Question 1

When the U.S.cuts funding for border patrol,the labor market in California is affected.We would expect:

Accepted Answer

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

Question 2

The set of skills,knowledge,experience,and talent that determine the productivity of workers is called:

Accepted Answer

A)  human capital.
B)  physical capital.
C)  capital per worker.
D)  worker per capita.E) None of the above
F) A) and B)

Question 3

Any event that increases the value of the marginal product of labor will:

Accepted Answer

A)  increase labor demand.
B)  decrease labor demand.
C)  increase labor supply.
D)  decrease labor supply.E) A) and B)
F) A) and C)

Question 4

The demand for factors of production is referred to as:

Accepted Answer

A)  derived demand.
B)  primary demand.
C)  implied demand.
D)  None of these statements is true.E) B) and C)
F) All of the above

Question 5

If a firm adopts a labor-saving piece of technology,it will:

Accepted Answer

A)  increase the marginal product of labor.
B)  decrease the marginal product of labor.
C)  increase the marginal supply of labor.
D)  decrease the marginal supply for labor.E) B) and D)
F) A) and C)

Question 6

We assume an upward sloping supply curve because:

Accepted Answer

A)  the price effect tends to dominate labor-supply decisions in the real world.
B)  the income effect tends to dominate labor-supply decisions in the real world.
C)  it makes better theoretical sense that the price effect would dominate.
D)  it makes better theoretical sense that the income effect would dominate.E) A) and C)
F) A) and B)

Question 7

A firm deciding how many hours to hire can be represented:

Accepted Answer

A)  with an individual labor-supply curve.
B)  in the market labor-supply curve.
C)  with an individual labor-demand curve.
D)  in the market labor-demand curve.E) B) and D)
F) A) and D)

Question 8

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) A) and B)
F) None of the above

Question 9

In a competitive labor market,if the supply of labor increases,wages will:

Accepted Answer

A)  increase.
B)  decrease.
C)  remain the same.
D)  drop to zero.E) B) and C)
F) A) and B)

Question 10

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

Accepted Answer

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

Question 11

When considering the factor distribution of income,into whose income would corporate profits be included?

Accepted Answer

A)  Owners of physical capital
B)  Owners of human capital
C)  Proprietors
D)  None of these statements is true.E) B) and C)
F) A) and B)

Question 12

If the demand for hand-sewn leather shoes increases,it is likely the demand for:

Accepted Answer

A)  leather will also increase.
B)  leather will decrease slightly.
C)  leather will stay the same.
D)  leather will drop significantly and producers will use another material.E) B) and D)
F) C) and D)

Question 13

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) None of the above

Question 14

In the market for labor,the monopsonist:

Accepted Answer

A)  is the sole buyer and can push wages down,below the competitive wage.
B)  is the sole seller and can push wages down,below the competitive wage.
C)  is the sole buyer and can keep wages up,above the competitive wage.
D)  is the sole seller and can keep wages up,above the competitive wage.E) None of the above
F) All of the above

Question 15

The labor supply could decrease when wages increase only if:

Accepted Answer

A)  the price effect outweighs the income effect.
B)  the income effect outweighs the price effect.
C)  the substitution effect outweighs the income effect.
D)  the price effect outweighs the substitution effect.E) A) and B)
F) A) and C)

Question 16

When the benefit of another hour of work is greater than the opportunity cost,we would expect the worker to:

Accepted Answer

A)  work another hour.
B)  work an hour less.
C)  work exactly that amount.
D)  Cannot be determined without more information.E) A) and C)
F) A) and D)

Question 17

A labor intensive production process is one in which:

Accepted Answer

A)  a lot of labor is hired relative to the total inputs needed to produce the good.
B)  highly skilled labor is needed to produce the good.
C)  a part of the production process must be done by labor and cannot be substituted.
D)  total costs will be minimized if labor is the primary factor of production used.E) C) and D)
F) B) and C)

Question 18

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

Accepted Answer

A)  Auto manufacturing
B)  Farming in a rich country
C)  Carbonated beverages (soda) 
D)  All of these industries are capital intensive.E) C) and D)
F) B) and D)

Question 19

If the income effect outweighs the price effect of a wage increase,the quantity of labor supplied will:

Accepted Answer

A)  increase.
B)  decrease.
C)  remain constant.
D)  drop to zero.E) A) and B)
F) None of the above

Question 20

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

Accepted Answer

A)  Writing a novel
B)  Farming in a poor country
C)  Art restoration
D)  All of these industries are labor intensive.E) All of the above
F) B) and D)

Exam 16: The Factors of Production

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

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A labor intensive production process is one in which:

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If the income effect outweighs the price effect of a wage increase,the quantity of labor supplied will:

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When considering the factor distribution of income,into whose income would corporate profits be included?

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A firm deciding how many hours to hire can be represented:

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The demand for factors of production is referred to as:

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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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If a firm adopts a labor-saving piece of technology,it will:

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

Correct AnswerverifiedShow Answer

In the market for labor,the monopsonist:

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Any event that increases the value of the marginal product of labor will:

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In a competitive labor market,if the supply of labor increases,wages will:

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When the U.S.cuts funding for border patrol,the labor market in California is affected.We would expect:

Correct AnswerverifiedShow Answer

The labor supply could decrease when wages increase only if:

Correct AnswerverifiedShow Answer

We assume an upward sloping supply curve because:

Correct AnswerverifiedShow Answer

The set of skills,knowledge,experience,and talent that determine the productivity of workers is called:

Correct AnswerverifiedShow Answer

When the benefit of another hour of work is greater than the opportunity cost,we would expect the worker to:

Correct AnswerverifiedShow Answer

If the demand for hand-sewn leather shoes increases,it is likely the demand for:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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