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Exam 18: The Markets for the Factors of Production

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Question 271

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In the United States, technological advances help explain persistently rising employment in the face of rising wages.

A) True
B) False

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Question 272

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In order to study labor markets more easily, we make which of the following assumptions about firms? (i) Firms sell their products in competitive markets. (ii) Firms buy their inputs in competitive markets. (iii) Firms maximize profits. (iv) Firms maximize revenues.

A) (iii) only
B) (i) and (iii) only
C) (i) , (ii) , and (iii) only
D) (i) , (ii) , (iii) , and (iv)

E) A) and B)
F) C) and D)

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Question 273

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The value of the marginal product of labor is calculated by multiplying the

If the demand curve for economics textbooks shifts to the left, then the value of the marginal product of labor for economics textbook authors will

An increase in the output price will increase the firm's demand for labor, all else equal.

Table 18-7 -Refer to Table 18-7. What is the value for the cell labeled FF?

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. The marginal product of the third worker is

Which of the following is not an example of a factor of production?

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

Suppose that the market for labor is initially in equilibrium. If the firm employs labor-saving technology, the equilibrium wage

The value of the marginal product of capital can be calculated as the marginal product of capital multiplied by the cost of the capital input.

Figure 18-7 -Refer to Figure 18-7. Assume W₁ = $15 and W₂ = $12, and the market is always in equilibrium. A shift of the labor supply curve from S₁ to S₂ would

For a profit-maximizing competitive firm, the value of marginal product curve is

Table 18-9 The following table shows the production function for a particular business. The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis. -Refer to Table 18-9. Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day. What is the value of the marginal product of labor for the second worker?

Figure 18-8 This figure below shows the labor market for automobile workers. The curve labeled S is the labor supply curve, and the curves labeled D₁ and D₂ are the labor demand curves. On the horizontal axis, L represents the quantity of labor in the market. -Refer to Figure 18-8. Which of the following events would most likely explain the shift of the labor-demand curve from D₁ to D₂?

When economists refer to a firm's capital, they are describing the

Consider the labor market for computer programmers. Because of the dot.com boom in the late 1990s, a lot of workers went to school to learn how to write computer code for one of thousands of new dot.com companies. However, when these computer programming students graduated the dot.com bust took place. The dot.com bust decreased the value of the marginal product of computer programmers. Holding all else equal what effect did these two circumstances have on the equilibrium quantity in the labor market for computer programmers?

As a result of a labeling mistake at the chemical factory, a farmer accidentally sprays weedkiller rather than fertilizer on half her land. As a result, she loses half of her productive farmland. If the property of diminishing returns applies to all factors of production, she should expect to see the marginal productivity of her remaining land

Let L represent the quantity of labor, and let Q represent the quantity of output. Suppose a certain production function includes the points (L = 7, Q = 27), (L = 8, Q = 35), and (L = 9, Q = 45). Based on these three points, this production function exhibits diminishing marginal product.

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