Question 1

The labor-supply curve will be downward sloping if the:

Accepted Answer

A)   income effect outweighs the price effect.
B)   price effect outweighs the income effect.
C)   substitution effect outweighs the income effect.
D)   The labor-supply curve is never downward sloping.E) C) and D)
F) A) and B)

Question 2

If wages drop below the market equilibrium level in a competitive labor market:

Accepted Answer

A)   firms will demand more labor than workers are willing to supply.
B)   firms will be able to offer lower wages and still fill all the jobs they have.
C)   unemployment will persist until the wage increases.
D)   All of these statements are true.E) A) and B)
F) A) and C)

Question 3

The demand for factors of production is referred to as:

Accepted Answer

A)   primary demand.
B)   derived demand.
C)   implied demand.
D)   production demand.E) A) and D)
F) A) and C)

Question 4

If the demand for oranges falls,as a result,it is highly likely that the demand for:

Accepted Answer

A)   orange juice will fall.
B)   orange grove workers will fall.
C)   apples will increase.
D)   apple orchard workers will decrease.E) B) and D)
F) A) and B)

Question 5

An efficiency wage is a wage that:

Accepted Answer

A)   the government sets deliberately above the market rate to increase equity.
B)   most unionized workers negotiate to get rid of.
C)   is deliberately set above the market rate to increase worker productivity.
D)   is set right at market equilibrium which creates an efficient labor market.E) A) and B)
F) None of the above

Question 6

When the U.S.cuts funding for border patrol,the labor market in California is affected.We would expect the:

Accepted Answer

A)   supply of labor to shift to the right.
B)   supply of labor to shift to the left.
C)   demand for labor to shift to the right.
D)   demand for labor to shift to the left.E) A) and D)
F) B) and C)

Question 7

The evidence on how minimum wage laws affect the real world:

Accepted Answer

A)   is mixed.
B)   shows clearly that such price floors cause unemployment.
C)   shows clearly that there is simply a transfer of surplus from employer to worker.
D)   None of these statements is true.E) A) and B)
F) All of the above

Question 8

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)   Workers.E) B) and C)
F) A) and B)

Question 9

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) C) and D)
F) None of the above

Question 10

An example of human capital is:

Accepted Answer

A)   plumbing skills.
B)   a wrench.
C)   a manual on how to install a sink.
D)   a wedding dress.E) A) and B)
F) B) and C) A

Question 11

For a competitive firm,the marginal revenue product is:

Accepted Answer

A)   always positive and nears zero as quantity increases.
B)   always negative and nears zero as quantity increases.
C)   zero when profits are maximized.
D)   decreasing eventually as quantity increases.E) All of the above
F) C) and D)

Question 12

Minimum wages are:

Accepted Answer

A)   not very controversial.
B)   always needed to guarantee workers an acceptable standard of living.
C)   a form of government interference in the free market.
D)   only enforceable at the federal level.E) B) and D)
F) A) and D) C

Question 13

The ingredients that go into making any good or service are called the:

Accepted Answer

A)   output makers.
B)   factors of production.
C)   factors of output.
D)   production ingredients.E) None of the above
F) All of the above

Question 14

If the income effect outweighs the price effect of a wage increase,the labor-supply curve will:

Accepted Answer

A)   slope upward.
B)   slope downward.
C)   be perfectly flat.
D)   be perfectly horizontal.E) A) and D)
F) A) and B)

Question 15

If adopted by a firm,a labor-augmenting piece of technology is one that would:

Accepted Answer

A)   increase labor demand.
B)   increase labor supply.
C)   decrease labor demand.
D)   decrease labor supply.E) None of the above
F) A) and D)

Question 16

The set of skills,knowledge,experience,and talent that determine the productivity of workers is called:

Accepted Answer

A)   human capital.
B)   physical capital.
C)   capital per worker.
D)   worker per capita.E) B) and C)
F) A) and C)

Question 17

If the graph shown is displaying a competitive market and the market is currently offering a wage less than P*:

Accepted Answer

A)   there would be excess workers who want to work at that wage.
B)   there would be unemployment in the market.
C)   firms will have a hard time finding employees.
D)   firms would be forced by government to adjust their wages back to equilibrium.E) A) and B)
F) B) and D)

Question 18

The question of how much labor a firm will hire comes down to:

Accepted Answer

A)   whether added workers are going to generate more revenue than what it costs to hire them.
B)   if the added workers are going to add revenues to the firm.
C)   whether the value of the marginal product is greater than, less than, or equal to the average total cost.
D)   the healthcare costs they incur by hiring them.E) B) and C)
F) None of the above

Question 19

If the graph shown is displaying a competitive market and the market is currently offering a wage more than P*:

Accepted Answer

A)   there would be a surplus of workers who want to work at that wage.
B)   there would not be unemployment in the market.
C)   firms would have a hard time finding workers.
D)   equilibrium would be achieved.E) A) and D)
F) B) and C) A

Question 20

If the U.S.experiences an enormous surge of immigration,we could predict it would make the labor supply:

Accepted Answer

A)   decrease and shift to the right.
B)   increase and shift to the right.
C)   increase and shift to the left.
D)   decrease and shift to the left.E) B) and D)
F) A) and C)

Exam 16: The Factors of Production

The labor-supply curve will be downward sloping if the:

Correct AnswerverifiedShow Answer

If wages drop below the market equilibrium level in a competitive labor market:

Correct AnswerverifiedShow Answer

The demand for factors of production is referred to as:

Correct AnswerverifiedShow Answer

If the demand for oranges falls,as a result,it is highly likely that the demand for:

Correct AnswerverifiedShow Answer

An efficiency wage is a wage that:

Correct AnswerverifiedShow Answer

When the U.S.cuts funding for border patrol,the labor market in California is affected.We would expect the:

Correct AnswerverifiedShow Answer

The evidence on how minimum wage laws affect the real world:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An example of human capital is:

Correct AnswerverifiedA

For a competitive firm,the marginal revenue product is:

Correct AnswerverifiedShow Answer

Minimum wages are:

Correct AnswerverifiedC

The ingredients that go into making any good or service are called the:

Correct AnswerverifiedShow Answer

If the income effect outweighs the price effect of a wage increase,the labor-supply curve will:

Correct AnswerverifiedShow Answer

If adopted by a firm,a labor-augmenting piece of technology is one that would:

Correct AnswerverifiedShow Answer

The set of skills,knowledge,experience,and talent that determine the productivity of workers is called:

Correct AnswerverifiedShow Answer

If the graph shown is displaying a competitive market and the market is currently offering a wage less than P*:

Correct AnswerverifiedShow Answer

The question of how much labor a firm will hire comes down to:

Correct AnswerverifiedShow Answer

If the graph shown is displaying a competitive market and the market is currently offering a wage more than P*:

Correct AnswerverifiedA

If the U.S.experiences an enormous surge of immigration,we could predict it would make the labor supply:

Correct AnswerverifiedShow Answer

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A

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C

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A

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