Question 1

Table 18-12
The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. 
-Refer to Table 18-12. Suppose the firm sells each box of envelopes that it produces for $7.50. How many workers should the firm hire?

Accepted Answer

A)   2
B)   3
C)   4
D)   5E) A) and D)
F) None of the above

Question 2

The value of the marginal product of labor is calculated by multiplying the

Accepted Answer

A)   price of output by the quantity of labor.
B)   price of output by the marginal product of labor.
C)   wage by the quantity of labor.
D)   wage by the marginal product of labor.E) B) and C)
F) C) and D)

Question 3

When you receive interest on your bank account, that income is part of the economy's income.

Accepted Answer

The answer of When you receive interest on your bank...

Question 4

Consider the market for capital equipment. Suppose the price of firms' output increases. Holding all else constant, the equilibrium rental price of capital equipment will

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   It is not possible to determine what will happen to the equilibrium rental price of capital equipment.E) A) and B)
F) B) and C)

Question 5

Figure 18-3 
-Refer to Figure 18-3. Suppose that the price of the output is $20. What is the value of the marginal product of the fourth worker?

Accepted Answer

A)   $1
B)   $20
C)   $280
D)   $300E) None of the above
F) A) and D)

Question 6

When economists refer to a firm's capital, they are describing the

Accepted Answer

A)   markets for final goods and services.
B)   stock of equipment and buildings used in production.
C)   amount of bank financing used by the firm.
D)   amount of financing provided by the equity markets.E) C) and D)
F) None of the above

Question 7

A change in the supply of one factor of production

Accepted Answer

A)   will not change either the marginal productivities or the prices of other factors.
B)   will not change the prices of other factors, but it may change their marginal productivities.
C)   will not change the marginal productivities of other factors, but it may change their prices.
D)   changes the marginal productivities and the prices of other factors.E) B) and C)
F) None of the above

Question 8

Figure 18-7 
-Refer to Figure 18-7. Which of the following would shift the labor supply curve from S1 to S2?

Accepted Answer

A)   technological progress
B)   a decrease in the price of the firm's output
C)   a change in workers' attitudes toward the work-leisure tradeoff
D)   an increase in the price of the firm's outputE) A) and C)
F) A) and D)

Question 9

Scenario 18-8
Suppose the following events occur in the market for university economics professors.
Event 1: A recession in the U.S. economy lowers the opportunity cost of going to graduate school in economics to become a university economics professor.
Event 2: A decreasing number of students in U.S. primary and secondary schools decreases the number of students entering college, decreasing the output price of university economics professors' services.
-Refer to Scenario 18-8. As a result of these two events, holding all else constant, the equilibrium wages of university economics professors will

Accepted Answer

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

Question 10

Which of the following statements is correct? An individual worker's labor supply curve

Accepted Answer

A)   can never be backward sloping.
B)   slopes backward if that person responds to a higher wage by taking fewer hours of leisure per week.
C)   slopes backward if that person responds to a higher opportunity cost of leisure by working fewer hours per week.
D)   slopes upward if that person works the same number of hours per week, regardless of the opportunity cost of leisure.E) None of the above
F) All of the above

Question 11

If hiring more workers results in each additional worker contributing successively smaller amounts of output, then which of the following is present?

Accepted Answer

A)   diminishing profitability
B)   diminishing total product
C)   diminishing marginal product
D)   Both b and c are correct.E) A) and B)
F) None of the above

Question 12

Increases in productivity are not responsible for increased standards of living in the United States.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)   increase, and more apple pickers will be hired.
B)   decrease, and more apple pickers will be hired.
C)   increase, and fewer apple pickers will be hired.
D)   decrease, and fewer apple pickers will be hired.E) B) and C)
F) A) and B)

Question 14

Figure 18-2
The figure below shows the production function for a particular firm. 
-Refer to Figure 18-2. Suppose the firm pays a wage equal to $320 per unit of labor and sells its output at $15 per unit. How many units of labor should the firm hire to maximize profit?

Accepted Answer

A)   2 units
B)   3 units
C)   4 units
D)   5 unitsE) B) and C)
F) A) and B)

Question 15

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 value of the marginal product of the first worker?

Accepted Answer

A)   $200
B)   $400
C)   $500
D)   $700E) A) and B)
F) A) and C)

Question 16

Capital is paid according to the value of its marginal product

Accepted Answer

A)   only if earnings from capital are paid to households in the form of dividends.
B)   only if earnings from capital are kept within firms as retained earnings.
C)   regardless of whether earnings from capital are paid to households in the form of dividends or whether those earnings are kept within firms as retained earnings.
D)   None of the above is correct; unlike labor, capital is a factor of production for which earnings are unrelated to the value of marginal product.E) A) and D)
F) B) and C)

Question 17

Suppose the supply of capital decreases. As a result, the quantity of capital used in production and the rental price of capital will both fall.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)   −$100
B)   $300
C)   $100
D)   $50E) B) and C)
F) All of the above

Question 19

The marginal product of any factor of production depends on

Accepted Answer

A)   the quantity of the factor used.
B)   the price of the final good.
C)   the demand for the final good.
D)   All of the above are correct.E) B) and C)
F) All of the above

Question 20

Table 18-7 
-Refer to Table 18-7. What is the market price of the final good?

Accepted Answer

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

Exam 18: The Markets for the Factors of Production

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

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A change in the supply of one factor of production

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Consider the market for capital equipment. Suppose the price of firms' output increases. Holding all else constant, the equilibrium rental price of capital equipment will

Correct Answer
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Figure 18-9 -Refer to Figure 18-9. If the price of apples increases, the equilibrium wage will

Correct Answer
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Figure 18-3 -Refer to Figure 18-3. Suppose that the price of the output is $20. What is the value of the marginal product of the fourth worker?

Correct Answer
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When economists refer to a firm's capital, they are describing the

Correct Answer
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Which of the following statements is correct? An individual worker's labor supply curve

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Table 18-12 The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. -Refer to Table 18-12. Suppose the firm sells each box of envelopes that it produces for $7.50. How many workers should the firm hire?

Correct Answer
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If hiring more workers results in each additional worker contributing successively smaller amounts of output, then which of the following is present?

Correct Answer
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Capital is paid according to the value of its marginal product

Correct Answer
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Suppose the supply of capital decreases. As a result, the quantity of capital used in production and the rental price of capital will both fall.

Correct Answer
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Figure 18-7 -Refer to Figure 18-7. Which of the following would shift the labor supply curve from S1 to S2?

Correct Answer
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Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. Suppose the firm pays a wage equal to $320 per unit of labor and sells its output at $15 per unit. How many units of labor should the firm hire to maximize profit?

Correct Answer
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Table 18-7 -Refer to Table 18-7. What is the market price of the final good?

Correct Answer
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The value of the marginal product of labor is calculated by multiplying the

Correct Answer
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The marginal product of any factor of production depends on

Correct Answer
verified

Increases in productivity are not responsible for increased standards of living in the United States.

Correct Answer
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When you receive interest on your bank account, that income is part of the economy's income.

Correct Answer
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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 value of the marginal product of the first worker?

Correct Answer
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Exam 18: The Markets for the Factors of Production

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

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A change in the supply of one factor of production

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Consider the market for capital equipment. Suppose the price of firms' output increases. Holding all else constant, the equilibrium rental price of capital equipment will

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

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Figure 18-3 -Refer to Figure 18-3. Suppose that the price of the output is $20. What is the value of the marginal product of the fourth worker?

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When economists refer to a firm's capital, they are describing the

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Which of the following statements is correct? An individual worker's labor supply curve

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Table 18-12 The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. -Refer to Table 18-12. Suppose the firm sells each box of envelopes that it produces for $7.50. How many workers should the firm hire?

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If hiring more workers results in each additional worker contributing successively smaller amounts of output, then which of the following is present?

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Capital is paid according to the value of its marginal product

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Suppose the supply of capital decreases. As a result, the quantity of capital used in production and the rental price of capital will both fall.

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Figure 18-7 -Refer to Figure 18-7. Which of the following would shift the labor supply curve from S1 to S2?

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Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. Suppose the firm pays a wage equal to $320 per unit of labor and sells its output at $15 per unit. How many units of labor should the firm hire to maximize profit?

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Table 18-7 -Refer to Table 18-7. What is the market price of the final good?

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The value of the marginal product of labor is calculated by multiplying the

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The marginal product of any factor of production depends on

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Increases in productivity are not responsible for increased standards of living in the United States.

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When you receive interest on your bank account, that income is part of the economy's income.

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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 value of the marginal product of the first worker?

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