Question 1

In a perfectly competitive labor market, when a firm hires more labor

Accepted Answer

A)  wages will increase.
B)  wages will decrease.
C)  wages will remain the same.

Question 2

Suppose that the marginal revenue product of the fourth acre of land is $180 and the rent paid on that land is $200 an acre. We can say that

Accepted Answer

A)  not enough land is being rented.
B)  just enough land is being rented.
C)  too much land is being rented.

Question 3

As output rises,

Accepted Answer

A)  both marginal revenue product and marginal physical product rise.
B)  both marginal revenue product and marginal physical product fall.
C)  marginal revenue product rises and marginal physical product falls.
D)  marginal revenue product rises and marginal physical product rises.

Question 4

A rise in the wage rate would lead to a movement

Accepted Answer

A)  down the MRP curve and a rise in the number of workers hired.
B)  down the MRP curve and a decline in the number of workers hired.
C)  up the MRP curve and a decline in the number of workers hired.
D)  up the MRP curve and a rise in the number of workers hired.

Question 5

The most important influence on the marginal revenue product schedule for computer software engineers would be a change in

Accepted Answer

A)  their productivity.
B)  a change in the price of laser printers.
C)  a change in the demand for computer software.
D)  a change in the quantity of capital available to produce computer software.

Question 6

Use the following Table to answer the question :

-The maximum units of input you would possibly hire is

Accepted Answer

A)  2.
B)  3.
C)  4.
D)  5.
E)  6.

Question 7

The MRP curve for labor generally expresses

Accepted Answer

A)  a particular firm's demand for labor.
B)  the entire industry's demand for labor.
C)  the entire economy's demand for labor.
D)  None of the choices are correct.

Question 8

Is the firm a perfect competitor or an imperfect competitor? Explain your answer in one sentence.

Accepted Answer

An imperfect competi...

Question 9

All of the following will increase the demand for labor by firms in an industry except

Accepted Answer

A)  an increase in the price of the product produced by the industry.
B)  a decrease in the prices of inputs that substitute for labor.
C)  an increase in the marginal product of labor resulting from technological change.
D)  an increase in the demand for the product produced by the industry.

Question 10

If the price of labor goes up and a firm replaces some workers with more machines, this is the _______ effect; when the price of a resource declines, and consequently the level of production rises, this is the _______ effect.

Accepted Answer

substituti...

Question 11

Use the following Table to answe the question :

-Marginal Revenue Product with one unit of labor would be

Accepted Answer

A)  $100.
B)  $140.
C)  $160.
D)  $260.
E)  None of the choices are correct.

Question 12

The substitution effect and the output effect work in the same direction.

Accepted Answer

A)  work in the same direction.
B)  work in opposite directions.
C)  are independent of one another, having nothing in common.
D)  None of these choices are correct.

Question 13

The demand for a resource is derived mainly from the demand for __________.

Accepted Answer

The answer of The demand for a resource is derived...

Question 14

A decline in the wage rate would

Accepted Answer

A)  raise the quantity of labor demanded.
B)  lower the quantity of labor demanded.
C)  increase the demand for labor.
D)  decrease the demand for labor.

Question 15

Which of the following offers the best example of derived demand?

Accepted Answer

A)  An increase in the demand for movie tickets causes an increase in the demand for popcorn.
B)  An increase in demand for movie tickets causes an increase in the demand for movie theatre workers.
C)  A decline in the demand for cars causes an increase in the demand for bus rides.
D)  An increase in the demand for cars causes an increase in the demand for gasoline.

Question 16

The demand for goods and services is called ____ demand, while the demand for resources is called ____ demand.

Accepted Answer

A)  derived; derived
B)  final; final
C)  final; derived
D)  derive; final

Question 17

Productivity is _________ per unit of __________.

Accepted Answer

A)  output; input
B)  input; output
C)  labor; capital
D)  None of these choices are true.

Question 18

Marginal output and marginal physical product are

Accepted Answer

A)  directly related.
B)  inversely related.
C)  weakly related.
D)  strongly related.
E)  identical.

Question 19

The additional output that one additional input of labor is responsible for is its

Accepted Answer

A)  marginal revenue product.
B)  marginal physical product.
C)  average revenue product.
D)  average physical product.

Question 20

The primary difference between marginal revenue product for the perfect and imperfect competitor is

Accepted Answer

A)  the determination of the output price.
B)  the effective use of capital.
C)  the differences in calculation of total revenue.
D)  the concept of marginal analysis.

Exam 14: Demand in the Factor Market

All of the following will increase the demand for labor by firms in an industry except

Correct AnswerverifiedShow Answer

The demand for a resource is derived mainly from the demand for __________.

Correct AnswerverifiedShow Answer

A rise in the wage rate would lead to a movement

Correct AnswerverifiedShow Answer

Productivity is _________ per unit of __________.

Correct AnswerverifiedShow Answer

Suppose that the marginal revenue product of the fourth acre of land is $180 and the rent paid on that land is $200 an acre. We can say that

Correct AnswerverifiedShow Answer

The primary difference between marginal revenue product for the perfect and imperfect competitor is

Correct AnswerverifiedShow Answer

The MRP curve for labor generally expresses

Correct AnswerverifiedShow Answer

The additional output that one additional input of labor is responsible for is its

Correct AnswerverifiedShow Answer

Use the following Table to answe the question : -Marginal Revenue Product with one unit of labor would be

Correct AnswerverifiedShow Answer

A decline in the wage rate would

Correct AnswerverifiedShow Answer

If the price of labor goes up and a firm replaces some workers with more machines, this is the _______ effect; when the price of a resource declines, and consequently the level of production rises, this is the _______ effect.

Correct Answerverifiedsubstituti...View AnswerShow Answer

Use the following Table to answer the question : -The maximum units of input you would possibly hire is

Correct AnswerverifiedShow Answer

Is the firm a perfect competitor or an imperfect competitor? Explain your answer in one sentence.

Correct AnswerverifiedAn imperfect competi...View AnswerShow Answer

Which of the following offers the best example of derived demand?

Correct AnswerverifiedShow Answer

Marginal output and marginal physical product are

Correct AnswerverifiedShow Answer

The demand for goods and services is called ____ demand, while the demand for resources is called ____ demand.

Correct AnswerverifiedShow Answer

In a perfectly competitive labor market, when a firm hires more labor

Correct AnswerverifiedShow Answer

As output rises,

Correct AnswerverifiedShow Answer

The substitution effect and the output effect work in the same direction.

Correct AnswerverifiedShow Answer

The most important influence on the marginal revenue product schedule for computer software engineers would be a change in

Correct AnswerverifiedShow Answer

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Productivity is _ per unit of __.

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If the price of labor goes up and a firm replaces some workers with more machines, this is the _ effect; when the price of a resource declines, and consequently the level of production rises, this is the _ effect.

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substituti...
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An imperfect competi...
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The demand for goods and services is called demand, while the demand for resources is called demand.

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