Exam 16: The Demand for Resources

A) labor costs are a smaller proportion of total costs than capital costs.
B) the firm uses labor-intensive production techniques.
C) substitutions of one resource for another are difficult.
D) the demand for its final product is price elastic.

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A) large proportion of total costs and product demand is elastic.
B) small proportion of total costs and product demand is elastic.
C) large proportion of total costs and product demand is inelastic.
D) small proportion of total costs and product demand is inelastic.

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A) the marginal productivity theory of income distribution is valid.
B) resource prices do not always measure contributions to output.
C) the resulting income distribution is ethically correct.
D) income shares do not exhaust the total output.

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A) firm can increase its total revenue.
B) price of the input doesn't exceed the price of the other inputs used in the firm's production.
C) marginal revenue product of the input is at least as much as the cost of hiring the input.
D) marginal revenue product of the input is greater than the marginal revenue product of other inputs the firm is using.

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A) solely because of diminishing marginal utility.
B) because of both diminishing returns and the necessity to lower price to sell more output.
C) solely because product price must be reduced to sell more output.
D) solely because of diminishing returns.

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A) is its marginal product curve.
B) will shift to the left if the price of the product the labor is producing should fall.
C) is perfectly elastic if the firm is selling its product in a purely competitive market.
D) reflects a direct (positive) relationship between the number of workers hired and the money wage rate.

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A) wind turbine service technicians
B) statisticians
C) nurse practitioners
D) postal service sorters and processors

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A) inelastic.
B) elastic.
C) unit-elastic.
D) perfectly inelastic.

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A) marginal product of elevator operators was equal to its price.
B) marginal product of automatic elevator equipment was equal to its price.
C) marginal product of automatic elevator equipment divided by its price was greater than that for elevator operators.
D) marginal product of elevator operators divided by its price was greater than that for automatic elevator equipment.

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A) capital is primarily a substitute for labor.
B) capital is, overall, a complement for labor, not a substitute.
C) capital and labor are almost always used in fixed proportions.
D) technological innovation is generally detrimental to employment.

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A) the output of the least skilled worker.
B) a worker's output multiplied by the price at which each unit can be sold.
C) the amount an additional worker adds to the firm's total output.
D) the amount any given worker contributes to the firm's total revenue.

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A) use more labor and less fertilizer.
B) use more fertilizer and less labor.
C) use more labor and more fertilizer.
D) continue using the same amounts of each input.

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A) the labor demand curve must have independently shifted to the right.
B) labor demand is highly elastic.
C) the coefficient of labor demand elasticity is less than 1.
D) labor demand is unit-elastic.

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A) price of the resource decreases.
B) supply of the resource decreases.
C) price of the product requiring this resource increases.
D) price of the product requiring this resource decreases.

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A) may be maximizing profits, but it is not minimizing costs.
B) may be minimizing costs, but it is not maximizing profits.
C) is neither minimizing costs nor maximizing profits.
D) is minimizing costs and maximizing profits.

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A) a decrease in the price of one will increase unit costs of production.
B) an increase in the price of one will increase the demand for the other.
C) an increase in the price of one will reduce the demand for the other.
D) a decrease in the price of one will increase the demand for the other.

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