FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 18: The Markets for the Factors of Production

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 81

True/False

Review LaterAdd Note

Review Later

An increase in a product's price will shift the labor demand curve for workers who produce that product to the left.

A) True
B) False

Correct Answer

verified

Show Answer

Question 82

True/False

Review LaterAdd Note

Review Later

When a competitive firm hires labor up to the point at which the value of the marginal product of labor equals the wage, it also produces up to the point at which the price of output equals average variable cost.

A) True
B) False

Correct Answer

verified

Show Answer

Question 83

Multiple Choice

Review LaterAdd Note

Suppose that an industrial accident at a factory destroys a significant number of high-speed blenders that bartenders use to mix frozen drinks. What will happen in the labor market for bartenders?

Figure 18-8 The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. ​ -Refer to Figure 18-8. Suppose the shop charges $125 per repair. Over what interval of wages, W, would the shop maximize its profit by hiring exactly 4 mechanics? (Determine W₁ and W₂ such that W₁ < W < W₂ ).

Figure 18-1 -Refer to Figure 18-1. The shape of the curve suggests the presence of

The demand for computer programmers is inseparably tied to the supply of computer software.

If the demand curve for wedding cakes shifts to the right, then the value of the marginal product of labor for bakers will

Table 18-6 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. ​ ​ $\begin{array} { | c | c | c | c | c | c | } \hline \begin{array} { c } \text { Labor } \\\text { (Number of } \\\text { workers) }\end{array} & \begin{array} { c } \text { Output } \\\text { (Cupcakes per } \\\text { day) }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Product } \\\text { of Labor } \\\text { (Cupcakes per } \\\text { day) }\end{array} & \begin{array} { c } \text { Value of the } \\\text { Marginal } \\\text { Product of Labor } \\\text { (Cupcakes) }\end{array} & \begin{array} { c } \text { Wage } \\\text { (Dollarsper } \\\text { worker per } \\\text { day) }\end{array} & \begin{array} { c } \text { Margin } \\\text { Profit } \\\text { (Dollar }\end{array} \\\hline 0 & 0 & & & 325 & \\\hline 1 & 200 & & & 325 & \\\hline 2 & 350 & & & 325 & \\\hline 3 & 475 & & & 325 & \\\hline 4 & 575 & & &325 & \\\hline\end{array}$ ​ -Refer to Table 18-6. What is the third worker's marginal product of labor?

Figure 18-8 The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. ​ -Refer to Figure 18-8. The production process depicted on the graph exhibits _______ marginal product of labor.

What is the relationship between the marginal product of labor and the value of the marginal product of labor?

Daryn is raking leaves to earn money for his university's economics club. In the first hour, he rakes 8 bags of leaves. In the second hour, he rakes 6 bags of leaves. If he earns $8 per hour, the value of the marginal product of the second hour of labor is $48.

"The firm hires the factor up to the point where the value of the factor's marginal product is equal to the factor's price." This statement applies to which factor of production?

The theory of labor supply is based on the trade-off between __________.

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

When an individual's income goes up, that individual may choose to supply less labor, resulting in a backward-sloping labor supply curve.

In the 1980s, the dangerous Ebola virus entered the United States through contaminated monkeys that were imported for use in medical experiments. Suppose this virus had not been contained but had spread to the general population. Assume that the virus is lethal in half of the people who are exposed to it. Describe the resulting effect on labor productivity.

Table 18-7 The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. Assume that labor is the only input that varies for the firm. ​ ​ $\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Labor } \\\text { (Number of workers) }\end{array} & \begin{array} { c } \text { Marginal Product of Labor } \\\text { (Boxes of envelopes per week) }\end{array} & \begin{array} { c } \text { Wage } \\\text { (Dollars per } \\\text { worker per week) }\end{array} \\\hline 0 & & \\\hline 1 & 133 & 393 \\\hline 2 & 111 & 393 \\\hline 3 & 93 & 393 \\\hline 4 & 83 & 393 \\\hline 5 & 75 & 393 \\\hline\end{array}$ ​ -Refer to Table 18-7. Suppose the firm sells each box of envelopes that it produces for $5. The firm would not be interested in hiring a fifth worker unless the wage fell from its current level of $393 to what level?

The equilibrium purchase price of an acre of land depends upon the current value of the marginal product of land and upon the __________.

Figure 18-3 The figure shows a particular profit-maximizing, competitive firm's value-of-marginal-product (VMP) curve. ​ -Refer to Figure 18-3. Suppose the marginal product of the fifth unit of labor is 30 units of output per day. The figure implies that the

Rent, interest, and profit are all forms of income paid to the owners of