Question 1

Suppose a bakery purchases a machine that automatically frosts a cake in half the time of a typical worker. As a result, we would expect the bakery's labor _______ curve to shift to the _______ and wages to _______.

Accepted Answer

A)  supply; left; increase
B)  demand; right; increase
C)  supply; right; increase
D)  demand; left; decreaseE) C) and D)
F) None of the above

Question 2

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)  WorkersE) A) and C)
F) None of the above

Question 3

The quantity of labor supplied is determined by the:

Accepted Answer

A)  number of firms.
B)  opportunity cost of providing labor.
C)  marginal product of labor.
D)  amount of technology used.E) A) and B)
F) A) and C)

Question 4

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

Accepted Answer

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

Question 5

If there is a decrease in demand for a certain good produced by workers, the value of the marginal product of labor will _______ and the demand for labor will _______.

Accepted Answer

A)  increase; increase
B)  increase; decrease
C)  decrease; increase
D)  decrease; decreaseE) All of the above
F) B) and D)

Question 6

At the competitive firm's profit-maximizing quantity of labor:

Accepted Answer

A)  the value of the last worker's marginal product is greater than or equal to the marginal cost of that input.
B)  the value of the last worker's marginal product is less than the marginal cost of that input.
C)  marginal profits are always positive.
D)  the average product of labor is equal to the wage rate.E) All of the above
F) B) and C)

Question 7

If the demand for pizza increases, it is highly likely that the demand for:

Accepted Answer

A)  chicken nuggets will fall.
B)  soda will increase.
C)  mozzarella cheese will increase.
D)  All of these are a likely result.E) B) and C)
F) B) and D)

Question 8

A decrease in the quantity of labor supplied in response to a higher wage occurs due to the:

Accepted Answer

A)  substitution effect.
B)  price effect.
C)  income effect.
D)  tax effect.E) B) and C)
F) None of the above

Question 9

Which of the following is not a way that economists describe "economic rent"?

Accepted Answer

A)  The gains that workers and owners of capital receive from supplying their labor or machinery in factor markets
B)  The producer surplus in output markets
C)  The rental price of a factor of production minus the cost of supplying it
D)  The total revenue that a factor of production earns its ownerE) All of the above
F) A) and B)

Question 10

A profit-seeking firm will choose the combination of inputs that:

Accepted Answer

A)  maximizes profit.
B)  maximizes costs.
C)  has the lowest average variable cost.
D)  has the lowest average total cost.E) A) and C)
F) A) and D)

Question 11

Eli earns $8 an hour working at a local vineyard. He is scheduled to work two hours later today, but his friend calls and invites him to go rock climbing. Eli cannot decide between the two activities. His indecision implies that he values rock climbing for two hours:

Accepted Answer

A)  more than $16.
B)  less than $16.
C)  at exactly $16.
D)  at no more than $8.E) All of the above
F) B) and C)

Question 12

An individual labor supply curve represents:

Accepted Answer

A)  a worker's decisions about how many hours to work at each alternative wage.
B)  the decisions of all workers about how many hours to work at each alternative wage.
C)  a firm's decisions about how many workers to hire at each alternative wage.
D)  the decisions of all firms about how many workers to hire at each alternative wage.E) A) and B)
F) All of the above

Question 13

When considering the factor distribution of income, which of the following is represented as proprietor income?

Accepted Answer

A)  Rent for capital
B)  Interest for loans on capital
C)  Labor or capital factors that proprietors put into their businesses
D)  Wages for workersE) A) and B)
F) A) and C)

Question 14

We assume an upward-sloping supply curve because:

Accepted Answer

A)  the income effect tends to dominate labor supply decisions in the real world.
B)  it makes better theoretical sense that the price effect would dominate.
C)  it makes better theoretical sense that the income effect would dominate.
D)  the price effect tends to dominate labor supply decisions in the real world.E) None of the above
F) A) and D)

Question 15

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

Question 16

The increase in the quantity of labor supplied in response to a higher wage is called the:

Accepted Answer

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

Question 17

Suppose that jeans dramatically decrease in popularity. All else equal, how will this affect the labor market for workers in jeans factories? The labor demand for workers in jeans factories will decrease. The wage for workers in jeans factories will increase. The labor supply of workers in jeans factories will decrease.

Accepted Answer

A)  I only
B)  II and III only
C)  III only
D)  I, II, and IIIE) B) and C)
F) A) and C)

Question 18

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

Accepted Answer

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

Question 19

In a competitive labor market, if the demand for labor decreases, labor demand will shift to the _______ and wages will _______.

Accepted Answer

A)  right; increase
B)  left; increase
C)  right; decrease
D)  left; decreaseE) A) and B)
F) None of the above

Question 20

In the market for labor:

Accepted Answer

A)  workers make up the demand.
B)  firms are the suppliers.
C)  the price in the market is the wage.
D)  individuals are never paid above their productivity.E) None of the above
F) A) and B)

Exam 16: The Facts of Production

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

Correct Answer
verified

Suppose a bakery purchases a machine that automatically frosts a cake in half the time of a typical worker. As a result, we would expect the bakery's labor ___ curve to shift to the _ and wages to _____.

Correct Answer
verified

Correct Answer
verified

At the competitive firm's profit-maximizing quantity of labor:

Correct Answer
verified

We assume an upward-sloping supply curve because:

Correct Answer
verified

The quantity of labor supplied is determined by the:

Correct Answer
verified

When considering the factor distribution of income, which of the following is represented as proprietor income?

Correct Answer
verified

In a competitive labor market, if the demand for labor decreases, labor demand will shift to the _ and wages will _.

Correct Answer
verified

In the market for labor:

Correct Answer
verified

Which of the following is not a way that economists describe "economic rent"?

Correct Answer
verified

Eli earns $8 an hour working at a local vineyard. He is scheduled to work two hours later today, but his friend calls and invites him to go rock climbing. Eli cannot decide between the two activities. His indecision implies that he values rock climbing for two hours:

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

A decrease in the quantity of labor supplied in response to a higher wage occurs due to the:

Correct Answer
verified

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

Correct Answer
verified

The increase in the quantity of labor supplied in response to a higher wage is called the:

Correct Answer
verified

If the demand for pizza increases, it is highly likely that the demand for:

Correct Answer
verified

An individual labor supply curve represents:

Correct Answer
verified

A profit-seeking firm will choose the combination of inputs that:

Correct Answer
verified

If there is a decrease in demand for a certain good produced by workers, the value of the marginal product of labor will _ and the demand for labor will _.

Correct Answer
verified

Exam 16: The Facts of Production

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

Correct AnswerverifiedShow Answer

Suppose a bakery purchases a machine that automatically frosts a cake in half the time of a typical worker. As a result, we would expect the bakery's labor _______ curve to shift to the _______ and wages to _______.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

At the competitive firm's profit-maximizing quantity of labor:

Correct AnswerverifiedShow Answer

We assume an upward-sloping supply curve because:

Correct AnswerverifiedShow Answer

The quantity of labor supplied is determined by the:

Correct AnswerverifiedShow Answer

When considering the factor distribution of income, which of the following is represented as proprietor income?

Correct AnswerverifiedShow Answer

In a competitive labor market, if the demand for labor decreases, labor demand will shift to the _______ and wages will _______.

Correct AnswerverifiedShow Answer

In the market for labor:

Correct AnswerverifiedShow Answer

Which of the following is not a way that economists describe "economic rent"?

Correct AnswerverifiedShow Answer

Eli earns $8 an hour working at a local vineyard. He is scheduled to work two hours later today, but his friend calls and invites him to go rock climbing. Eli cannot decide between the two activities. His indecision implies that he values rock climbing for two hours:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A decrease in the quantity of labor supplied in response to a higher wage occurs due to the:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The increase in the quantity of labor supplied in response to a higher wage is called the:

Correct AnswerverifiedShow Answer

If the demand for pizza increases, it is highly likely that the demand for:

Correct AnswerverifiedShow Answer

An individual labor supply curve represents:

Correct AnswerverifiedShow Answer

A profit-seeking firm will choose the combination of inputs that:

Correct AnswerverifiedShow Answer

If there is a decrease in demand for a certain good produced by workers, the value of the marginal product of labor will _______ and the demand for labor will _______.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Suppose a bakery purchases a machine that automatically frosts a cake in half the time of a typical worker. As a result, we would expect the bakery's labor ___ curve to shift to the _ and wages to _____.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

In a competitive labor market, if the demand for labor decreases, labor demand will shift to the _ and wages will _.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

If there is a decrease in demand for a certain good produced by workers, the value of the marginal product of labor will _ and the demand for labor will _.

Correct Answer
verified