Question 1

Graph 18-1  This graph represents the value of marginal product for a firm that sells its product in a competitive market.Use the graph to answer the following question(s) .
-Refer to Graph 18-1.If a firm was operating at a level of output above Q*, decreasing the amount of labour would do which of the following?
(i)  raise profit
(ii)  possibly lower revenue
(iii)  increase the marginal product of labour

Accepted Answer

A)  (i)  and (ii) 
B)  (ii)  and (iii) 
C)  (i)  and (iii) 
D)  (i) , (ii)  and (iii) E) A) and B)
F) A) and C)

Question 2

Graph 18-1  This graph represents the value of marginal product for a firm that sells its product in a competitive market.Use the graph to answer the following question(s) .
-Refer to Graph 18-1.To maximise profit, a firm would hire labour at a level:

Accepted Answer

A)  greater than Q*
B)  equal to Q*
C)  less than Q*
D)  there is not enough information; the supply curve is needed to make this decisionE) B) and C)
F) A) and B)

Question 3

According to the information provided, if Gertrude is a price taker in the crew market she has only to decide:

Accepted Answer

A)  how many crew members to hire
B)  the wage to pay the crew she hires
C)  the size of the boats others use to catch tuna
D)  the price of the tuna she will catchE) B) and C)
F) B) and D)

Question 4

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

Accepted Answer

A)  wage / (marginal product of labour) 
B)  (marginal product of labour)  / wage
C)  marginal revenue - wage
D)  marginal product of labour - wageE) A) and B)
F) C) and D)

Question 5

The Luddite revolt:

Accepted Answer

A)  occurred in England prior to the industrial revolution
B)  saw the government restricting the spread of new technology to protect skilled knitters
C)  saw owners of weaving machines lobby parliament to restrict unfair competition from low-paid skilled knitters
D)  led to the term luddite to describe anyone opposed to new technology.E) A) and B)
F) A) and C)

Question 6

The purchase price of capital is:

Accepted Answer

A)  the price a person pays to own that factor of production indefinitely
B)  the price received from the flow of some capital services
C)  the value of the capital to the firm
D)  always less than the rental priceE) B) and D)
F) A) and B)

Question 7

When a firm decides to retain its earnings instead of pay dividends, the shareholders are not being rewarded.

Accepted Answer

A) True 
 B)False

Question 8

Suppose a massive influenza outbreak wipes out 30% of Australia's workforce.Beside the human tragedy, the effect of the outbreak on the remaining workers would be to:

Accepted Answer

A)  raise their marginal productivity
B)  decrease their average productivity
C)  decrease the value of their marginal productivity of labour
D)  we cannot say without more informationE) All of the above
F) None of the above

Question 9

Identify the conditions where the labour demand curve will shift?
(i)  there is a change in productivity
(ii)  there is a change in output prices
(iii)  there is a change in wage levels

Accepted Answer

A)  (i)  and (ii) 
B)  (ii)  and (iii) 
C)  (i)  and (iii) 
D)  (i) , (ii)  and (iii) E) C) and D)
F) A) and C)

Question 10

An important determinant of labour productivity is the:

Accepted Answer

A)  amount of technological knowledge available to workers
B)  market for the final product produced by labour
C)  level of minimum wage
D)  elasticity of labour supplyE) All of the above
F) C) and D)

Question 11

The quantity available of one factor of production can affect the marginal product of other factors.

Accepted Answer

A) True 
 B)False

Question 12

Suppose that an incredibly delusional Australian government decides that not enough people watch daytime TV and, as a result, passes legislation requiring all employers to fire 20% of their workforce, making them sit at home and watch television all day.The effect of such a policy will:

Accepted Answer

A)  increase the average productivity of labour
B)  shift the labour supply curve right
C)  shift the labour demand curve to the right
D)  lead to a fall in wagesE) None of the above
F) All of the above

Question 13

The South African government started to patrol the border and had a policy of returning all refugees to Zimbabwe.This policy would:

Accepted Answer

A)  increase the supply of Zimbabwean labour
B)  increase the demand for Zimbabwean labour
C)  decrease the demand for Zimbabwean labour
D)  prevent an increase in the supply of Zimbabwean labourE) B) and D)
F) B) and C)

Question 14

The relationship between labour productivity and wages is that if:

Accepted Answer

A)  wages rise then labour productivity will rise
B)  labour productivity falls then wages will rise
C)  labour productivity rises then wages will rise
D)  none of the aboveE) A) and D)
F) None of the above

Question 15

Refer to the information provided.Suppose the price of fresh tuna suddenly increases, Gertrude is likely to react by:

Accepted Answer

A)  becoming a seller in the factor market
B)  hiring less crew workers
C)  increasing her demand for crew workers
D)  trying to decrease her catch to preserve fish stocksE) B) and C)
F) B) and D)

Question 16

The marginal product of any factor of production depends on:

Accepted Answer

A)  the price of the final good
B)  the demand for the final good
C)  the quantity of the factor used
D)  all of the aboveE) None of the above
F) A) and B)

Question 17

When a petrol station sells petrol, which of the following would qualify as capital?
(i)  the service attendants' time
(ii)  the physical space on which the station exists
(iii)  the petrol tanks and pumps

Accepted Answer

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

Question 18

What are the three most important factors of production?

Accepted Answer

A)  land, labour and profit
B)  labour, wages and interest
C)  land, labour and capital
D)  capital, wages and profitE) A) and B)
F) B) and C)

Question 19

For any given quantity of labour, an increase in price will cause the marginal product of labour to increase.

Accepted Answer

A) True 
 B)False

Question 20

In a competitive labour market, wages will adjust to equal the marginal product of labour.

Accepted Answer

A) True 
 B)False

Exam 19: The Markets for the Factors of Production

Suppose that an incredibly delusional Australian government decides that not enough people watch daytime TV and, as a result, passes legislation requiring all employers to fire 20% of their workforce, making them sit at home and watch television all day.The effect of such a policy will:

Correct Answer
verified

For any given quantity of labour, an increase in price will cause the marginal product of labour to increase.

Correct Answer
verified

The relationship between labour productivity and wages is that if:

Correct Answer
verified

When a petrol station sells petrol, which of the following would qualify as capital? (i) the service attendants' time (ii) the physical space on which the station exists (iii) the petrol tanks and pumps

Correct Answer
verified

The purchase price of capital is:

Correct Answer
verified

The marginal product of any factor of production depends on:

Correct Answer
verified

According to the information provided, if Gertrude is a price taker in the crew market she has only to decide:

Correct Answer
verified

The South African government started to patrol the border and had a policy of returning all refugees to Zimbabwe.This policy would:

Correct Answer
verified

An important determinant of labour productivity is the:

Correct Answer
verified

Suppose a massive influenza outbreak wipes out 30% of Australia's workforce.Beside the human tragedy, the effect of the outbreak on the remaining workers would be to:

Correct Answer
verified

The Luddite revolt:

Correct Answer
verified

Graph 18-1 This graph represents the value of marginal product for a firm that sells its product in a competitive market.Use the graph to answer the following question(s) . -Refer to Graph 18-1.To maximise profit, a firm would hire labour at a level:

Correct Answer
verified

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

Correct Answer
verified

What are the three most important factors of production?

Correct Answer
verified

The quantity available of one factor of production can affect the marginal product of other factors.

Correct Answer
verified

In a competitive labour market, wages will adjust to equal the marginal product of labour.

Correct Answer
verified

Correct Answer
verified

Identify the conditions where the labour demand curve will shift? (i) there is a change in productivity (ii) there is a change in output prices (iii) there is a change in wage levels

Correct Answer
verified

Refer to the information provided.Suppose the price of fresh tuna suddenly increases, Gertrude is likely to react by:

Correct Answer
verified

When a firm decides to retain its earnings instead of pay dividends, the shareholders are not being rewarded.

Correct Answer
verified

Exam 19: The Markets for the Factors of Production

Suppose that an incredibly delusional Australian government decides that not enough people watch daytime TV and, as a result, passes legislation requiring all employers to fire 20% of their workforce, making them sit at home and watch television all day.The effect of such a policy will:

Correct AnswerverifiedShow Answer

For any given quantity of labour, an increase in price will cause the marginal product of labour to increase.

Correct AnswerverifiedShow Answer

The relationship between labour productivity and wages is that if:

Correct AnswerverifiedShow Answer

When a petrol station sells petrol, which of the following would qualify as capital? (i) the service attendants' time (ii) the physical space on which the station exists (iii) the petrol tanks and pumps

Correct AnswerverifiedShow Answer

The purchase price of capital is:

Correct AnswerverifiedShow Answer

The marginal product of any factor of production depends on:

Correct AnswerverifiedShow Answer

According to the information provided, if Gertrude is a price taker in the crew market she has only to decide:

Correct AnswerverifiedShow Answer

The South African government started to patrol the border and had a policy of returning all refugees to Zimbabwe.This policy would:

Correct AnswerverifiedShow Answer

An important determinant of labour productivity is the:

Correct AnswerverifiedShow Answer

Suppose a massive influenza outbreak wipes out 30% of Australia's workforce.Beside the human tragedy, the effect of the outbreak on the remaining workers would be to:

Correct AnswerverifiedShow Answer

The Luddite revolt:

Correct AnswerverifiedShow Answer

Graph 18-1 This graph represents the value of marginal product for a firm that sells its product in a competitive market.Use the graph to answer the following question(s) . -Refer to Graph 18-1.To maximise profit, a firm would hire labour at a level:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What are the three most important factors of production?

Correct AnswerverifiedShow Answer

The quantity available of one factor of production can affect the marginal product of other factors.

Correct AnswerverifiedShow Answer

In a competitive labour market, wages will adjust to equal the marginal product of labour.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Identify the conditions where the labour demand curve will shift? (i) there is a change in productivity (ii) there is a change in output prices (iii) there is a change in wage levels

Correct AnswerverifiedShow Answer

Refer to the information provided.Suppose the price of fresh tuna suddenly increases, Gertrude is likely to react by:

Correct AnswerverifiedShow Answer

When a firm decides to retain its earnings instead of pay dividends, the shareholders are not being rewarded.

Correct AnswerverifiedShow Answer

Correct Answer
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