.
B)A resource which is not owned by an individual or firm.
C)A resource with perfectly elastic supply.
D)A resource with perfectly inelastic supply.
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60
What is meant by the term transfer earnings?
A)The necessary payments a factor of production must earn in order for it to remain in its present use.
B)Costs that are actually paid out in money.
C)One-way transactions where payments are made,but no goods or services flow back in return.
D)The amount of money a firm receives from its sales.
A)The necessary payments a factor of production must earn in order for it to remain in its present use.
B)Costs that are actually paid out in money.
C)One-way transactions where payments are made,but no goods or services flow back in return.
D)The amount of money a firm receives from its sales.
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61
Who were the Luddites?
A)The name of a group of workers who supported technological change.
B)The name of a group of workers who favoured increased trade with North America.
C)The name of a group of industrialists who were anti-free traders.
D)The name of a group of workers who fought the introduction of machines.
A)The name of a group of workers who supported technological change.
B)The name of a group of workers who favoured increased trade with North America.
C)The name of a group of industrialists who were anti-free traders.
D)The name of a group of workers who fought the introduction of machines.
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62
Which of the following would tend to raise the price of a natural resource?
A)If more of it was discovered.
B)If its marginal revenue product decreased.
C)If the interest rate decreased.
D)Graphically,if the demand curve for it shifted to the left.
A)If more of it was discovered.
B)If its marginal revenue product decreased.
C)If the interest rate decreased.
D)Graphically,if the demand curve for it shifted to the left.
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63
What is the term for the effect of a rise in total output leading to an increase in the demand for labour?
A)The crowding-out effect.
B)The factor substitution effect.
C)The real-balances effect.
D)The factor output effect.
A)The crowding-out effect.
B)The factor substitution effect.
C)The real-balances effect.
D)The factor output effect.
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64
Suppose that the current price of oil is $60 a barrel and the interest rate is 3%.Further,suppose that the interest rate remains unchanged and no new discoveries of oil are made.If two years from now the economist for the National Petroleum company believes that the rate of oil extraction is exactly right,believes that the rate of oil extraction has been too rapid,what would be the likely price for a barrel of oil at that time?
A)Above $63.60 a barrel
B)$63.60 a barrel
C)Below $63.60 a barrel
D)Above $65 a barrel
A)Above $63.60 a barrel
B)$63.60 a barrel
C)Below $63.60 a barrel
D)Above $65 a barrel
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65
What is meant by the factor output effect?
A)The phenomenon of a higher total output leading to an increased demand for labour.
B)The phenomenon of an increased demand for labour leading to a higher total output.
C)The phenomenon of replacing one factor with another as a result of technological change.
D)The increase in output which results from an increase in labour.
A)The phenomenon of a higher total output leading to an increased demand for labour.
B)The phenomenon of an increased demand for labour leading to a higher total output.
C)The phenomenon of replacing one factor with another as a result of technological change.
D)The increase in output which results from an increase in labour.
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66
What is meant by the factor substitution effect?
A)The phenomenon of replacing consumer goods with capital goods.
B)The phenomenon of replacing capital goods with consumer goods.
C)The phenomenon of replacing technology with capital goods.
D)The phenomenon of replacing one factor with another as a result of technological change.
A)The phenomenon of replacing consumer goods with capital goods.
B)The phenomenon of replacing capital goods with consumer goods.
C)The phenomenon of replacing technology with capital goods.
D)The phenomenon of replacing one factor with another as a result of technological change.
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67
Suppose that the current price of oil is $60 a barrel and the interest rate is 3%.Further,suppose that the interest rate remains unchanged and no new discoveries of oil are made.If two years from now the economist for the National Petroleum company believes that the rate of oil extraction is exactly right,believes that the rate of oil extraction has been too slow,what would be the likely price for a barrel of oil at that time?
A)Above $63.60 a barrel
B)$63.60 a barrel
C)Below $63.60 a barrel
D)Below $60 a barrel
A)Above $63.60 a barrel
B)$63.60 a barrel
C)Below $63.60 a barrel
D)Below $60 a barrel
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68
"Since it is in the interest of fishers as a group not to over-exploit the stock of fish,conservation of fish stocks is not a problem." What is wrong with this statement?
A)It does not recognize the fact that the supply of fish is inelastic.
B)It does not recognize the fact that conservation practices by an individual fisher are rational only if all fishers practice them.
C)It does not recognize the fact that more and more fish are now raised on fish farms.
D)It fails to take into account the necessary interest-rate discounting of the asset of fish stocks.
A)It does not recognize the fact that the supply of fish is inelastic.
B)It does not recognize the fact that conservation practices by an individual fisher are rational only if all fishers practice them.
C)It does not recognize the fact that more and more fish are now raised on fish farms.
D)It fails to take into account the necessary interest-rate discounting of the asset of fish stocks.
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69
Which of the following statements is correct?
A)A machine is a capital good but money is not.
B)Money is a capital good but a machine in a factory is not.
C)Both a machine and money are capital goods.
D)Neither machines nor money are capital goods.
A)A machine is a capital good but money is not.
B)Money is a capital good but a machine in a factory is not.
C)Both a machine and money are capital goods.
D)Neither machines nor money are capital goods.
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70
Suppose that the current price of oil is $60 a barrel and the present interest rate is 3%.Further,suppose that the interest rate remains unchanged and no new discoveries of oil are made.If the economist for the National Petroleum company believes that the rate of oil extraction is exactly right,what should be the price for a barrel of oil three years from now?
A)$60
B)$61.8
C)$63
D)$65.5
A)$60
B)$61.8
C)$63
D)$65.5
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71
Suppose that the current price of oil is $60 a barrel and the present interest rate is 3%.Further,suppose that the interest rate remains unchanged and no new discoveries of oil are made.If the economist for the National Petroleum company believes that the rate of oil extraction is exactly right,what should be the price for a barrel of oil one year from now?
A)$60
B)$61.8
C)$63
D)$65.5
A)$60
B)$61.8
C)$63
D)$65.5
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72
Which of the following statements best describes Schumpeter's view of profits?
A)Profits occur only in an economy when full employment is achieved.
B)Competition within a capitalist economy would tend to result in zero economic profit.
C)The source of profits,whatever level they may be,is the result of entrepreneurial activity.
D)Profits occur only when the economy is in a boom.
A)Profits occur only in an economy when full employment is achieved.
B)Competition within a capitalist economy would tend to result in zero economic profit.
C)The source of profits,whatever level they may be,is the result of entrepreneurial activity.
D)Profits occur only when the economy is in a boom.
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73
The average wage rate in Canada has increased over the last 30 years.Which of the following is the most likely explanation?
A)The demand for labour has decreased.
B)The supply of labour has decreased.
C)The demand for labour has increased more than the supply of labour has decreased.
D)The demand for labour has increased more than the supply of labour has increased.
A)The demand for labour has decreased.
B)The supply of labour has decreased.
C)The demand for labour has increased more than the supply of labour has decreased.
D)The demand for labour has increased more than the supply of labour has increased.
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74
What is the engine of economic growth according to Joseph Schumpeter?
A)The accumulation of capital goods.
B)Technological change.
C)The activity of the entrepreneur.
D)Increased labour productivity.
A)The accumulation of capital goods.
B)Technological change.
C)The activity of the entrepreneur.
D)Increased labour productivity.
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75
All of the following except one are valid explanations for the existence of profits in a capitalistic economy.Which is the exception?
A)The innovations of the entrepreneur.
B)A growing,dynamic economy that creates periods of disequilibrium.
C)The fact that the MRPk is positive.
D)The existence of oligopolies and monopolies that inhibit the natural tendency for profits to be competed away.
A)The innovations of the entrepreneur.
B)A growing,dynamic economy that creates periods of disequilibrium.
C)The fact that the MRPk is positive.
D)The existence of oligopolies and monopolies that inhibit the natural tendency for profits to be competed away.
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76
Which of the following is assumed in Ricardo's concept of economic rent?
A)A perfectly inelastic supply curve.
B)A perfectly inelastic demand curve.
C)A perfectly elastic supply curve.
D)A perfectly elastic demand curve.
A)A perfectly inelastic supply curve.
B)A perfectly inelastic demand curve.
C)A perfectly elastic supply curve.
D)A perfectly elastic demand curve.
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77
Which of the following statements best describes Schumpeter's view of the source of economic profits in capitalism?
A)Innovations of the entrepreneur are the source of economic profits in capitalism.
B)Government regulations are the source of economic profits in capitalism.
C)Monopoly power of big businesses is the source of economic profits in capitalism.
D)Impersonal forces of the technostructure are the source of economic profits in capitalism
A)Innovations of the entrepreneur are the source of economic profits in capitalism.
B)Government regulations are the source of economic profits in capitalism.
C)Monopoly power of big businesses is the source of economic profits in capitalism.
D)Impersonal forces of the technostructure are the source of economic profits in capitalism
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78
Suppose that the current price of oil is $60 a barrel and the interest rate is 3%.If the National Petroleum company extracts and sells its oil at $60 a barrel today and the revenue is invested,what will be its value per barrel at the end of year 2?
A)$60
B)$63
C)$63.6
D)$66
A)$60
B)$63
C)$63.6
D)$66
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79
All of the following,except one,is correct regarding the demand for capital goods.Which is the exception?
A)It is greater if MRPk is higher.
B)It is greater if the rate of interest is lower.
C)It is affected by technological change.
D)It is equal to the demand for labour.
A)It is greater if MRPk is higher.
B)It is greater if the rate of interest is lower.
C)It is affected by technological change.
D)It is equal to the demand for labour.
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80
What is the most likely effect of an increase in the demand for a particular type of labour?
A)The wage rate for that type of labour will rise,and the quantity hired will decrease.
B)The wage rate for that type of labour will rise,and the quantity hired will also increase.
C)The wage rate for that type of labour will rise,but the quantity hired will remain unchanged.
D)The wage rate for that type of labour will fall,and the quantity hired will increase.
A)The wage rate for that type of labour will rise,and the quantity hired will decrease.
B)The wage rate for that type of labour will rise,and the quantity hired will also increase.
C)The wage rate for that type of labour will rise,but the quantity hired will remain unchanged.
D)The wage rate for that type of labour will fall,and the quantity hired will increase.
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