Question 1

In economics,the term "leisure" refers to:

Accepted Answer

A)   nonwork activities that individuals enjoy doing.
B)   those activities that individuals enjoy doing.
C)   all nonwork activities.
D)   the vacation time on receives when working.E) None of the above
F) All of the above

Question 2

The factor of production called "capital" refers to:

Accepted Answer

A)   manufactured goods that are used to produce new goods.
B)   any piece of raw material that is used to produce goods and services.
C)   any input that's not a human being or dirt.
D)   the amount of money a firm has access in order to run its business.E) A) and B)
F) B) and C)

Question 3

In general,economists place all factors of production into which three categories?

Accepted Answer

A)   Land, labor, and capital
B)   Technology, land, and capital
C)   Land, labor, and technology
D)   Technology, labor, and capitalE) All of the above
F) C) and D)

Question 4

Markets that require workers with similar human capital:

Accepted Answer

A)   vie for the same workers, who can interchange one type of employment for another.
B)   often have similar wages, because they employ similar workers.
C)   are more connected than others.
D)   All of these statements are true.E) B) and D)
F) C) and D)

Question 5

We can expect producers to pay:

Accepted Answer

A)   None of these statements is true.
B)   more for land with lower productivity.
C)   less for land with higher productivity.
D)   less for land with lower productivity.E) None of the above
F) B) and D)

Question 6

If the price effect outweighs the income effect of a wage increase,the labor-supply curve will:

Accepted Answer

A)   slope downward.
B)   slope upward.
C)   be perfectly horizontal.
D)   be perfectly flat.E) B) and C)
F) A) and B)

Question 7

We think about the cost of supplying labor as the:

Accepted Answer

A)   opportunity cost of the individual's time.
B)   input costs that go into producing a unit of labor.
C)   average wage in the labor market.
D)   the additional equipment and training that is required when hiring a person.E) B) and C)
F) A) and D)

Question 8

Farming in poor countries is considered to be ___________ intensive because __________.

Accepted Answer

A)   labor; labor is typically relatively cheaper than machinery in poor countries
B)   capital; the labor used is concentrated, spread thinly across a lot of capital
C)   labor; the tools in poor countries are more plentiful than the people
D)   capital; the tools in poor countries are relatively cheaper than the cost of using people in poor countriesE) A) and D)
F) B) and D)

Question 9

Sadie works at a factory for $15 an hour and typically works 40 hours a week.Sadie gets a pay raise and now earns $20 an hour.She decides to work 45 hours a week at $20 an hour.Her response:

Accepted Answer

A)   tells us the price effect outweighed the income effect of her pay raise.
B)   implies her labor-supply curve is upward sloping.
C)   is typically what is observed.
D)   All of these statements are true.E) A) and C)
F) C) and D)

Question 10

In order to see how the labor market works as a whole,we need to add up all the:

Accepted Answer

A)   supply curves of individual workers and the demand curves of individual firms to find market level supply and demand.
B)   observed equilibrium wages across all individual markets and take the weighted average.
C)   demand curves of individual workers and the supply curves of individual firms to find market level demand and supply.
D)   None of these statements is true.E) C) and D)
F) None of the above

Question 11

The price effect describes the:

Accepted Answer

A)   decrease in the quantity of labor supplied in response to a higher wage.
B)   increase in the quantity of labor supplied in response to a lower wage.
C)   increase in the quantity of labor supplied in response to a higher wage.
D)   increase in the quantity of labor demanded in respond to a higher wage.E) B) and C)
F) B) and D)

Question 12

The increase in output that is generated by an additional unit of input is called the:

Accepted Answer

A)   input-output relationship.
B)   production function.
C)   resource product.
D)   marginal product.E) A) and B)
F) None of the above

Question 13

If adopted by a firm,a labor-saving piece of technology is one that would:

Accepted Answer

A)   increase labor demand.
B)   increase labor supply.
C)   decrease labor demand.
D)   decrease labor supply.E) None of the above
F) A) and B)

Question 14

If the graph shown is displaying a competitive labor market,the equilibrium wage in the market would be:

Accepted Answer

A)   Q*.
B)   P*.
C)   S.
D)  D.E) B) and C)
F) A) and D)

Question 15

If the labor market worked efficiently,then an effective minimum wage law would:

Accepted Answer

A)   cause unemployment.
B)   hold wages higher than the equilibrium price.
C)   help those who were employed at that price.
D)   All of these statements are true.E) A) and B)
F) A) and C)

Question 16

In the capital market,the rental price is what a:

Accepted Answer

A)   producer pays to use a factor of production for a certain period or task.
B)   producer pays to gain permanent ownership of a factor of production.
C)   consumer pays to use labor or land services for a certain period or task.
D)   consumer pays to gain permanent ownership of a factor of production.E) A) and B)
F) A) and C)

Question 17

A decrease in the quantity of labor supplied in response to a higher wage would be due to the:

Accepted Answer

A)   substitution effect.
B)   price effect.
C)   income effect.
D)   tax effect.E) All of the above
F) B) and C)

Question 18

Which of the following industries would be considered to have a capital intensive production process?

Accepted Answer

A)   Creating a painting.
B)   Farming in a rich country
C)   Creating a hand-crafted wine.
D)   Serving food at a restaurant.E) A) and B)
F) A) and C)

Question 19

The intersection of supply and demand in the capital market determines the market equilibrium price and quantity in the:

Accepted Answer

A)   rental market.
B)   purchase market.
C)   both the rental and purchase markets.
D)   Any of these statements could be true.E) A) and B)
F) A) and C)

Question 20

If it is a cultural norm to believe that "a busy person is an important person," then we would expect the labor:

Accepted Answer

A)   supply in that culture to be relatively greater at any wage.
B)   demand in that culture to be relatively greater at any wage.
C)   supply in that culture to be relatively lower at any wage.
D)   demand in that culture to be relatively lower at any wage.E) A) and B)
F) All of the above

Exam 16: The Factors of Production

Markets that require workers with similar human capital:

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Sadie works at a factory for $15 an hour and typically works 40 hours a week.Sadie gets a pay raise and now earns $20 an hour.She decides to work 45 hours a week at $20 an hour.Her response:

Correct AnswerverifiedShow Answer

If adopted by a firm,a labor-saving piece of technology is one that would:

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If the graph shown is displaying a competitive labor market,the equilibrium wage in the market would be:

Correct AnswerverifiedShow Answer

In general,economists place all factors of production into which three categories?

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We think about the cost of supplying labor as the:

Correct AnswerverifiedShow Answer

A decrease in the quantity of labor supplied in response to a higher wage would be due to the:

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In economics,the term "leisure" refers to:

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The factor of production called "capital" refers to:

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The intersection of supply and demand in the capital market determines the market equilibrium price and quantity in the:

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The increase in output that is generated by an additional unit of input is called the:

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In the capital market,the rental price is what a:

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We can expect producers to pay:

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Which of the following industries would be considered to have a capital intensive production process?

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The price effect describes the:

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If it is a cultural norm to believe that "a busy person is an important person," then we would expect the labor:

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In order to see how the labor market works as a whole,we need to add up all the:

Correct AnswerverifiedShow Answer

If the price effect outweighs the income effect of a wage increase,the labor-supply curve will:

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Farming in poor countries is considered to be ___________ intensive because __________.

Correct AnswerverifiedShow Answer

If the labor market worked efficiently,then an effective minimum wage law would:

Correct AnswerverifiedShow Answer

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Farming in poor countries is considered to be _ intensive because .

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