Question 1

Figure 18-2
The figure below shows the production function for a particular firm. 
-Refer to Figure 18-2. Suppose the firm pays a wage equal to $160 per unit of labor and sells its output at $10 per unit. How many units of labor should the firm hire to maximize profit?

Accepted Answer

A)   2 units
B)   3 units
C)   4 units
D)   5 unitsE) B) and D)
F) B) and C)

Question 2

Table 18-7 
-Refer to Table 18-7. What is the value for the cell labeled BB?

Accepted Answer

A)   80 units
B)   100 units
C)   180 units
D)   200 unitsE) B) and D)
F) All of the above

Question 3

Figure 18-1
On the graph, L represents the quantity of labor and Q represents the quantity of output per week. 
-Refer to Figure 18-1. The marginal product of the second worker is

Accepted Answer

A)   90 units of output.
B)   105 units of output.
C)   210 units of output.
D)   330 units of output.E) B) and C)
F) A) and C)

Question 4

Suppose that a toxic waste spill renders half of the land in New Jersey uninhabitable. Assuming that land and labor are complements in the production function, what would happen to the wages earned by workers and rents earned by landowners?

Accepted Answer

A)   Both wages and rents would increase.
B)   Both wages and rents would decrease.
C)   Wages would increase, and rents would decrease.
D)   Wages would decrease, and rents would increase.E) All of the above
F) C) and D)

Question 5

Land, labor, and capital are examples of factors of production.

Accepted Answer

A) True 
 B)False

Question 6

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.E) A) and B)
F) A) and D)

Question 7

Which of the following events would shift a labor supply curve?

Accepted Answer

A)   (i)  and (iii)  only
B)   (ii)  and (iii)  only
C)   (iii)  only
D)   (i) , (ii) , and (iii) E) All of the above
F) A) and B)

Question 8

Diane's Auto World installs tires on automobiles, light trucks, and sport utility vehicles. She is a profit-maximizing business owner whose firm operates in a competitive market. The marginal cost of installing a tire is $20. The marginal productivity of the last worker that Diane hired was 2 tires per hour. What is the maximum hourly wage that Diane was willing to pay the last worker hired?

Accepted Answer

A)   $10
B)   $20
C)   $40
D)   There is insufficient information to answer this question.E) B) and C)
F) A) and D)

Question 9

Figure 18-9 
-Refer to Figure 18-9. If the price of apples increases, the

Accepted Answer

A)   demand for apple pickers will shift to the left.
B)   demand for apple pickers will shift to the right.
C)   supply of apple pickers will shift to the left.
D)   supply of apple pickers will shift to the right.E) None of the above
F) All of the above

Question 10

If a worker respond to an increase in the opportunity cost of leisure by taking less leisure, then his labor supply curve is

Accepted Answer

A)   horizontal.
B)   vertical.
C)   backward sloping.
D)   upward sloping.E) A) and B)
F) A) and D)

Question 11

If the value of the marginal product of labor exceeds the wage, then hiring another worker increases the firm's

Accepted Answer

A)   profit.
B)   total cost.
C)   total revenue.
D)   All of the above are correct.E) B) and D)
F) B) and C)

Question 12

In 2012, the total income of all U.S. residents was approximately $15 trillion.

Accepted Answer

A) True 
 B)False

Question 13

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 Albanian civil war probably affected Italian labor markets by causing

Accepted Answer

A)   total employment in Italy to decrease.
B)   wages in Italy to increase.
C)   the marginal product of labor in Italy to decrease.
D)   All of the above are correct.E) C) and D)
F) B) and C)

Question 14

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, the equilibrium wage of health care employees would

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   It is not possible to determine what happens to the equilibrium wage.E) B) and D)
F) A) and C)

Question 15

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) B) and C)
F) C) and D)

Question 16

Figure 18-10 
-Refer to Figure 18-10. If the relevant labor demand curve is D2 and the current wage is W1,

Accepted Answer

A)   there is a surplus of labor.
B)   there is a shortage of labor.
C)   the quantity of labor supplied exceeds the quantity of labor demanded.
D)   workers are failing to take into account the work-leisure tradeoff in deciding what quantity of labor to supply at alternative wages.E) A) and B)
F) A) and C)

Question 17

In 2012, the total income of all U.S. residents was approximately $120 billion.

Accepted Answer

A) True 
 B)False

Question 18

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, the equilibrium quantity of health care employees would

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   It is not possible to determine what happens to the equilibrium quantity.E) C) and D)
F) B) and D)

Question 19

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. If Sam takes fewer hours of leisure in the winter than in the summer, we can assume that his labor supply curve for the range of earnings in this example

Accepted Answer

A)   is horizontal.
B)   is vertical.
C)   is upward sloping.
D)   has a backward-sloping portion.E) B) and C)
F) A) and D)

Question 20

Consider the labor market for short-order cooks. A shortage in the availability of frying pans will cause

Accepted Answer

A)   both equilibrium wages and equilibrium employment to increase.
B)   both equilibrium wages and equilibrium employment to decrease.
C)   equilibrium wages to increase and equilibrium employment to decrease.
D)   equilibrium wages to decrease and equilibrium employment to increase.E) A) and B)
F) C) and D)

Exam 18: The Markets for the Factors of Production

Consider the labor market for short-order cooks. A shortage in the availability of frying pans will cause

Correct Answer
verified

In 2012, the total income of all U.S. residents was approximately $120 billion.

Correct Answer
verified

The basic tools of supply and demand apply to

Correct Answer
verified

Land, labor, and capital are examples of factors of production.

Correct Answer
verified

If a worker respond to an increase in the opportunity cost of leisure by taking less leisure, then his labor supply curve is

Correct Answer
verified

Figure 18-10 -Refer to Figure 18-10. If the relevant labor demand curve is D2 and the current wage is W1,

Correct Answer
verified

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. Suppose the firm pays a wage equal to $160 per unit of labor and sells its output at $10 per unit. How many units of labor should the firm hire to maximize profit?

Correct Answer
verified

In 2012, the total income of all U.S. residents was approximately $15 trillion.

Correct Answer
verified

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, the equilibrium quantity of health care employees would

Correct Answer
verified

Which of the following events would shift a labor supply curve?

Correct Answer
verified

Figure 18-9 -Refer to Figure 18-9. If the price of apples increases, the

Correct Answer
verified

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 Albanian civil war probably affected Italian labor markets by causing

Correct Answer
verified

Table 18-7 -Refer to Table 18-7. What is the value for the cell labeled BB?

Correct Answer
verified

Figure 18-1 On the graph, L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1. The marginal product of the second worker is

Correct Answer
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Correct Answer
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Correct Answer
verified

Suppose that a toxic waste spill renders half of the land in New Jersey uninhabitable. Assuming that land and labor are complements in the production function, what would happen to the wages earned by workers and rents earned by landowners?

Correct Answer
verified

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

Correct Answer
verified

If the value of the marginal product of labor exceeds the wage, then hiring another worker increases the firm's

Correct Answer
verified

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, the equilibrium wage of health care employees would

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

Consider the labor market for short-order cooks. A shortage in the availability of frying pans will cause

Correct AnswerverifiedShow Answer

In 2012, the total income of all U.S. residents was approximately $120 billion.

Correct AnswerverifiedShow Answer

The basic tools of supply and demand apply to

Correct AnswerverifiedShow Answer

Land, labor, and capital are examples of factors of production.

Correct AnswerverifiedShow Answer

If a worker respond to an increase in the opportunity cost of leisure by taking less leisure, then his labor supply curve is

Correct AnswerverifiedShow Answer

Figure 18-10 -Refer to Figure 18-10. If the relevant labor demand curve is D2 and the current wage is W1,

Correct AnswerverifiedShow Answer

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. Suppose the firm pays a wage equal to $160 per unit of labor and sells its output at $10 per unit. How many units of labor should the firm hire to maximize profit?

Correct AnswerverifiedShow Answer

In 2012, the total income of all U.S. residents was approximately $15 trillion.

Correct AnswerverifiedShow Answer

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, the equilibrium quantity of health care employees would

Correct AnswerverifiedShow Answer

Which of the following events would shift a labor supply curve?

Correct AnswerverifiedShow Answer

Figure 18-9 -Refer to Figure 18-9. If the price of apples increases, the

Correct AnswerverifiedShow Answer

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 Albanian civil war probably affected Italian labor markets by causing

Correct AnswerverifiedShow Answer

Table 18-7 -Refer to Table 18-7. What is the value for the cell labeled BB?

Correct AnswerverifiedShow Answer

Figure 18-1 On the graph, L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1. The marginal product of the second worker is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that a toxic waste spill renders half of the land in New Jersey uninhabitable. Assuming that land and labor are complements in the production function, what would happen to the wages earned by workers and rents earned by landowners?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the value of the marginal product of labor exceeds the wage, then hiring another worker increases the firm's

Correct AnswerverifiedShow Answer

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, the equilibrium wage of health care employees would

Correct AnswerverifiedShow Answer

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