Question 1

Bobby knows that she is producing a value just equal to her wage.If the price of what she makes falls,Bobby knows that she

Accepted Answer

A)  will be able to keep her job. 
B)  is likely to work overtime. 
C)  will work less. 
D)  is likely to be fired. 
E)  will not be able to find work anywhere.

Question 2

If the price of pencils falls,the marginal product of labor will ________ and the value of the marginal product of labor will ________.

Accepted Answer

A)  fall; fall 
B)  remain unchanged; increase 
C)  rise; rise 
D)  remain unchanged; decrease 
E)  remain unchanged; remain unchanged

Question 3

Use the following table to answer the following questions:
 
-What is the value that belongs in cell D4?

Accepted Answer

A)  $600 
B)  $500 
C)  $150 
D)  $450 
E)  $300

Question 4

The substitution effect describes the

Accepted Answer

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

Question 5

When the opportunity cost of leisure is high,people tend to work ________ hours.When it is low,people tend to work ________ hours.

Accepted Answer

A)  the same; fewer 
B)  more; fewer 
C)  fewer; more 
D)  more; the same 
E)  fewer; the same

Question 6

If workers become more productive in a given occupation,they will likely see their employment ________.

Accepted Answer

A)  fall 
B)  double 
C)  rise 
D)  stay the same 
E)  go into overtime

Question 7

Use the following graph, which depicts Mighty Max’s labor demand for his duffel bag business, to answer the following questions. The labor demand curve shown is calculated based on a duffel bag price of $10. 
-If the wage of the fifth worker is $20 and his or her value of the marginal product of labor is $25,the firm

Accepted Answer

A)  benefits by stopping at this level of labor. 
B)  is likely to fire the fifth worker. 
C)  asks this fifth worker to work overtime. 
D)  is likely to benefit by hiring more workers. 
E)  is likely to lose profit by hiring more workers.

Question 8

Two events are occurring simultaneously in the labor market for laborers who produce sports apparel.First,the government's campaign to increase the activity rate among its citizens is proving successful,and more people are going to the gym on a regular basis.Second,the sports apparel industry is known for its relatively high pay and good benefits,which are attractive to workers. a.Graph the effect of each shift separately.Label the original equilibrium wage and quantity W₁ and L₁,respectively. b.What needs to be true about the relative size of these shifts if workers in this labor market are to earn higher wages?

Accepted Answer

The answer of Two events are occurring simultaneously in the...

Question 9

Use the following table,which shows the supply and demand schedules for workers in the country of Hovian,to answer the following questions:
 
-If the wage is set temporarily at $15,it will need to ________ to restore equilibrium.

Accepted Answer

A)  decrease to zero 
B)  increase to $35 
C)  fall 
D)  increase 
E)  remain unchanged

Question 10

Ummal travels back in time to deposit $100 in a high-interest-bearing savings account.When she returns to the present,she is a billionaire.We can expect Ummal to work ________ hours because of the ________ effect.

Accepted Answer

A)  more; substitution 
B)  more; income 
C)  fewer; substitution 
D)  more; labor-leisure 
E)  fewer; income

Question 11

The labor market is said to be in equilibrium when

Accepted Answer

A)  everyone who wants to work is supplying his or her labor. 
B)  the number of workers is equal to the number of jobs available at a specific wage. 
C)  firms are unwilling to hire more workers. 
D)  workers keep their hours constant. 
E)  the number of available workers is increasing.

Question 12

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

Accepted Answer

A)  fall; fall 
B)  increase; fall 
C)  stay the same; rise 
D)  decrease; rise 
E)  increase; increase

Question 13

The most important aspect(s)of labor,land,and capital is/are that they

Accepted Answer

A)  have derived demands. 
B)  are factors of production. 
C)  are inputs to the production process. 
D)  are resources in our economy. 
E)  have derived demands and are factors of production,inputs to the production process,and resources in our economy.

Question 14

Use the following table to answer the following questions:
 
-If the workers are paid $8 per hour,the price of the product is $4,and the fixed cost of the business is $20,then how many workers should the business employ?

Accepted Answer

A)  three 
B)  four 
C)  five 
D)  six 
E)  seven

Question 15

If a profit-maximizing firm hires its eleventh worker,then it can be inferred that when the firm hired the first 10 workers,the

Accepted Answer

A)  wage was larger than the value of the marginal product of labor (VMPL). 
B)  value of the marginal product of labor (VMPL)was larger than the wage. 
C)  marginal product of labor was increasing. 
D)  market was becoming less competitive. 
E)  labor demand curve of this firm was becoming more steep.

Question 16

Refer to the following graphs to answer the following questions: 
-Which graph shows a person who has a fixed quantity of hours that he or she is willing to work per week?

Accepted Answer

A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E

Question 17

Refer to the following graphs to answer the following questions: 
-Which graph shows the income effect dominating the substitution effect of higher wages?

Accepted Answer

A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E

Question 18

Economic rent is

Accepted Answer

A)  what a landlord earns by leasing land or capital. 
B)  the amount of money a person could have earned by using land for another purpose. 
C)  the difference between the market price and the rental price of a piece of land. 
D)  the difference between the rental price and the amount of money that could have been earned using the piece of land for another purpose. 
E)  the profits earned by a firm in production.

Question 19

Refer to the following graphs to answer the following questions:   
-Choose the graph that represents the following situation: A documentary on bottled water demonstrates the high impact this product has on the environment.In response,consumers drastically reduce their consumption of this product.

Accepted Answer

A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E

Question 20

The use of farm machinery to plant and harvest crops has increased because it is more productive than the typical farmhand.Demand for farmhands has

Accepted Answer

A)  remained steady. 
B)  shifted to other areas of the farm. 
C)  decreased. 
D)  fallen to zero. 
E)  increased.

Exam 14: The Demand and Supply of Resources

Bobby knows that she is producing a value just equal to her wage.If the price of what she makes falls,Bobby knows that she

If the price of pencils falls,the marginal product of labor will and the value of the marginal product of labor will .

Use the following table to answer the following questions: -What is the value that belongs in cell D4?

The substitution effect describes the

When the opportunity cost of leisure is high,people tend to work hours.When it is low,people tend to work hours.

If workers become more productive in a given occupation,they will likely see their employment ________.

Use the following table,which shows the supply and demand schedules for workers in the country of Hovian,to answer the following questions: -If the wage is set temporarily at $15,it will need to ________ to restore equilibrium.

Ummal travels back in time to deposit $100 in a high-interest-bearing savings account.When she returns to the present,she is a billionaire.We can expect Ummal to work hours because of the effect.

The labor market is said to be in equilibrium when

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

The most important aspect(s) of labor,land,and capital is/are that they

Use the following table to answer the following questions: -If the workers are paid $8 per hour,the price of the product is $4,and the fixed cost of the business is $20,then how many workers should the business employ?

If a profit-maximizing firm hires its eleventh worker,then it can be inferred that when the firm hired the first 10 workers,the

Refer to the following graphs to answer the following questions: -Which graph shows a person who has a fixed quantity of hours that he or she is willing to work per week?

Refer to the following graphs to answer the following questions: -Which graph shows the income effect dominating the substitution effect of higher wages?

Economic rent is

Refer to the following graphs to answer the following questions: -Choose the graph that represents the following situation: A documentary on bottled water demonstrates the high impact this product has on the environment.In response,consumers drastically reduce their consumption of this product.

The use of farm machinery to plant and harvest crops has increased because it is more productive than the typical farmhand.Demand for farmhands has