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Exam 18: The Markets for the Factors of Production

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Question 191

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Consider the market for capital equipment. Suppose the value of the marginal product of capital equipment increases. Holding all else constant, the equilibrium quantity of capital equipment will

A) increase.
B) decrease.
C) not change.
D) It is not possible to determine what will happen to the equilibrium quantity of capital equipment.

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

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Question 192

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Scenario 18-3 Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $13 per hour. During the summer, he drives a tour bus around the ski resort, earning $11 per hour. -Refer to Scenario 18-3. Assume that Sam has an upward-sloping labor supply curve. If the opportunity cost of Sam's leisure time increases, he will respond by working

A) more hours.
B) fewer hours.
C) an equal number of hours.
D) a number of hours that cannot be determined from the information. The labor demand curve is needed to make this determination.

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

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Question 193

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Ellen receives a raise at her current part-time job from $8 to $10 per hour. If her labor supply curve is upward sloping, she will work fewer hours after receiving the pay raise.

Figure 18-12. 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 18-12. What is the marginal product of the third mechanic?

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. What is the marginal product of the fifth unit of labor?

Figure 18-9 -Refer to Figure 18-9. If the apple pickers start working fewer hours because they are taking more vacation time, the equilibrium wage will

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

Explain how a firm values the contribution of workers to its profitability. Would a profit-maximizing competitive firm ever stop increasing employment as long as marginal product is rising? Explain your answer.

When a production function exhibits a diminishing, but positive, marginal product of labor,

Suppose a shift of the demand curve for strawberry pickers causes the equilibrium wage of strawberry pickers to increase by $2. The price of strawberries is $3 per pound before and after the shift. Does the shift increase the marginal product of the last picker hired, or does it decrease it? What is the amount of the increase or decrease?

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

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

Table 18-7 -Refer to Table 18-7. To maximize its profit, how many workers will the firm hire?

Table 18-3 -Refer to Table 18-3. For Firm D, the marginal product of labor is

Who receives income from capital in the United States?

Labor markets are different from most other markets because labor demand is

A household member's decision about how much labor to supply is most closely linked to

Table 18-7 -Refer to Table 18-7. The fact that the marginal product falls as the number of workers increases illustrates a property called

Table 18-11 Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $2 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the marginal profit of the sixth worker?

The inputs used to produce goods and services are called