Question 1

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

Accepted Answer

A)   -$300
B)   -$200
C)   -$100
D)   $0E) A) and D)
F) B) and C)

Question 2

If the demand for labor in a particular industry increases,the equilibrium wage in that industry will also increase.

Accepted Answer

A) True 
 B)False

Question 3

The labor-supply curve is affected by the trade-off between labor and leisure.

Accepted Answer

A) True 
 B)False

Question 4

If men's preferences for work change such that more men want to be stay-at-home fathers,the wages paid to men who remain in the workplace would rise,all else equal.

Accepted Answer

A) True 
 B)False

Question 5

A Luddite would be expected to oppose

Accepted Answer

A)   working more than eight hours per day.
B)   technological advance.
C)   national policies that limit immigration into the country.
D)   the use of economic models to demonstrate market equilibrium.E) A) and C)
F) None of the above

Question 6

An event that changes the supply of any factor of production can alter the earnings of all the factors.

Accepted Answer

A) True 
 B)False

Question 7

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 C)
F) A) and C)

Question 8

Figure 18-6
 
-Refer to Figure 18-6.The graph above illustrates the market for bakers who make homemade breads and breakfast pastries.If the wages paid to wedding cake bakers increase,what happens in the market for bread bakers?

Accepted Answer

A)   Demand increases from D1 to D2.
B)   Demand decreases from D2 to D1.
C)   Supply increases from S1 to S2.
D)   Supply decreases from S2 to S1.E) A) and B)
F) None of the above

Question 9

What causes the labor demand curve to shift?
(i) changes in productivity
(ii) changes in wages
(iii) changes in output prices

Accepted Answer

A)   (i)  and (ii) 
B)   (ii)  and (iii) 
C)   (i)  and (iii) 
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 10

Suppose that the labor market for life guards is initially in equilibrium.Whistles are an important safety tool that life guards use as a part of their jobs.A fire destroys the largest factory that produces whistles.What happens to the equilibrium wage and quantity of life guards?

Accepted Answer

A)   Both the equilibrium wage and quantity increase.
B)   Both the equilibrium wage and quantity decrease.
C)   The equilibrium wage increases, and the equilibrium quantity decreases.
D)   The equilibrium wage decreases, and the equilibrium quantity increases.E) A) and B)
F) A) and C)

Question 11

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

Accepted Answer

A)   7
B)   8
C)   25
D)   75E) B) and D)
F) A) and B)

Question 12

Table 18-4
 
-Refer to Table 18-4.The price of output is

Accepted Answer

A)   $1.
B)   $2.
C)   $3.
D)   $400.E) None of the above
F) A) and B)

Question 13

Among the people who are characterized below,who has the highest opportunity cost of leisure?

Accepted Answer

A)   an attorney who earns $200 per hour and who plays golf during her leisure time
B)   a medical doctor who earns $210 per hour and who sleeps during his leisure time
C)   a retail clerk who earns $15 per hour and who watches TV during her leisure time
D)   a waiter who earns $12 per hour and who reads poetry during his leisure timeE) B) and C)
F) C) and D)

Question 14

When the wages paid to government economists increase,the labor supply curve for academic economists

Accepted Answer

A)   shifts to the left.
B)   shifts to the right.
C)   will become backward-sloping.
D)   will not change.E) A) and D)
F) C) and D)

Question 15

Figure 18-6
 
-Refer to Figure 18-6.The graph above illustrates the market for bakers who make homemade breads and breakfast pastries.If the bakery profession becomes more attractive to young women and men because of a new reality television show,what happens in the market for bakers?

Accepted Answer

A)   Demand increases from D1 to D2.
B)   Demand decreases from D2 to D1.
C)   Supply increases from S1 to S2.
D)   Supply decreases from S2 to S1.E) None of the above
F) A) and B)

Question 16

Describe the difference between the purchase price of capital and the rental price of capital.If you know the value of marginal product from the flow of capital services,how would you determine the market price for the capital stock?

Accepted Answer

The purchase price of capital is a refle...

Question 17

We observe a profit-maximizing firm hiring its 51st employee.It is possible to infer that,when 50 employees are hired,the

Accepted Answer

A)   wage exceeds the value of the marginal product of labor.
B)   value of the marginal product of labor exceeds the wage.
C)   marginal product of labor is increasing.
D)   firm is attempting to increase its market share.E) None of the above
F) B) and C)

Question 18

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

Accepted Answer

A)   The labor supply will stay unchanged until the wages paid to pear pickers change.
B)   The labor supply will decrease.
C)   The labor supply will increase.
D)   The labor supply may fall or rise, depending on the price of pears.E) B) and C)
F) A) and B)

Question 19

Figure 18-10
 
-Refer to Figure 18-10.When the relevant labor demand curve is D₁ and the labor market is in equilibrium,

Accepted Answer

A)   the value of the marginal product of labor to firms is less than W1.
B)   the opportunity cost of leisure to workers is greater than W1.
C)   the wage is W1.
D)   All of the above are correct.E) C) and D)
F) All of the above

Question 20

The equilibrium rental income paid to landowners at any point in time equals the

Accepted Answer

A)   purchase price of land.
B)   value of the marginal product of land.
C)   marginal product of land.
D)   wage paid to laborers.E) None of the above
F) A) and B)

Exam 18: The Market For the Factors of Production.

Suppose that the labor market for life guards is initially in equilibrium.Whistles are an important safety tool that life guards use as a part of their jobs.A fire destroys the largest factory that produces whistles.What happens to the equilibrium wage and quantity of life guards?

Correct AnswerverifiedShow Answer

What causes the labor demand curve to shift? (i) changes in productivity (ii) changes in wages (iii) changes in output prices

Correct AnswerverifiedShow Answer

A Luddite would be expected to oppose

Correct AnswerverifiedShow Answer

We observe a profit-maximizing firm hiring its 51st employee.It is possible to infer that,when 50 employees are hired,the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Describe the difference between the purchase price of capital and the rental price of capital.If you know the value of marginal product from the flow of capital services,how would you determine the market price for the capital stock?

Correct AnswerverifiedThe purchase price of capital is a refle...View AnswerShow Answer

The equilibrium rental income paid to landowners at any point in time equals the

Correct AnswerverifiedShow Answer

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

Correct AnswerverifiedShow Answer

Figure 18-6 -Refer to Figure 18-6.The graph above illustrates the market for bakers who make homemade breads and breakfast pastries.If the bakery profession becomes more attractive to young women and men because of a new reality television show,what happens in the market for bakers?

Correct AnswerverifiedShow Answer

The labor-supply curve is affected by the trade-off between labor and leisure.

Correct AnswerverifiedShow Answer

When the wages paid to government economists increase,the labor supply curve for academic economists

Correct AnswerverifiedShow Answer

If the demand for labor in a particular industry increases,the equilibrium wage in that industry will also increase.

Correct AnswerverifiedShow Answer

Figure 18-6 -Refer to Figure 18-6.The graph above illustrates the market for bakers who make homemade breads and breakfast pastries.If the wages paid to wedding cake bakers increase,what happens in the market for bread bakers?

Correct AnswerverifiedShow Answer

An event that changes the supply of any factor of production can alter the earnings of all the factors.

Correct AnswerverifiedShow Answer

Among the people who are characterized below,who has the highest opportunity cost of leisure?

Correct AnswerverifiedShow Answer

Table 18-4 -Refer to Table 18-4.The price of output is

Correct AnswerverifiedShow Answer

If men's preferences for work change such that more men want to be stay-at-home fathers,the wages paid to men who remain in the workplace would rise,all else equal.

Correct AnswerverifiedShow Answer

Figure 18-10 -Refer to Figure 18-10.When the relevant labor demand curve is D₁ and the labor market is in equilibrium,

Correct AnswerverifiedShow Answer

Table 18-1 -Refer to Table 18-1.What is 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

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The purchase price of capital is a refle...
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