Question 1

If there is a shortage of nurses,it is expected that

Accepted Answer

A)  wages for nurses will go up as hospitals try to fill these positions.
B)  wages for nurses will go down because of the increased competition between hospitals.
C)  the return on the human capital investment of current nursing majors will decline.
D)  wages for nurses currently practicing will increase,but new nurses will experience lower wages in the future.

Question 2

Other things equal,when the supply of workers is scarce,one would predict that market wages would be

Accepted Answer

A)  relatively high.
B)  relatively low.
C)  determined solely by factors that affect demand.
D)  determined outside the domain of economic theory.

Question 3

A decrease in the demand for a final product will cause

Accepted Answer

A)  a decrease in demand for the resources used to produce the good.
B)  an increase in demand for the resources used to produce the good.
C)  firms to expand production of the good.
D)  an increase in the supply of resources used to produce the good.

Question 4

In recent years,the ratio of earnings of the typical U.S.college graduate to the earnings of the typical high school graduate without additional education has

Accepted Answer

A)  risen as the demand for skilled labor has increased relative to the demand for unskilled labor.
B)  risen as the demand for skilled labor has decreased relative to the demand for unskilled labor.
C)  fallen as the demand for skilled labor has increased relative to the demand for unskilled labor.
D)  fallen as the demand for skilled labor has decreased relative to the demand for unskilled labor.

Question 5

Jim Smith runs a company that sells encyclopedia sets for $200 each.When he employs 5 workers,they can sell 20 sets per week,whereas only 17 sets are sold when 4 workers are employed.What is the weekly marginal revenue product of the fifth worker?

Accepted Answer

A)  $3
B)  $200
C)  $600
D)  $4,000

Question 6

Troll Corporation sells dolls for $10.00 each in a market that is perfectly competitive.Increasing the number of workers from 100 to 101 would cause output to rise from 500 to 550 dolls per day.The marginal revenue product for the 101st worker is

Accepted Answer

A)  $10.00.
B)  $500.
C)  $5,000.
D)  $1,010.

Question 7

As the price of land decreases along its demand curve,the relative price of land

Accepted Answer

A)  increases because the prices of other resources have also decreased.
B)  decreases because the prices of other resources have also decreased.
C)  increases because the prices of other resources have increased.
D)  decreases because the prices of other resources are held constant.
E)  remains constant because the prices of other resources also increase.

Question 8

The marginal product of labor is the

Accepted Answer

A)  value marginal product of labor multiplied by the price of the good produced.
B)  total output of labor divided by the quantity of labor used.
C)  additional output resulting from employing one additional unit of labor.
D)  same as the marginal revenue product of labor in price-taker markets.

Question 9

Use the information in the table below to answer the following question(s) .The firm hires labor competitively and sells its product in a competitive price-taker market.
Table 12-6
 
-Refer to Table 12-6.What is the marginal revenue product of the fifth unit of labor?

Accepted Answer

A)  $6
B)  $36
C)  $54
D)  $324

Question 10

An increase in the demand for a product will cause

Accepted Answer

A)  both the demand for and prices of the resources used to produce the product to decline.
B)  both the demand for and prices of the resources used to produce the product to increase.
C)  the demand for the resources used to produce the product to increase and their prices to decline.
D)  the demand for the resources used to produce the product to decline and their prices to increase.

Question 11

A decrease in the demand for a product will cause output of that product to

Accepted Answer

A)  increase and the demand for and prices of the resources used to produce the product to rise.
B)  decrease and both the demand for and prices of the resources used to produce the product to fall.
C)  decline;the demand for the resources used to produce the product will remain constant.
D)  increase;the price of resources used to produce the product will rise if their supply is elastic but fall if supply is inelastic.

Question 12

An apple orchard currently hires 10 workers.The owner estimates that hiring an additional worker would increase apple yields by 20 bushels per day.The price of apples is $15 per bushel.The owner should hire the extra worker if the wage rate is no greater than

Accepted Answer

A)  $50 per day.
B)  $150 per day.
C)  $200 per day.
D)  $300 per day.

Question 13

Which of the following is the best example of an investment in human capital?

Accepted Answer

A)  the purchase of an industrial development bond
B)  the purchase of company stock by a worker
C)  a student working as a waiter to pay for college
D)  a laid-off stockbroker who is taking nursing courses

Question 14

Economists refer to expenditures on training,education,and skill development designed to increase the productivity of an individual as

Accepted Answer

A)  overhead expenditures.
B)  investments in human capital.
C)  sunk expenditures.
D)  social capital.

Question 15

In the short run,the supply of a resource will generally be

Accepted Answer

A)  less elastic than in the long run.
B)  more elastic than in the long run.
C)  equally elastic as the supply of the resource in the long run.
D)  inversely related to the elasticity of demand for the product that the resource helps produce.

Question 16

Suppose a change in technology increases the marginal product of labor.The result is

Accepted Answer

A)  a downward movement along the demand for labor curve.
B)  a rightward shift in the demand for labor curve.
C)  a leftward shift in the demand for labor curve.
D)  an upward movement along the demand for labor curve.

Question 17

According to the principle of marginal productivity,if

Accepted Answer

A)  the product price is less than MRP,the firm is using too little of the input.
B)  the price of an input rises,the quantity demanded of the input will increase.
C)  MRP is greater than product price,the firm should reduce the use of the input.
D)  price of the input equals MRP,the firm is maximizing profit.

Question 18

Ceteris paribus,a decrease in the demand for automobiles will

Accepted Answer

A)  increase the price of automobiles.
B)  increase the quantity supplied of automobiles.
C)  decrease the demand for automobile workers.
D)  increase the demand for automobile workers.

Question 19

Other things constant,if the demand for a product is inelastic,the demand for a resource used as an input will tend to be

Accepted Answer

A)  inelastic as well.
B)  basically elastic.
C)  of unitary elasticity.
D)  the inverse of the elasticity coefficient of the product.

Question 20

Jim Smith runs a company that sells encyclopedia sets for $200 each.When he employs 5 workers,they can sell 20 sets per week,while only 17 sets are sold when 4 workers are employed.If the wage of workers in this skill category is $500 per week,should the fifth worker be hired?

Accepted Answer

A)  No,because the MRP of the fifth worker is less than $500 per week.
B)  No,because the MRP of the fifth worker is more than $500 per week.
C)  Yes,because the MRP of the fifth worker is less than $500 per week.
D)  Yes,because the MRP of the fifth worker is more than $500 per week.

Exam 25: The Supply of and Demand for Productive Resources

Which of the following is the best example of an investment in human capital?

Correct AnswerverifiedShow Answer

Troll Corporation sells dolls for $10.00 each in a market that is perfectly competitive.Increasing the number of workers from 100 to 101 would cause output to rise from 500 to 550 dolls per day.The marginal revenue product for the 101st worker is

Correct AnswerverifiedShow Answer

Use the information in the table below to answer the following question(s) .The firm hires labor competitively and sells its product in a competitive price-taker market. Table 12-6 -Refer to Table 12-6.What is the marginal revenue product of the fifth unit of labor?

Correct AnswerverifiedShow Answer

According to the principle of marginal productivity,if

Correct AnswerverifiedShow Answer

In recent years,the ratio of earnings of the typical U.S.college graduate to the earnings of the typical high school graduate without additional education has

Correct AnswerverifiedShow Answer

Suppose a change in technology increases the marginal product of labor.The result is

Correct AnswerverifiedShow Answer

An apple orchard currently hires 10 workers.The owner estimates that hiring an additional worker would increase apple yields by 20 bushels per day.The price of apples is $15 per bushel.The owner should hire the extra worker if the wage rate is no greater than

Correct AnswerverifiedShow Answer

Ceteris paribus,a decrease in the demand for automobiles will

Correct AnswerverifiedShow Answer

Jim Smith runs a company that sells encyclopedia sets for $200 each.When he employs 5 workers,they can sell 20 sets per week,whereas only 17 sets are sold when 4 workers are employed.What is the weekly marginal revenue product of the fifth worker?

Correct AnswerverifiedShow Answer

Other things equal,when the supply of workers is scarce,one would predict that market wages would be

Correct AnswerverifiedShow Answer

A decrease in the demand for a final product will cause

Correct AnswerverifiedShow Answer

Economists refer to expenditures on training,education,and skill development designed to increase the productivity of an individual as

Correct AnswerverifiedShow Answer

The marginal product of labor is the

Correct AnswerverifiedShow Answer

Jim Smith runs a company that sells encyclopedia sets for $200 each.When he employs 5 workers,they can sell 20 sets per week,while only 17 sets are sold when 4 workers are employed.If the wage of workers in this skill category is $500 per week,should the fifth worker be hired?

Correct AnswerverifiedShow Answer

As the price of land decreases along its demand curve,the relative price of land

Correct AnswerverifiedShow Answer

In the short run,the supply of a resource will generally be

Correct AnswerverifiedShow Answer

A decrease in the demand for a product will cause output of that product to

Correct AnswerverifiedShow Answer

Other things constant,if the demand for a product is inelastic,the demand for a resource used as an input will tend to be

Correct AnswerverifiedShow Answer

An increase in the demand for a product will cause

Correct AnswerverifiedShow Answer

If there is a shortage of nurses,it is expected that

Correct AnswerverifiedShow Answer

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