Question 1

The trade-off between work and leisure underlying the supply of labor involves the substitution effect and the _____ effect.

Accepted Answer

A)  production
B)  elasticity
C)  income
D)  complementaryE) All of the above
F) A) and C)

Question 2

If the age at which a person can receive Social Security benefits increases from 67 to 70,the supply of labor will increase.

Accepted Answer

A) True 
 B)False

Question 3

The opportunity cost of an extra hour of leisure is:

Accepted Answer

A)  $1.
B)  the hourly wage rate.
C)  the same as the price of money.
D)  always less than the value of the marginal product of labor.E) C) and D)
F) None of the above

Question 4

The marginal product times product price equals the:

Accepted Answer

A)  marginal revenue.
B)  value of the marginal product.
C)  additional revenue product.
D)  marginal cost.E) B) and D)
F) B) and C)

Question 5

Which statement is TRUE?

Accepted Answer

A)  The marginal product is the change in total revenue divided by a one-unit change in a factor.
B)  The marginal revenue is the change in total output divided by the change in output.
C)  The value of the marginal product is the marginal product times the price.
D)  The marginal cost is equal to the average total cost.E) B) and C)
F) C) and D)

Question 6

An increase in wealth will cause the labor supply curve to:

Accepted Answer

A)  shift leftward if leisure is a normal good.
B)  slope downward if the substitution effect dominates the income effect.
C)  slope upward only if leisure is an inferior good.
D)  bend backward if the income effect outweighs the substitution effect of a change in wealth and if leisure is a normal good.E) None of the above
F) A) and B)

Question 7

Manufactured resources such as equipment,buildings,and tools are also known as:

Accepted Answer

A)  human capital.
B)  labor.
C)  physical capital.
D)  natural resources.E) B) and C)
F) C) and D)

Question 8

Use the following to answer question:
Figure: The Value of the Marginal Product Curve 
-(Figure: The Value of the Marginal Product Curve) Use Figure: The Value of the Marginal Product Curve.In the figure,if the market wage rate increases,then the:

Accepted Answer

A)  VMPL curve will shift to the right.
B)  profit-maximizing quantity of labor will increase.
C)  VMPL curve will shift to the left.
D)  profit-maximizing quantity of labor will decrease.E) B) and C)
F) A) and B)

Question 9

If a firm hires labor and with its current employees W = VMPL,then profit:

Accepted Answer

A)  is maximized.
B)  can be increased by hiring less labor.
C)  can be increased by hiring more labor.
D)  can be increased by increasing the wage rate.E) All of the above
F) None of the above

Question 10

People who have higher levels of human capital will tend to:

Accepted Answer

A)  work only in nonunion jobs.
B)  receive higher salaries than do those who have lower levels of human capital.
C)  earn salaries based on marginal costs of their labor.
D)  earn salaries higher than their value of marginal product.E) A) and D)
F) None of the above

Question 11

Use the following to answer question:
Figure: The Demand for Bricklayers 
-(Figure: The Demand for Bricklayers) Use Figure: The Demand for Bricklayers.If there is an increase in technology that increases the productivity of bricklayers,then the value of the marginal product of the sixth bricklayer will be _____ than _____.

Accepted Answer

A)  less;$80
B)  greater;$100
C)  less;$60
D)  greater;$110E) All of the above
F) A) and D)

Question 12

Use the following to answer question: 
-(Table: Employment and Output) Use Table: Employment and Output.In the table,if the price of a bushel of wheat is $10,then the value of the marginal product of the fifth worker is:

Accepted Answer

A)  $11.
B)  $110.
C)  $90.
D)  $750.E) A) and B)
F) None of the above

Question 13

Wage differences across jobs that reflect the fact that some jobs are less pleasant than others are called:

Accepted Answer

A)  efficiency wages.
B)  market power.
C)  compensating differentials.
D)  discrimination.E) B) and C)
F) C) and D)

Question 14

Which group had the HIGHEST median earnings in the U.S.labor market in 2015?

Accepted Answer

A)  White men
B)  women,regardless of ethnicity
C)  African-Americans
D)  HispanicsE) None of the above
F) B) and D)

Question 15

Suppose there are diminishing returns to labor.If the _____ of labor hired by a firm increases,holding everything else constant,the _____ labor will _____.

Accepted Answer

A)  price;demand for;increase
B)  quantity;marginal product of;fall
C)  quantity;marginal product of;rise
D)  quantity;value of the marginal product of;riseE) A) and B)
F) All of the above

Question 16

Factors of production are different from inputs in that factors of production:

Accepted Answer

A)  can be used over and over again,but inputs cannot.
B)  can be used only once,whereas an input can be used over and over again.
C)  refer only to labor,while inputs refer to machinery.
D)  encompass only land and other natural factors,while inputs are ingredients.E) B) and D)
F) B) and C)

Question 17

The firm's value of the marginal product of labor curve:

Accepted Answer

A)  is the firm's demand curve for labor.
B)  is the industry's demand curve for labor.
C)  is the same as the marginal cost curve for labor.
D)  slopes upward.E) A) and B)
F) None of the above

Question 18

In the United States in 2015,approximately _____% of total income in the economy took the form of compensation of employees.

Accepted Answer

A)  40
B)  9
C)  90
D)  70E) C) and D)
F) B) and D)

Question 19

The marginal productivity theory of income distribution assumes that factor markets are:

Accepted Answer

A)  monopolies.
B)  oligopolies.
C)  perfectly competitive.
D)  allowed to pay only the wages that government approves.E) A) and B)
F) A) and C)

Question 20

According to the marginal productivity theory of income distribution,if a unit of labor is paid more than a unit of capital,it is because,at the equilibrium quantity of each factor,the value of the marginal product of labor is equal to the value of the marginal product of capital.

Accepted Answer

A) True 
 B)False

Exam 19: Factor Markets and the Distribution of Income

An increase in wealth will cause the labor supply curve to:

Correct Answer
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If a firm hires labor and with its current employees W = VMPL,then profit:

Correct Answer
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People who have higher levels of human capital will tend to:

Correct Answer
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The trade-off between work and leisure underlying the supply of labor involves the substitution effect and the _____ effect.

Correct Answer
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The opportunity cost of an extra hour of leisure is:

Correct Answer
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The marginal productivity theory of income distribution assumes that factor markets are:

Correct Answer
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Wage differences across jobs that reflect the fact that some jobs are less pleasant than others are called:

Correct Answer
verified

Use the following to answer question: -(Table: Employment and Output) Use Table: Employment and Output.In the table,if the price of a bushel of wheat is $10,then the value of the marginal product of the fifth worker is:

Correct Answer
verified

If the age at which a person can receive Social Security benefits increases from 67 to 70,the supply of labor will increase.

Correct Answer
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According to the marginal productivity theory of income distribution,if a unit of labor is paid more than a unit of capital,it is because,at the equilibrium quantity of each factor,the value of the marginal product of labor is equal to the value of the marginal product of capital.

Correct Answer
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Which statement is TRUE?

Correct Answer
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Use the following to answer question: Figure: The Value of the Marginal Product Curve -(Figure: The Value of the Marginal Product Curve) Use Figure: The Value of the Marginal Product Curve.In the figure,if the market wage rate increases,then the:

Correct Answer
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Correct Answer
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Manufactured resources such as equipment,buildings,and tools are also known as:

Correct Answer
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Suppose there are diminishing returns to labor.If the ___ of labor hired by a firm increases,holding everything else constant,the _ labor will ___.

Correct Answer
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Which group had the HIGHEST median earnings in the U.S.labor market in 2015?

Correct Answer
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The firm's value of the marginal product of labor curve:

Correct Answer
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In the United States in 2015,approximately _____% of total income in the economy took the form of compensation of employees.

Correct Answer
verified

Factors of production are different from inputs in that factors of production:

Correct Answer
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The marginal product times product price equals the:

Correct Answer
verified

Exam 19: Factor Markets and the Distribution of Income

An increase in wealth will cause the labor supply curve to:

Correct AnswerverifiedShow Answer

If a firm hires labor and with its current employees W = VMPL,then profit:

Correct AnswerverifiedShow Answer

People who have higher levels of human capital will tend to:

Correct AnswerverifiedShow Answer

The trade-off between work and leisure underlying the supply of labor involves the substitution effect and the _____ effect.

Correct AnswerverifiedShow Answer

The opportunity cost of an extra hour of leisure is:

Correct AnswerverifiedShow Answer

The marginal productivity theory of income distribution assumes that factor markets are:

Correct AnswerverifiedShow Answer

Wage differences across jobs that reflect the fact that some jobs are less pleasant than others are called:

Correct AnswerverifiedShow Answer

Use the following to answer question: -(Table: Employment and Output) Use Table: Employment and Output.In the table,if the price of a bushel of wheat is $10,then the value of the marginal product of the fifth worker is:

Correct AnswerverifiedShow Answer

If the age at which a person can receive Social Security benefits increases from 67 to 70,the supply of labor will increase.

Correct AnswerverifiedShow Answer

According to the marginal productivity theory of income distribution,if a unit of labor is paid more than a unit of capital,it is because,at the equilibrium quantity of each factor,the value of the marginal product of labor is equal to the value of the marginal product of capital.

Correct AnswerverifiedShow Answer

Which statement is TRUE?

Correct AnswerverifiedShow Answer

Use the following to answer question: Figure: The Value of the Marginal Product Curve -(Figure: The Value of the Marginal Product Curve) Use Figure: The Value of the Marginal Product Curve.In the figure,if the market wage rate increases,then the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Manufactured resources such as equipment,buildings,and tools are also known as:

Correct AnswerverifiedShow Answer

Suppose there are diminishing returns to labor.If the _____ of labor hired by a firm increases,holding everything else constant,the _____ labor will _____.

Correct AnswerverifiedShow Answer

Which group had the HIGHEST median earnings in the U.S.labor market in 2015?

Correct AnswerverifiedShow Answer

The firm's value of the marginal product of labor curve:

Correct AnswerverifiedShow Answer

In the United States in 2015,approximately _____% of total income in the economy took the form of compensation of employees.

Correct AnswerverifiedShow Answer

Factors of production are different from inputs in that factors of production:

Correct AnswerverifiedShow Answer

The marginal product times product price equals the:

Correct AnswerverifiedShow Answer

Correct Answer
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Suppose there are diminishing returns to labor.If the ___ of labor hired by a firm increases,holding everything else constant,the _ labor will ___.

Correct Answer
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