Question 1

Suppose medical research provides evidence that eating bananas provides far greater health benefits than was previously thought. The resulting increase in the demand for bananas

Accepted Answer

A)   increases the marginal product of banana pickers for any given number of banana pickers.
B)   increases the value of the marginal product of banana pickers for any given number of banana pickers.
C)   increases the supply of banana pickers.
D)   All of the above are correct.

Question 2

The basic tools of supply and demand apply to

Accepted Answer

A)   both markets for goods and services and markets for labor services.
B)   markets for goods and services but not to markets for labor services.
C)   markets for goods and services but not to markets for factors of production.
D)   all markets except those in which demand is derived demand.

Question 3

Scenario 18-4
In 1997, Albania experienced a civil war. The civil unrest sent thousands of refugees across the Adriatic Sea to Italy where they sought relief from the fighting.
-Refer to Scenario 18-4. The Italian government started to patrol the Adriatic Sea and had a policy of returning all refugees to Albania. This policy would contribute to

Accepted Answer

A)   an increase in the supply of labor in Italy.
B)   an increase in the demand labor in Italy.
C)   a decrease in the demand for labor in Italy.
D)   preventing an increase in the supply of labor in Italy.

Question 4

In economics, the term capital refers to

Accepted Answer

A)   money.
B)   stocks and bonds.
C)   equipment and structures used in production.
D)   All of the above are correct.

Question 5

Assume the market for handkerchiefs is competitive. A new invention leads to labor-augmenting technological progress in the production of handkerchiefs. This development

Accepted Answer

A)   decreases the demand for workers who make handkerchiefs and decreases their equilibrium wage.
B)   increases the demand for workers who make handkerchiefs and increases their equilibrium wage.
C)   increases the supply of workers who make handkerchiefs and decreases their equilibrium wage.
D)   increases the supply of workers who make handkerchiefs and increases their equilibrium wage.

Question 6

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

Accepted Answer

A)   Firm A
B)   Firm B
C)   Firm C
D)   Firm D

Question 7

The Black Death in fourteenth-century Europe resulted in

Accepted Answer

A)   a lower marginal product of labor of surviving workers.
B)   a higher marginal product of labor of surviving workers.
C)   economic hardship for surviving peasants.
D)   economic prosperity for surviving landowners.

Question 8

Which of the following qualify as part of our economy's capital income?

Accepted Answer

A)   wages paid to workers
B)   interest paid to the owners of corporate bonds
C)   rent paid on farmland
D)   All of the above are correct.

Question 9

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following events can cause the labor-supply curve to shift?

Accepted Answer

A)   an increase in the wage rate
B)   an increase in the price of output
C)   an increase in the rate of immigration
D)   a technological advance

Question 11

Which of the following would shift a market labor supply curve to the left?

Accepted Answer

A)   an increase in the wage paid to workers in a competing market
B)   labor-saving technology
C)   a change in worker tastes so that workers want to retire later
D)   an increase in immigration

Question 12

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.

Question 13

Which of the following best describes the economy's stock of equipment and structures?

Accepted Answer

A)   capital
B)   aggregate demand
C)   long-term inventory
D)   aggregate stock

Question 14

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. If the shop charges $120 per repair and pays each of its mechanics a wage of $400 per day, then what is the marginal profit of the third mechanic?

Accepted Answer

The marginal product of the third mechan...

Question 15

Consider the labor market for computer programmers. Because of the dot.com boom in the late 1990s, a lot of workers went to school to learn how to write computer code for one of thousands of new dot.com companies. However, when these computer programming students graduated the dot.com bust took place. The dot.com bust decreased the value of the marginal product of computer programmers. Holding all else equal what effect did these two circumstances have on the equilibrium quantity in the labor market for computer programmers?

Accepted Answer

A)   The equilibrium quantity of labor increased.
B)   The equilibrium quantity of labor decreased.
C)   The equilibrium quantity of labor did not change.
D)   It is not possible to determine what happens to the equilibrium quantity of labor.

Question 16

Which of the following would shift a market labor supply curve to the right?

Accepted Answer

A)   an increase in the price of output
B)   an increase in immigration
C)   a labor-saving technological change
D)   a decrease in the wage rate

Question 17

If the wages of a CPA decrease, (i)  her opportunity cost of leisure increases.
(ii)  her opportunity cost of leisure decreases.
(iii)  her hours of labor supply may increase.
(iv)  her hours of labor supply may decrease.

Accepted Answer

A)   (i)  and (iii)  only
B)   (ii)  and (iv)  only
C)   (i) , (iii) , and (iv)  only
D)   (ii) , (iii) , and (iv)  only

Question 18

Which of the following is an example of a firm's derived demand?

Accepted Answer

A)   Workers with higher levels of education earn more, on average, than workers with lower levels of education.
B)   Factors that decrease the demand for labor will decrease the equilibrium wage.
C)   A tractor manufacturer's demand for assembly­line workers is inseparably linked to the supply of tractors.
D)   All of the above are correct.

Question 19

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

Accepted Answer

A)   increasing.
B)   constant.
C)   decreasing.
D)   negative.

Question 20

Consider the market for university economics professors. Suppose the opportunity cost of going to graduate school to get a Ph.D. in economics increases for many individuals. Suppose it generally takes about five years to get a Ph.D. in economics. Holding all else constant, in five years the equilibrium quantity of university economics professors will

Accepted Answer

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

Exam 18: The Markets for the Factors of Production

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

Correct Answer
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Which of the following events can cause the labor-supply curve to shift?

Correct Answer
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Which of the following qualify as part of our economy's capital income?

Correct Answer
verified

Which of the following is an example of a firm's derived demand?

Correct Answer
verified

Correct Answer
verified

The basic tools of supply and demand apply to

Correct Answer
verified

Which of the following would shift a market labor supply curve to the right?

Correct Answer
verified

In economics, the term capital refers to

Correct Answer
verified

The Black Death in fourteenth-century Europe resulted in

Correct Answer
verified

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Correct Answer
verified

Correct Answer
verified

Correct Answer
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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 Answer
verified

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

Correct Answer
verified

Assume the market for handkerchiefs is competitive. A new invention leads to labor-augmenting technological progress in the production of handkerchiefs. This development

Correct Answer
verified

Suppose medical research provides evidence that eating bananas provides far greater health benefits than was previously thought. The resulting increase in the demand for bananas

Correct Answer
verified

Which of the following would shift a market labor supply curve to the left?

Correct Answer
verified

Which of the following best describes the economy's stock of equipment and structures?

Correct Answer
verified

Correct Answer
verified
The marginal product of the third mechan...
View Answer

If the wages of a CPA decrease, (i) her opportunity cost of leisure increases. (ii) her opportunity cost of leisure decreases. (iii) her hours of labor supply may increase. (iv) her hours of labor supply may decrease.

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

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

Correct AnswerverifiedShow Answer

Which of the following events can cause the labor-supply curve to shift?

Correct AnswerverifiedShow Answer

Which of the following qualify as part of our economy's capital income?

Correct AnswerverifiedShow Answer

Which of the following is an example of a firm's derived demand?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The basic tools of supply and demand apply to

Correct AnswerverifiedShow Answer

Which of the following would shift a market labor supply curve to the right?

Correct AnswerverifiedShow Answer

In economics, the term capital refers to

Correct AnswerverifiedShow Answer

The Black Death in fourteenth-century Europe resulted in

Correct AnswerverifiedShow Answer

A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

Assume the market for handkerchiefs is competitive. A new invention leads to labor-augmenting technological progress in the production of handkerchiefs. This development

Correct AnswerverifiedShow Answer

Suppose medical research provides evidence that eating bananas provides far greater health benefits than was previously thought. The resulting increase in the demand for bananas

Correct AnswerverifiedShow Answer

Which of the following would shift a market labor supply curve to the left?

Correct AnswerverifiedShow Answer

Which of the following best describes the economy's stock of equipment and structures?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe marginal product of the third mechan...View AnswerShow Answer

If the wages of a CPA decrease, (i) her opportunity cost of leisure increases. (ii) her opportunity cost of leisure decreases. (iii) her hours of labor supply may increase. (iv) her hours of labor supply may decrease.

Correct AnswerverifiedShow Answer

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The marginal product of the third mechan...
View Answer

Correct Answer
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