Question 1

If your wage increases from $10 per hour to $15 per hour, then your

Accepted Answer

A)  opportunity cost of an hour of leisure decreases by $5 per hour.
B)  opportunity cost of an hour of leisure increases by $5 per hour.
C)  out-of-pocket cost of an hour of leisure decreases by $5 per hour.
D)  out-of-pocket cost of an hour of leisure increases by $5 per hour.E) A) and B)
F) All of the above

Question 2

Scenario 18-1
Harry owns a snow-removal business. He hires workers to shovel driveways for him during the winter. The first worker he hires can shovel twelve driveways in one day. When Harry hires two workers, they can shovel a total of 22 driveways in one day. When Harry hires a third worker, he shovels an additional eight driveways in one day.
-Refer to Scenario 18-1. Suppose that Harry pays each worker $80 per day and that he charges each customer $20 to have his driveway shoveled. What is the value of the marginal product of labor for the second worker?

Accepted Answer

A)  $200
B)  $240
C)  $800
D)  $960E) None of the above
F) A) and B)

Question 3

Typically, as a firm hires additional workers, the marginal product of labor

Accepted Answer

A)  decreases, and the value of the marginal product of labor decreases.
B)  stays constant, and the value of the marginal product of labor decreases.
C)  decreases, and the value of the marginal product of labor stays constant.
D)  decreases, and the value of the marginal product of labor increases.E) B) and C)
F) All of the above

Question 4

Which of the following would be an example of capital for a computer software firm? (i) 
The firm's computer programmers
(ii) 
The wages the firm pays to its computer programmers
(iii) 
Computer equipment

Accepted Answer

A)  (i)  only
B)  (ii)  only
C)  (iii)  only
D)  (i)  and (iii)  onlyE) All of the above
F) None of the above

Question 5

Table 18-3 
-Refer to Table 18-3. Which firm's production function exhibits constant marginal product?

Accepted Answer

A)  Firm A
B)  Firm B
C)  Firm C
D)  Firm DE) None of the above
F) A) and B)

Question 6

Table 18-B
Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. 
-Refer to Table 18-11. What is the fifth worker's marginal product of labor?

Accepted Answer

A)  120 cupcakes
B)  140 cupcakes
C)  160 cupcakes
D)  180 cupcakesE) B) and D)
F) C) and D)

Question 7

In general, less productive workers are paid less than more productive workers.

Accepted Answer

A) True 
 B)False

Question 8

Table 18-12
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 18-12. Suppose the firm sells each box of envelopes that it produces for $6. The firm would not be interested in hiring a third worker unless the wage fell from its current level of $600 to what level?

Accepted Answer

A)  $564
B)  $557
C)  $554
D)  $551E) A) and B)
F) A) and C)

Question 9

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school increases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium wage for doctors will

Accepted Answer

A)  increase.
B)  decrease.
C)  not change.
D)  It is not possible to determine what will happen to the equilibrium wage.E) A) and B)
F) A) and C)

Question 10

When labor is the only input a firm uses, the marginal cost of a unit of output can be defined as the

Accepted Answer

A)  marginal revenue multiplied by the wage.
B)  marginal product of labor multiplied by the wage.
C)  marginal product of labor divided by the wage.
D)  None of the above is correct.E) B) and D)
F) A) and B)

Question 11

Capital owners are compensated according to the value of the marginal product of that capital.

Accepted Answer

A) True 
 B)False

Question 12

In a representative labor market,

Accepted Answer

A)  the wage adjusts to balance the supply and demand for labor.
B)  the wage equals the value of the marginal product of labor.
C)  an increase in the supply of labor increases the equilibrium wage.
D)  Both a and b are correct.E) All of the above
F) C) and D)

Exam 18: The Markets for the Factors of Production

In a representative labor market,

Correct Answer
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Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the fifth worker's marginal product of labor?

Correct Answer
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Table 18-3 -Refer to Table 18-3. Which firm's production function exhibits constant marginal product?

Correct Answer
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Capital owners are compensated according to the value of the marginal product of that capital.

Correct Answer
verified

Typically, as a firm hires additional workers, the marginal product of labor

Correct Answer
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In general, less productive workers are paid less than more productive workers.

Correct Answer
verified

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school increases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium wage for doctors will

Correct Answer
verified

Correct Answer
verified

When labor is the only input a firm uses, the marginal cost of a unit of output can be defined as the

Correct Answer
verified

Correct Answer
verified

Which of the following would be an example of capital for a computer software firm? (i) The firm's computer programmers (ii) The wages the firm pays to its computer programmers (iii) Computer equipment

Correct Answer
verified

If your wage increases from $10 per hour to $15 per hour, then your

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

In a representative labor market,

Correct AnswerverifiedShow Answer

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the fifth worker's marginal product of labor?

Correct AnswerverifiedShow Answer

Table 18-3 -Refer to Table 18-3. Which firm's production function exhibits constant marginal product?

Correct AnswerverifiedShow Answer

Capital owners are compensated according to the value of the marginal product of that capital.

Correct AnswerverifiedShow Answer

Typically, as a firm hires additional workers, the marginal product of labor

Correct AnswerverifiedShow Answer

In general, less productive workers are paid less than more productive workers.

Correct AnswerverifiedShow Answer

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school increases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium wage for doctors will

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When labor is the only input a firm uses, the marginal cost of a unit of output can be defined as the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following would be an example of capital for a computer software firm? (i) The firm's computer programmers (ii) The wages the firm pays to its computer programmers (iii) Computer equipment

Correct AnswerverifiedShow Answer

If your wage increases from $10 per hour to $15 per hour, then your

Correct AnswerverifiedShow Answer

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