Question 1

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. Suppose the firm hires each unit of labor for $600 per week, and each unit of output sells for $9. What is the value of the marginal product of the third worker?

Accepted Answer

A)   $540
B)   $600
C)   $675
D)   $810E) A) and B)
F) A) and C)

Question 2

Table 18-1
 
-Refer to Table 18-1. What is the marginal product of the second worker?

Accepted Answer

A)   8
B)   9
C)   10
D)   18E) None of the above
F) A) and B)

Question 3

Suppose that a large lake in the middle of Minnesota evaporates, leaving more fertile farm land for growing corn available. Assuming that land and labor are complements in a farming 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) A) and D)
F) None of the above

Question 4

Table 18-5
 
-Refer to Table 18-5. How many workers should the firm hire?

Accepted Answer

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

Question 5

Table 18-6
 
-Refer to Table 18-6. What is the value for the cell labeled BB?

Accepted Answer

A)   $300
B)   $200
C)   $100
D)   −$100E) None of the above
F) All of the above

Question 6

For a snow-removal business, the capital stock would include inputs such as snow blowers and shovels.

Accepted Answer

A) True 
 B)False

Question 7

Scenario 18-1
Harry owns a snow-removal business. He hires workers to shovel driveways for him during the winter. The first worker he hires can shovel twelve driveways in one day. When Harry hires two workers, they can shovel a total of 22 driveways in one day. When Harry hires a third worker, he shovels an additional eight driveways in one day.
-Refer to Scenario 18-1. Suppose that Harry pays each worker $80 per day and that he charges each customer $20 to have his driveway shoveled. What is the value of the marginal product of labor for the third worker?

Accepted Answer

A)   $160
B)   $640
C)   $1,600
D)   $2,400E) A) and C)
F) None of the above

Question 8

Scenario 18-1
Harry owns a snow-removal business. He hires workers to shovel driveways for him during the winter. The first worker he hires can shovel twelve driveways in one day. When Harry hires two workers, they can shovel a total of 22 driveways in one day. When Harry hires a third worker, he shovels an additional eight driveways in one day.
-Refer to Scenario 18-1. Suppose that Harry pays each worker $80 per day and that he charges each customer $20 to have his driveway shoveled. What is the value of the marginal product of labor for the second worker?

Accepted Answer

A)   $200
B)   $240
C)   $800
D)   $960E) A) and B)
F) A) and C)

Question 9

The equilibrium rental income paid to the owners of capital at any point in time equals the

Accepted Answer

A)   marginal product of capital.
B)   value of the marginal product of capital.
C)   percentage of profits paid out to stockholders in the form of dividends.
D)   equilibrium purchase price of capital.E) C) and D)
F) A) and D)

Question 10

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium quantity of doctors will

Accepted Answer

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

Question 11

Suppose that the labor market for life guards is initially in equilibrium. Then a new television series debuts which glamorizes the social opportunities for life guards. What happens to the equilibrium wage and quantity of life guards?

Accepted Answer

A)   Both the equilibrium wage and quantity increase.
B)   Both the equilibrium wage and quantity decrease.
C)   The equilibrium wage increases, and the equilibrium quantity decreases.
D)   The equilibrium wage decreases, and the equilibrium quantity increases.E) B) and C)
F) A) and B)

Question 12

Which of the following could increase the supply of labor in the market for cranberry pickers? (i)  a change in the preferences of women toward full-time work
(ii)  an increase in the output price
(iii)  an increase in the wages paid to apple pickers
(iv)  a decrease in the wages paid to apple pickers

Accepted Answer

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

Question 13

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. Suppose the firm sells its output for $20 per unit, and it pays each of its workers $1,250 per week. The firm maximizes profit by hiring

Accepted Answer

A)   3 workers.
B)   4 workers.
C)   5 workers.
D)   6 workers.E) A) and B)
F) None of the above

Question 14

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

Question 15

For a competitive firm experiencing diminishing marginal productivity, the value of the marginal product (i)  increases when the price of output decreases.
(ii)  changes when marginal product changes.
(iii)  diminishes as the number of workers rises.

Accepted Answer

A)   (i)  and (ii) 
B)   (i)  and (iii) 
C)   (ii)  and (iii) 
D)   All of the above are correct.E) All of the above
F) A) and D)

Question 16

Table 18-11
Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $2 each and pays the workers a wage of $325 per day.
 
-Refer to Table 18-11. What is the sixth worker's marginal product of labor?

Accepted Answer

A)   100 cupcakes
B)   120 cupcakes
C)   140 cupcakes
D)   160 cupcakesE) A) and D)
F) A) and C)

Question 17

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 C)
F) All of the above

Question 18

The marginal product of labor is the

Accepted Answer

A)   marginal revenue product minus the wage paid to the worker.
B)   total amount of output divided by the total units of labor.
C)   increase in the amount of output from an additional unit of labor.
D)   None of the above is correct.E) C) and D)
F) A) and C)

Question 19

Figure 18-11 
-Refer to Figure 18-11. What is measured on the vertical axis of the graph?

Accepted Answer

A)   the rate of technological progress
B)   wages paid to workers in markets where capital goods are produced
C)   wages paid to workers in markets where capital goods are not produced
D)   the rental price of capitalE) A) and B)
F) A) and C)

Question 20

Technological advances can cause the labor demand curve to shift.

Accepted Answer

A) True 
 B)False

Exam 18: The Markets for the Factors of Production

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

Table 18-11 Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $2 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the sixth worker's marginal product of labor?

Correct Answer
verified

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium quantity of doctors will

Correct Answer
verified

Figure 18-11 -Refer to Figure 18-11. What is measured on the vertical axis of the graph?

Correct Answer
verified

The equilibrium rental income paid to the owners of capital at any point in time equals the

Correct Answer
verified

For a competitive firm experiencing diminishing marginal productivity, the value of the marginal product (i) increases when the price of output decreases. (ii) changes when marginal product changes. (iii) diminishes as the number of workers rises.

Correct Answer
verified

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

Correct Answer
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Table 18-5 -Refer to Table 18-5. How many workers should the firm hire?

Correct Answer
verified

Technological advances can cause the labor demand curve to shift.

Correct Answer
verified

Suppose that a large lake in the middle of Minnesota evaporates, leaving more fertile farm land for growing corn available. Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and rents earned by landowners?

Correct Answer
verified

Correct Answer
verified

Which of the following could increase the supply of labor in the market for cranberry pickers? (i) a change in the preferences of women toward full-time work (ii) an increase in the output price (iii) an increase in the wages paid to apple pickers (iv) a decrease in the wages paid to apple pickers

Correct Answer
verified

The marginal product of labor is the

Correct Answer
verified

Correct Answer
verified

Suppose that the labor market for life guards is initially in equilibrium. Then a new television series debuts which glamorizes the social opportunities for life guards. What happens to the equilibrium wage and quantity of life guards?

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. Suppose the firm hires each unit of labor for $600 per week, and each unit of output sells for $9. What is the value of the marginal product of the third worker?

Correct Answer
verified

For a snow-removal business, the capital stock would include inputs such as snow blowers and shovels.

Correct Answer
verified

Table 18-6 -Refer to Table 18-6. What is the value for the cell labeled BB?

Correct Answer
verified

Table 18-1 -Refer to Table 18-1. What is the marginal product of the second worker?

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. Suppose the firm sells its output for $20 per unit, and it pays each of its workers $1,250 per week. The firm maximizes profit by hiring

Correct Answer
verified

Exam 18: The Markets for the Factors of Production

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

Table 18-11 Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $2 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the sixth worker's marginal product of labor?

Correct AnswerverifiedShow Answer

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium quantity of doctors will

Correct AnswerverifiedShow Answer

Figure 18-11 -Refer to Figure 18-11. What is measured on the vertical axis of the graph?

Correct AnswerverifiedShow Answer

The equilibrium rental income paid to the owners of capital at any point in time equals the

Correct AnswerverifiedShow Answer

For a competitive firm experiencing diminishing marginal productivity, the value of the marginal product (i) increases when the price of output decreases. (ii) changes when marginal product changes. (iii) diminishes as the number of workers rises.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 18-5 -Refer to Table 18-5. How many workers should the firm hire?

Correct AnswerverifiedShow Answer

Technological advances can cause the labor demand curve to shift.

Correct AnswerverifiedShow Answer

Suppose that a large lake in the middle of Minnesota evaporates, leaving more fertile farm land for growing corn available. Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and rents earned by landowners?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following could increase the supply of labor in the market for cranberry pickers? (i) a change in the preferences of women toward full-time work (ii) an increase in the output price (iii) an increase in the wages paid to apple pickers (iv) a decrease in the wages paid to apple pickers

Correct AnswerverifiedShow Answer

The marginal product of labor is the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that the labor market for life guards is initially in equilibrium. Then a new television series debuts which glamorizes the social opportunities for life guards. What happens to the equilibrium wage and quantity of life guards?

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. Suppose the firm hires each unit of labor for $600 per week, and each unit of output sells for $9. What is the value of the marginal product of the third worker?

Correct AnswerverifiedShow Answer

For a snow-removal business, the capital stock would include inputs such as snow blowers and shovels.

Correct AnswerverifiedShow Answer

Table 18-6 -Refer to Table 18-6. What is the value for the cell labeled BB?

Correct AnswerverifiedShow Answer

Table 18-1 -Refer to Table 18-1. What is the marginal product of the second worker?

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. Suppose the firm sells its output for $20 per unit, and it pays each of its workers $1,250 per week. The firm maximizes profit by hiring

Correct AnswerverifiedShow Answer

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