Question 1

The rental price of capital is the price a person pays to own the capital indefinitely.

Accepted Answer

A) True 
 B)False

Question 2

Consider the labor market for computer programmers.Because of the dot.com boom in the late 1990s,a lot of workers went to school to learn how to write computer code for one of thousands of new dot.com companies.However,when these computer programming students graduated,the dot.com bust took place.The dot.com bust decreased the value of the marginal product of computer programmers.Holding all else equal,what effect did these two circumstances have on the equilibrium wage in the labor market for computer programmers?

Accepted Answer

A)   The equilibrium wage increased.
B)   The equilibrium wage decreased.
C)   The equilibrium wage did not change.
D)   It is not possible to determine what happens to the equilibrium wage.E) A) and D)
F) B) and C)

Question 3

The term Luddite refers to "tekkies" or people who are the first to adopt new technological advances.

Accepted Answer

A) True 
 B)False

Question 4

Figure 18-10 1 to D2? A)  a change in workers' attitudes toward the work-leisure tradeoff B)  decreases in wages in other labor markets C)  an increase in the price of firms' output D)  All of the above are correct." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-10.Which of the following would shift of the labor demand curve from D1 to D2?

Accepted Answer

A)   a change in workers' attitudes toward the work-leisure tradeoff
B)   decreases in wages in other labor markets
C)   an increase in the price of firms' output
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 5

If a firm experiences diminishing marginal productivity of labor,the marginal product

Accepted Answer

A)   increases as total product increases.
B)   decreases as total product increases.
C)   increases as total product decreases.
D)   decreases as total product decreases.E) B) and D)
F) B) and C)

Question 6

Daryn is raking leaves to earn money for his university's economics club.In the first hour,he rakes 8 bags of leaves.In the second hour,he rakes 6 bags of leaves.If he earns $8 per hour,the value of the marginal product of the second hour of labor is $48.

Accepted Answer

A) True 
 B)False

Question 7

A Luddite would be expected to oppose

Accepted Answer

A)   working more than eight hours per day.
B)   technological advance.
C)   national policies that limit immigration into the country.
D)   the use of economic models to demonstrate market equilibrium.E) None of the above
F) A) and B)

Question 8

Figure 18-1 
-Refer to Figure 18-1.Suppose the intersection of the supply and demand curves matches with a value of $200 on the vertical axis.Then

Accepted Answer

A)   the marginal product of capital is 200.
B)   the value of the marginal product of capital is $200.
C)   a unit of capital can be purchased for $200.
D)   each worker in markets that produce capital goods earns a wage of $200.E) A) and D)
F) B) and C)

Question 9

If the price of airline tickets falls,what will happen to the demand curve for flight attendants?

Accepted Answer

A)   It will shift to the right.
B)   It will shift to the left.
C)   The direction of the shift is ambiguous.
D)   It will remain unchanged.E) None of the above
F) C) and D)

Question 10

When a firm hires labor up to the point where the wage is equal to the value of the marginal product of labor,it is

Accepted Answer

A)   minimizing labor costs.
B)   guaranteeing that labor costs do not exceed fixed costs.
C)   maximizing the number of workers it can hire and still experience a positive profit.
D)   maximizing profit.E) A) and B)
F) B) and D)

Question 11

Sally runs a hair styling salon.Sally is a profit-maximizing owner whose firm operates in a competitive market.The marginal cost of a haircut is $11.What is the maximum wage that Sally will pay her stylists?

Accepted Answer

A)   less than $11 per haircut
B)   $11 per haircut
C)   more than $11 haircut
D)   There is insufficient information to answer this question.E) C) and D)
F) A) and B)

Question 12

When we focus on the firm as a supplier of a good or a service,we assume that the firm is a profit maximizer.When we focus on the firm as a demander of labor,we assume that the firm's objective is to

Accepted Answer

A)   minimize wages.
B)   minimize variable costs.
C)   maximize the number of workers hired.
D)   maximize profit.E) A) and C)
F) A) and B)

Question 13

Table 18-10
Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day.
 
-Refer to Table 18-10.What is the marginal profit of the sixth worker?

Accepted Answer

A)   -$12
B)   -$25
C)   -$50
D)   -$75E) C) and D)
F) None of the above

Question 14

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 $10.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)   $5
B)   $10
C)   $20
D)   There is insufficient information to answer this question.E) B) and C)
F) A) and B)

Question 15

A significant slowdown in the growth of productivity persisted in the U.S.economy between

Accepted Answer

A)   1959 and 1973.
B)   1973 and 1995.
C)   1973 and 2009.
D)   1995 and 2009.E) A) and B)
F) A) and C)

Question 16

Total income in the United States is comprised of

Accepted Answer

A)   wages only.
B)   wages and fringe benefits only.
C)   rents,profits,and interest payments only.
D)   wages,fringe benefits,rents,profits,and interest payments.E) None of the above
F) A) and B)

Question 17

Suppose that a college physics experiment goes horribly wrong and releases an electronic pulse that renders all electronic equipment in the city of San Francisco,California permanently useless.No people are hurt,and no buildings are damaged.After the accident,the wages earned by California workers will

Accepted Answer

A)   increase because the marginal productivities of workers will increase.
B)   decrease because the marginal productivities of workers will decrease.
C)   decrease because the marginal productivities of workers will increase.
D)   increase because the marginal productivities of workers will decrease.E) A) and B)
F) A) and C)

Question 18

Figure 18-5
The figure shows a particular profit-maximizing,competitive firm's value-of-marginal-product (VMP) curve.On the horizontal axis,L represents the number of workers.The time frame is daily. 
-Refer to Figure 18-5.Suppose one point on the firm's production function is (L = 3,Q = 180) ,where L = number of workers and Q = quantity of output.If the firm sells its output for $5 per unit,then

Accepted Answer

A)   a second point on the firm's production function is (L = 4,Q = 216) .
B)   the firm's production function exhibits the property of diminishing marginal product of labor.
C)   the firm will maximize profit by hiring four workers if it pays workers $160 per day.
D)   All of the above are correct.E) None of the above
F) C) and D)

Question 19

Table 18-6
 
-Refer to Table 18-6.What is the market price of the final good?

Accepted Answer

A)   $5
B)   $6
C)   $8
D)   $10E) A) and B)
F) A) and C)

Question 20

A competitive,profit-maximizing pays its workers a wage of $200 per day and it sells its output for $10 per unit.Determine the marginal product,on a daily basis,of the last worker hired.

Accepted Answer

Using the profit-max...

Exam 18: The Market for the Factors of Production

Table 18-10 Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day. -Refer to Table 18-10.What is the marginal profit of the sixth worker?

Correct Answer
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Figure 18-1 -Refer to Figure 18-1.Suppose the intersection of the supply and demand curves matches with a value of $200 on the vertical axis.Then

Correct Answer
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Sally runs a hair styling salon.Sally is a profit-maximizing owner whose firm operates in a competitive market.The marginal cost of a haircut is $11.What is the maximum wage that Sally will pay her stylists?

Correct Answer
verified

The term Luddite refers to "tekkies" or people who are the first to adopt new technological advances.

Correct Answer
verified

Correct Answer
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Total income in the United States is comprised of

Correct Answer
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A competitive,profit-maximizing pays its workers a wage of $200 per day and it sells its output for $10 per unit.Determine the marginal product,on a daily basis,of the last worker hired.

Correct Answer
verified
Using the profit-max...
View Answer

If the price of airline tickets falls,what will happen to the demand curve for flight attendants?

Correct Answer
verified

When a firm hires labor up to the point where the wage is equal to the value of the marginal product of labor,it is

Correct Answer
verified

Daryn is raking leaves to earn money for his university's economics club.In the first hour,he rakes 8 bags of leaves.In the second hour,he rakes 6 bags of leaves.If he earns $8 per hour,the value of the marginal product of the second hour of labor is $48.

Correct Answer
verified

A Luddite would be expected to oppose

Correct Answer
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Table 18-6 -Refer to Table 18-6.What is the market price of the final good?

Correct Answer
verified

Correct Answer
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The rental price of capital is the price a person pays to own the capital indefinitely.

Correct Answer
verified

If a firm experiences diminishing marginal productivity of labor,the marginal product

Correct Answer
verified

Correct Answer
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Figure 18-10 -Refer to Figure 18-10.Which of the following would shift of the labor demand curve from D₁ to D₂?

Correct Answer
verified

A significant slowdown in the growth of productivity persisted in the U.S.economy between

Correct Answer
verified

When we focus on the firm as a supplier of a good or a service,we assume that the firm is a profit maximizer.When we focus on the firm as a demander of labor,we assume that the firm's objective is to

Correct Answer
verified

Correct Answer
verified

Exam 18: The Market for the Factors of Production

Table 18-10 Consider the following daily production data for Caroline's Cookies,Inc.Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day. -Refer to Table 18-10.What is the marginal profit of the sixth worker?

Correct AnswerverifiedShow Answer

Figure 18-1 -Refer to Figure 18-1.Suppose the intersection of the supply and demand curves matches with a value of $200 on the vertical axis.Then

Correct AnswerverifiedShow Answer

Sally runs a hair styling salon.Sally is a profit-maximizing owner whose firm operates in a competitive market.The marginal cost of a haircut is $11.What is the maximum wage that Sally will pay her stylists?

Correct AnswerverifiedShow Answer

The term Luddite refers to "tekkies" or people who are the first to adopt new technological advances.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Total income in the United States is comprised of

Correct AnswerverifiedShow Answer

A competitive,profit-maximizing pays its workers a wage of $200 per day and it sells its output for $10 per unit.Determine the marginal product,on a daily basis,of the last worker hired.

Correct AnswerverifiedUsing the profit-max...View AnswerShow Answer

If the price of airline tickets falls,what will happen to the demand curve for flight attendants?

Correct AnswerverifiedShow Answer

When a firm hires labor up to the point where the wage is equal to the value of the marginal product of labor,it is

Correct AnswerverifiedShow Answer

Daryn is raking leaves to earn money for his university's economics club.In the first hour,he rakes 8 bags of leaves.In the second hour,he rakes 6 bags of leaves.If he earns $8 per hour,the value of the marginal product of the second hour of labor is $48.

Correct AnswerverifiedShow Answer

A Luddite would be expected to oppose

Correct AnswerverifiedShow Answer

Table 18-6 -Refer to Table 18-6.What is the market price of the final good?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The rental price of capital is the price a person pays to own the capital indefinitely.

Correct AnswerverifiedShow Answer

If a firm experiences diminishing marginal productivity of labor,the marginal product

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 18-10 -Refer to Figure 18-10.Which of the following would shift of the labor demand curve from D1 to D2?

Correct AnswerverifiedShow Answer

A significant slowdown in the growth of productivity persisted in the U.S.economy between

Correct AnswerverifiedShow Answer

When we focus on the firm as a supplier of a good or a service,we assume that the firm is a profit maximizer.When we focus on the firm as a demander of labor,we assume that the firm's objective is to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Using the profit-max...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Figure 18-10 -Refer to Figure 18-10.Which of the following would shift of the labor demand curve from D₁ to D₂?

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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