Question 1

Figure 18-1.On the graph,L represents the quantity of labor and Q represents the quantity of output per week. 
-Refer to Figure 18-1.Suppose the firm hires each unit of labor for $600 per week,and each unit of output sells for $9.What is the value of the marginal product of the third worker?

Accepted Answer

A)   $540
B)   $600
C)   $675
D)   $810E) A) and B)
F) A) and C)

Question 2

Which of the following events could decrease the demand for labor?

Accepted Answer

A)   An increase in the number of migrant workers
B)   An increase in the marginal productivity of workers
C)   A decrease in demand for the final product produced by labor
D)   A decrease in the supply of laborE) None of the above
F) All of the above

Question 3

A profit-maximizing,competitive firm will always hire an additional worker when the additional worker makes a positive contribution to

Accepted Answer

A)   total revenue.
B)   total profit.
C)   the value of the marginal product of labor.
D)   marginal revenue.E) B) and D)
F) All of the above

Question 4

Table 18-1.The table displays data for a small,competitive,profit-maximizing firm that produces and sells envelopes.The time frame is one week.
 
-Refer to Table 18-1.Suppose the firm sells each box of envelopes that it produces for $7.Suppose also that the firm's fixed costs amount to $400.How many workers should the firm hire in order to maximize profit,and what is the maximum profit?

Accepted Answer

A)   The firm should hire 2 workers;its maximum profit is $80.
B)   The firm should hire 2 workers;its maximum profit is $96.
C)   The firm should hire 3 workers;its maximum profit is $96.
D)   The firm should hire 3 workers;its maximum profit is $124.E) A) and B)
F) A) and C)

Question 5

Table 18-10
Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day.
 
-Refer to Table 18-10.What is the third worker's marginal product of labor?

Accepted Answer

A)   120 cookies
B)   140 cookies
C)   160 cookies
D)   180 cookiesE) C) and D)
F) B) and C)

Question 6

The opportunity cost of leisure is impossible to measure because we cannot measure leisure time in dollars.

Accepted Answer

A) True 
 B)False

Question 7

If the value of the marginal product of labor is less than the wage,then the firm could

Accepted Answer

A)   increase profit by hiring additional labor.
B)   increase profit by reducing the amount of labor hired.
C)   increase revenue by lowering output.
D)   reduce total cost by hiring additional workers.E) C) and D)
F) None of the above

Question 8

If a worker respond to an increase in the opportunity cost of leisure by taking less leisure,then his labor supply curve is

Accepted Answer

A)   horizontal.
B)   vertical.
C)   backward sloping.
D)   upward sloping.E) B) and D)
F) B) and C)

Question 9

Suppose that workers immigrate to Minnesota from Canada.Which of the following correctly describes what would happen in the market for labor in Minnesota?

Accepted Answer

A)   The equilibrium wage would increase,and the quantity of labor would increase.With more workers,the added output from an extra worker is larger.
B)   The equilibrium wage would decrease,and the quantity of labor would decrease.With fewer workers,the added output from an extra worker is smaller.
C)   The equilibrium wage would decrease,and the quantity of labor would increase.With more workers,the added output from an extra worker is smaller.
D)   The equilibrium wage would decrease,and the quantity of labor would increase.With more workers,the added output from an extra worker is larger.E) All of the above
F) A) and B)

Question 10

Fiona's hourly wage increases from $8 to $10.Which of the following describes a consequence of the increase in Fiona's wage?

Accepted Answer

A)   The opportunity cost of Fiona's leisure time has decreased.
B)   Fiona may choose to work fewer hours due to the increase in her wage.
C)   If Fiona's labor supply curve is upward sloping,she will choose to work fewer hours.
D)   Both a and b are correct.E) B) and D)
F) None of the above

Question 11

Competitive firms hire workers until the additional benefit they receive from the last worker hired is equal to (i) 
The additional cost of that worker.
(ii) 
The wage paid to that worker.
(iii) 
The marginal product of that worker.

Accepted Answer

A)   (i) only
B)   (iii) only
C)   (i) and (ii) only
D)   (ii) and (iii) onlyE) B) and D)
F) B) and C)

Question 12

Table 18-1
 
-Refer to Table 18-1.What is the marginal product of the fourth worker?

Accepted Answer

A)   5
B)   7.5
C)   8
D)   30E) B) and C)
F) A) and D)

Question 13

What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

Accepted Answer

A)   Labor supply decreases in Mexico and decreases in the United States.
B)   Labor supply increases in the United States and increases in Mexico.
C)   Labor supply increases in the United States and decreases in Mexico.
D)   Labor supply increases in Mexico and decreases in United States.E) None of the above
F) B) and C)

Question 14

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Accepted Answer

A) True 
 B)False

Question 15

Table 18-6
 
-Refer to Table 18-6.What is the value of the cell labeled GG?

Accepted Answer

A)   $400
B)   $100
C)   $0
D)  -$100E) A) and D)
F) C) and D)

Question 16

Figure 18-1.On the graph,L represents the quantity of labor and Q represents the quantity of output per week. 
-Refer to Figure 18-1.Suppose the firm sells its output for $20 per unit,and it pays each of its workers $1,250 per week.The firm maximizes profit by hiring

Accepted Answer

A)   3 workers.
B)   4 workers.
C)   5 workers.
D)   6 workers.E) A) and B)
F) A) and C)

Question 17

Suppose that a competitive firm hires labor up to the point at which the value of the marginal product equals the wage and that labor is the only input that varies for the firm.If the firm pays a wage of $700 per week and the marginal product of labor equals 100 units per week,then the marginal cost of producing an additional unit of output is

Accepted Answer

A)   $7.
B)   $70.
C)   $700.
D)   We do not have enough information to answer this question.E) None of the above
F) A) and B)

Question 18

Assume the market for handkerchiefs is competitive.A decrease in the market price of handkerchiefs

Accepted Answer

A)   decreases the demand for workers who make handkerchiefs and decreases their equilibrium wage.
B)   decreases the demand for workers who make handkerchiefs and increases their equilibrium wage.
C)   increases the demand for workers who make handkerchiefs and decreases their equilibrium wage.
D)   increases the demand for workers who make handkerchiefs and increases their equilibrium wage..E) A) and D)
F) A) and C)

Question 19

Suppose that due to flooding in Louisiana,100,000 farmers relocate from Louisiana to Texas.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and the rents earned by landowners in Texas?

Accepted Answer

A)   Both wages and rents would increase.
B)   Both wages and rents would decrease.
C)   Wages would increase,and rents would decrease.
D)   Wages would decrease,and rents would increase.E) C) and D)
F) None of the above

Question 20

Immigration of workers into the United States is often an important source of

Accepted Answer

A)   increases in the demand for labor in the United States.
B)   decreases in the demand for labor in the United States.
C)   increases in the supply of labor in the United States.
D)   decreases in the supply of labor in the United States.E) None of the above
F) All of the above

Exam 18: The Market for the Factors of Production

If the value of the marginal product of labor is less than the wage,then the firm could

Correct Answer
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Correct Answer
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Assume the market for handkerchiefs is competitive.A decrease in the market price of handkerchiefs

Correct Answer
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Correct Answer
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Figure 18-1.On the graph,L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1.Suppose the firm hires each unit of labor for $600 per week,and each unit of output sells for $9.What is the value of the marginal product of the third worker?

Correct Answer
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Fiona's hourly wage increases from $8 to $10.Which of the following describes a consequence of the increase in Fiona's wage?

Correct Answer
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Immigration of workers into the United States is often an important source of

Correct Answer
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A profit-maximizing,competitive firm will always hire an additional worker when the additional worker makes a positive contribution to

Correct Answer
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Suppose that workers immigrate to Minnesota from Canada.Which of the following correctly describes what would happen in the market for labor in Minnesota?

Correct Answer
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Competitive firms hire workers until the additional benefit they receive from the last worker hired is equal to (i) The additional cost of that worker. (ii) The wage paid to that worker. (iii) The marginal product of that worker.

Correct Answer
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Suppose that due to flooding in Louisiana,100,000 farmers relocate from Louisiana to Texas.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and the rents earned by landowners in Texas?

Correct Answer
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A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Correct Answer
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If a worker respond to an increase in the opportunity cost of leisure by taking less leisure,then his labor supply curve is

Correct Answer
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Table 18-10 Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day. -Refer to Table 18-10.What is the third worker's marginal product of labor?

Correct Answer
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Which of the following events could decrease the demand for labor?

Correct Answer
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Table 18-1 -Refer to Table 18-1.What is the marginal product of the fourth worker?

Correct Answer
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Figure 18-1.On the graph,L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1.Suppose the firm sells its output for $20 per unit,and it pays each of its workers $1,250 per week.The firm maximizes profit by hiring

Correct Answer
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Table 18-6 -Refer to Table 18-6.What is the value of the cell labeled GG?

Correct Answer
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What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

Correct Answer
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The opportunity cost of leisure is impossible to measure because we cannot measure leisure time in dollars.

Correct Answer
verified

Exam 18: The Market for the Factors of Production

If the value of the marginal product of labor is less than the wage,then the firm could

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assume the market for handkerchiefs is competitive.A decrease in the market price of handkerchiefs

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 18-1.On the graph,L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1.Suppose the firm hires each unit of labor for $600 per week,and each unit of output sells for $9.What is the value of the marginal product of the third worker?

Correct AnswerverifiedShow Answer

Fiona's hourly wage increases from $8 to $10.Which of the following describes a consequence of the increase in Fiona's wage?

Correct AnswerverifiedShow Answer

Immigration of workers into the United States is often an important source of

Correct AnswerverifiedShow Answer

A profit-maximizing,competitive firm will always hire an additional worker when the additional worker makes a positive contribution to

Correct AnswerverifiedShow Answer

Suppose that workers immigrate to Minnesota from Canada.Which of the following correctly describes what would happen in the market for labor in Minnesota?

Correct AnswerverifiedShow Answer

Competitive firms hire workers until the additional benefit they receive from the last worker hired is equal to (i) The additional cost of that worker. (ii) The wage paid to that worker. (iii) The marginal product of that worker.

Correct AnswerverifiedShow Answer

Suppose that due to flooding in Louisiana,100,000 farmers relocate from Louisiana to Texas.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and the rents earned by landowners in Texas?

Correct AnswerverifiedShow Answer

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Correct AnswerverifiedShow Answer

If a worker respond to an increase in the opportunity cost of leisure by taking less leisure,then his labor supply curve is

Correct AnswerverifiedShow Answer

Table 18-10 Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day. -Refer to Table 18-10.What is the third worker's marginal product of labor?

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Which of the following events could decrease the demand for labor?

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Table 18-1 -Refer to Table 18-1.What is the marginal product of the fourth worker?

Correct AnswerverifiedShow Answer

Figure 18-1.On the graph,L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1.Suppose the firm sells its output for $20 per unit,and it pays each of its workers $1,250 per week.The firm maximizes profit by hiring

Correct AnswerverifiedShow Answer

Table 18-6 -Refer to Table 18-6.What is the value of the cell labeled GG?

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What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

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The opportunity cost of leisure is impossible to measure because we cannot measure leisure time in dollars.

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