Question 1

Most of the total income earned in the U.S.economy is ultimately paid to

Accepted Answer

A)   households in the form of wages and fringe benefits.
B)   landowners in the form of rent.
C)   landowners in the form of interest.
D)   landowners in the form of profit.E) A) and C)
F) C) and D)

Question 2

If the value of the marginal product of labor exceeds the wage,then hiring another worker increases the firm's

Accepted Answer

A)   profit.
B)   total cost.
C)   total revenue.
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 3

Table 18-1.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 18-1.Let Q represent the number of boxes of envelopes produced per week.Which of the following points is not a point on this firm's production function?

Accepted Answer

A)   (L = 2,Q = 240) .
B)   (L = 3,Q = 332) .
C)   (L = 4,Q = 408) .
D)   (L = 5,Q = 494) .E) A) and D)
F) C) and D)

Question 4

If a worker respond to an increase in the opportunity cost of leisure by taking more leisure,then her labor supply curve is

Accepted Answer

A)   upward sloping.
B)   backward sloping.
C)   horizontal.
D)   vertical.E) A) and B)
F) C) and D)

Question 5

When deciding whether to hire an additional worker,firms need only consider how the additional worker would affect

Accepted Answer

A)   costs.
B)   revenues.
C)   output.
D)   profit.E) B) and D)
F) B) and C)

Question 6

Table 18-1
 
-Refer to Table 18-1.Suppose that the firm pays its workers $80 per day.Each unit of output sells for $15.How many days of labor should the firm hire?

Accepted Answer

A)   3
B)   4
C)   5
D)   6E) A) and C)
F) A) and B)

Question 7

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 value of the marginal product of the fifth worker?

Accepted Answer

A)   $120
B)   $300
C)   $2,000
D)   $2,300E) None of the above
F) A) and B)

Question 8

Suppose that a new invention increases the marginal productivity of labor,shifting labor demand to the right.Such an invention would be an example of

Accepted Answer

A)   labor-saving technology.
B)   labor-augmenting technology.
C)   Luddite technology.
D)   supply-shifting technology.E) B) and C)
F) C) and D)

Question 9

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

Question 10

When a firm decides to retain its earnings instead of paying dividends,the stockholders necessarily suffer.

Accepted Answer

A) True 
 B)False

Question 11

Figure 18-4 
-Refer to Figure 18-4.The graph above illustrates the market for bakers who make homemade breads and breakfast pastries.If the price of breakfast pastries falls,what happens in the market for bakers?

Accepted Answer

A)   Demand increases from D1 to D2.
B)   Demand decreases from D2 to D1.
C)   Supply increases from S1 to S2.
D)   Supply decreases from S2 to S1.E) A) and B)
F) C) and D)

Question 12

Figure 18-2
The figure below shows the production function for a particular firm. 
-Refer to Figure 18-2.The marginal product of the third worker is

Accepted Answer

A)   20 units.
B)   30 units.
C)   40 units.
D)   70 units.E) A) and B)
F) B) and C)

Question 13

"The firm hires the factor up to the point where the value of the factor's marginal product is equal to the factor's price." This statement applies to which factor of production?

Accepted Answer

A)   labor only
B)   land only
C)   capital only
D)   land,labor,and capitalE) B) and D)
F) None of the above

Question 14

Figure 18-9 1. (iii) The labor supply curve will remain unchanged. A)  (i) and (ii) only B)  (ii) and (iii) only C)  (i) and (iii) only D)  (i) , (ii) ,and (iii) " class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 18-9.If the marginal product of labor falls and the price of apples remains unchanged, 
(i) The value of the marginal product of labor will fall.
(ii) The quantity of labor demanded will increase above L1.
(iii) The labor supply curve will remain unchanged.

Accepted Answer

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

Question 15

If Ernie's individual labor supply curve is upward sloping,then Ernie responds to an increase in the

Accepted Answer

A)   wage by working more hours per week.
B)   opportunity cost of leisure by working fewer hours per week.
C)   opportunity cost of leisure by taking more hours of leisure per week.
D)   Both a and b are correct.E) B) and C)
F) A) and C)

Question 16

A household member's decision about how much labor to supply is most closely linked to

Accepted Answer

A)   the supply of factors of production other than labor.
B)   technological change.
C)   the tradeoff between leisure and work.
D)   immigration trends.E) A) and B)
F) A) and D)

Question 17

Diminishing marginal product occurs when

Accepted Answer

A)   the increases to total output are declining.
B)   marginal product is negative.
C)   total output is decreasing.
D)   All of the above are correct.E) None of the above
F) C) and D)

Question 18

Diminishing marginal product is closely related to

Accepted Answer

A)   diminishing total cost.
B)   diminishing marginal cost.
C)   increasing price.
D)   increasing marginal cost.E) B) and C)
F) None of the above

Question 19

Along the horizontal axis of the production function we typically measure

Accepted Answer

A)   revenue.
B)   the marginal product of the input.
C)   the quantity of input.
D)   the quantity of output.E) A) and B)
F) A) and C)

Question 20

Table 18-9
 
-Refer to Table 18-9.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $5 in a competitive market.What is the marginal revenue product of the third worker?

Accepted Answer

A)   120 baseballs.
B)   $300
C)   $400
D)   $600E) None of the above
F) A) and D)

Exam 18: The Market for the Factors of Production

A household member's decision about how much labor to supply is most closely linked to

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.The marginal product of the third worker is

Correct Answer
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Diminishing marginal product occurs when

Correct Answer
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"The firm hires the factor up to the point where the value of the factor's marginal product is equal to the factor's price." This statement applies to which factor of production?

Correct Answer
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Figure 18-4 -Refer to Figure 18-4.The graph above illustrates the market for bakers who make homemade breads and breakfast pastries.If the price of breakfast pastries falls,what happens in the market for bakers?

Correct Answer
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When deciding whether to hire an additional worker,firms need only consider how the additional worker would affect

Correct Answer
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When a firm decides to retain its earnings instead of paying dividends,the stockholders necessarily suffer.

Correct Answer
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Table 18-9 -Refer to Table 18-9.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $5 in a competitive market.What is the marginal revenue product of the third worker?

Correct Answer
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Most of the total income earned in the U.S.economy is ultimately paid to

Correct Answer
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If a worker respond to an increase in the opportunity cost of leisure by taking more leisure,then her labor supply curve is

Correct Answer
verified

Suppose that a new invention increases the marginal productivity of labor,shifting labor demand to the right.Such an invention would be an example of

Correct Answer
verified

Table 18-1 -Refer to Table 18-1.Suppose that the firm pays its workers $80 per day.Each unit of output sells for $15.How many days of labor 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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Figure 18-9 -Refer to Figure 18-9.If the marginal product of labor falls and the price of apples remains unchanged, (i) The value of the marginal product of labor will fall. (ii) The quantity of labor demanded will increase above L₁. (iii) The labor supply curve will remain unchanged.

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

Correct Answer
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If the value of the marginal product of labor exceeds the wage,then hiring another worker increases the firm's

Correct Answer
verified

If Ernie's individual labor supply curve is upward sloping,then Ernie responds to an increase in the

Correct Answer
verified

Diminishing marginal product is closely related to

Correct Answer
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Along the horizontal axis of the production function we typically measure

Correct Answer
verified

Exam 18: The Market for the Factors of Production

A household member's decision about how much labor to supply is most closely linked to

Correct AnswerverifiedShow Answer

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2.The marginal product of the third worker is

Correct AnswerverifiedShow Answer

Diminishing marginal product occurs when

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

"The firm hires the factor up to the point where the value of the factor's marginal product is equal to the factor's price." This statement applies to which factor of production?

Correct AnswerverifiedShow Answer

Figure 18-4 -Refer to Figure 18-4.The graph above illustrates the market for bakers who make homemade breads and breakfast pastries.If the price of breakfast pastries falls,what happens in the market for bakers?

Correct AnswerverifiedShow Answer

When deciding whether to hire an additional worker,firms need only consider how the additional worker would affect

Correct AnswerverifiedShow Answer

When a firm decides to retain its earnings instead of paying dividends,the stockholders necessarily suffer.

Correct AnswerverifiedShow Answer

Table 18-9 -Refer to Table 18-9.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $5 in a competitive market.What is the marginal revenue product of the third worker?

Correct AnswerverifiedShow Answer

Most of the total income earned in the U.S.economy is ultimately paid to

Correct AnswerverifiedShow Answer

If a worker respond to an increase in the opportunity cost of leisure by taking more leisure,then her labor supply curve is

Correct AnswerverifiedShow Answer

Suppose that a new invention increases the marginal productivity of labor,shifting labor demand to the right.Such an invention would be an example of

Correct AnswerverifiedShow Answer

Table 18-1 -Refer to Table 18-1.Suppose that the firm pays its workers $80 per day.Each unit of output sells for $15.How many days of labor should the firm hire?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 18-9 -Refer to Figure 18-9.If the marginal product of labor falls and the price of apples remains unchanged, (i) The value of the marginal product of labor will fall. (ii) The quantity of labor demanded will increase above L1. (iii) The labor supply curve will remain unchanged.

Correct AnswerverifiedShow Answer

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 value of the marginal product of the fifth worker?

Correct AnswerverifiedShow Answer

If the value of the marginal product of labor exceeds the wage,then hiring another worker increases the firm's

Correct AnswerverifiedShow Answer

If Ernie's individual labor supply curve is upward sloping,then Ernie responds to an increase in the

Correct AnswerverifiedShow Answer

Diminishing marginal product is closely related to

Correct AnswerverifiedShow Answer

Along the horizontal axis of the production function we typically measure

Correct AnswerverifiedShow Answer

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Figure 18-9 -Refer to Figure 18-9.If the marginal product of labor falls and the price of apples remains unchanged, (i) The value of the marginal product of labor will fall. (ii) The quantity of labor demanded will increase above L₁. (iii) The labor supply curve will remain unchanged.

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