Question 1

If workers respond to an increase in the opportunity cost of leisure by taking more leisure,then their labor supply curve is

Accepted Answer

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

Question 2

To maximize profit,a competitive firm hires workers up to the point of intersection of the

Accepted Answer

A)   marginal product curve and the wage line.
B)   value of marginal product curve and the wage line.
C)   value of marginal product curve and the marginal revenue curve.
D)   total revenue curve and the wage line.E) All of the above
F) A) and B)

Question 3

Because of diminishing returns,a factor in abundant supply has

Accepted Answer

A)   a high marginal product and a high rental price.
B)   a high marginal product and a low rental price.
C)   a low marginal product and a high rental price.
D)   a low marginal product and a low rental price.E) A) and B)
F) A) and C)

Question 4

A sandwich shop hires workers to make sandwiches and sell them to customers.If the firm is competitive in both the market for sandwiches and in the market for sandwich-makers,then it has

Accepted Answer

A)   some control over both the price of sandwiches and the wage it pays to its workers.
B)   no control over the price of sandwiches but some control over the wage it pays to its workers.
C)   some control over the price of sandwiches but no control over the wage it pays to its workers.
D)   no control over either the price of sandwiches or the wage it pays to its workers.E) A) and B)
F) A) and D)

Question 5

The opportunity cost of leisure is impossible to measure,since we can't measure leisure time in dollars.

Accepted Answer

A) True 
 B)False

Question 6

Competitive firms decide how much output to sell by producing output until the price of the good equals

Accepted Answer

A)   marginal product.
B)   the value of marginal product.
C)   marginal cost.
D)   marginal profit.E) All of the above
F) B) and C)

Question 7

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 figure illustrates the

Accepted Answer

A)   demand for labor.
B)   supply of labor.
C)   production function.
D)   wage function.E) All of the above
F) C) and D)

Question 8

Economists refer to the inputs that firms use to produce goods and services as

Accepted Answer

A)   derived factors.
B)   derived resources.
C)   factors of production.
D)   instruments of revenue.E) A) and D)
F) A) and C)

Question 9

Firms pay out a portion of their earnings in the form of interest and dividends,and those payments are a portion of the economy's capital income.

Accepted Answer

A) True 
 B)False

Question 10

Suppose that the market for labor is initially in equilibrium.A decrease in the price of output will cause

Accepted Answer

A)   the equilibrium wage and the quantity of labor to both rise.
B)   the equilibrium wage and the quantity of labor to both fall.
C)   the equilibrium wage to rise and the quantity of labor to fall.
D)   the equilibrium wage to fall and the quantity of labor to rise.E) B) and D)
F) A) and D)

Question 11

The value of the marginal product is

Accepted Answer

A)   total revenue minus total cost.
B)   the change in total output divided by the change in an input.
C)   the marginal product of an input times the price of the output.
D)   total output divided by total inputs.E) B) and D)
F) None of the above

Question 12

Factor-market analysis could not be complete without some characterization of

Accepted Answer

A)   product-market demand.
B)   the marginal productivities of the different factors.
C)   market prices for final goods and services.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 13

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

Accepted Answer

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

Question 14

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

Accepted Answer

A)   $600
B)   $500
C)   $400
D)   $300E) A) and B)
F) A) and C)

Question 15

The labor supply curve shifts when

Accepted Answer

A)   employers need to hire more people.
B)   employers develop new technology.
C)   workers change the number of hours that they want to work at any given wage.
D)   workers become more productive.E) None of the above
F) B) and C)

Question 16

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

Question 17

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 land.
C)   economic hardship for surviving peasants.
D)   economic hardship for surviving landowners.E) B) and C)
F) A) and D)

Question 18

The labor supply curve reflects how

Accepted Answer

A)   workers' decisions about the labor-leisure tradeoff respond to a change in the wage.
B)   workers' decisions about the opportunity cost of labor respond to a change in the quantity of labor supplied.
C)   firms' decisions about the labor-leisure tradeoff respond to the quantity of labor demanded.
D)   firms' decisions about how the quantity of labor they hire respond to changes in their opportunities to earn profits.E) B) and C)
F) None of the above

Question 19

Table 18-8
 
-Refer to Table 18-8.Suppose that the firm pays its workers $45 per day.Each unit of output sells for $10.How many days of labor should the firm hire?

Accepted Answer

A)   1
B)   2
C)   3
D)   4E) A) and D)
F) A) and B)

Question 20

The Black Death in fourteenth-century Europe resulted in

Accepted Answer

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

Exam 18: The Markets for the Factors of Production

Firms pay out a portion of their earnings in the form of interest and dividends,and those payments are a portion of the economy's capital income.

Correct AnswerverifiedShow Answer

The opportunity cost of leisure is impossible to measure,since we can't measure leisure time in dollars.

Correct AnswerverifiedShow Answer

A sandwich shop hires workers to make sandwiches and sell them to customers.If the firm is competitive in both the market for sandwiches and in the market for sandwich-makers,then it has

Correct AnswerverifiedShow Answer

The Black Death in fourteenth-century Europe resulted in

Correct AnswerverifiedShow Answer

The value of the marginal product is

Correct AnswerverifiedShow Answer

The Black Death in fourteenth-century Europe resulted in

Correct AnswerverifiedShow Answer

If workers respond to an increase in the opportunity cost of leisure by taking more leisure,then their labor supply curve is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Competitive firms decide how much output to sell by producing output until the price of the good equals

Correct AnswerverifiedShow Answer

The labor supply curve shifts when

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 figure illustrates the

Correct AnswerverifiedShow Answer

Factor-market analysis could not be complete without some characterization of

Correct AnswerverifiedShow Answer

Economists refer to the inputs that firms use to produce goods and services as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 18-8 -Refer to Table 18-8.Suppose that the firm pays its workers $45 per day.Each unit of output sells for $10.How many days of labor should the firm hire?

Correct AnswerverifiedShow Answer

Because of diminishing returns,a factor in abundant supply has

Correct AnswerverifiedShow Answer

Suppose that the market for labor is initially in equilibrium.A decrease in the price of output will cause

Correct AnswerverifiedShow Answer

The labor supply curve reflects how

Correct AnswerverifiedShow Answer

To maximize profit,a competitive firm hires workers up to the point of intersection of the

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified