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Exam 18: The Markets for the Factors of Production

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Question 221

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The value of the marginal product of labor is equal to the change in

A) marginal cost caused by the addition of the last worker.
B) total cost caused by the addition of the last worker.
C) total revenue caused by the addition of the last worker.
D) total profit caused by the addition of the last worker.

E) A) and B)
F) All of the above

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Question 222

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If Sharnae's individual labor supply curve is backward sloping, then Sharnae responds to an increase in her

A) wage by working fewer hours per week.
B) opportunity cost of leisure by taking more hours of leisure per week.
C) wage by working more hours per week.
D) Both a and b are correct.

E) All of the above
F) A) and D)

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Question 223

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Figure 18-1. The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. -Refer to Figure 18-1. If the shop charges $150 per repair and pays each of its mechanics a wage of $700 per day, then what is the marginal profit of the second mechanic?

The labor supply curve reflects how workers' decisions about the labor-leisure tradeoff respond to changes in the opportunity cost of leisure.

Figure 18-5 The figure shows a particular profit-maximizing, competitive firm's value-of-marginal-product (VMP) curve. On the horizontal axis, L represents the number of workers. The time frame is daily. -Refer to Figure 18-5. Suppose one point on the firm's production function is (L = 3, Q = 180) , where L = number of workers and Q = quantity of output. If the firm sells its output for $5 per unit, then

Consider the labor market for computer programmers. During the late 1990s, the value of the marginal product of all computer programmers increased dramatically. Holding all else equal, what effect did this process have on the labor market for computer programmers? The equilibrium wage

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

Table 18-12 The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. -Refer to Table 18-12. If the value of the marginal product of the first worker hired is $938, then how many workers does the firm employ?

Table 18-10 -Refer to Table 18-10. This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor. Each baseball sells for $2.50 in a competitive market. What is the marginal revenue product of the fourth worker?

Suppose an influenza pandemic were to significantly decrease the population of a country. We would predict a decrease in the marginal product of land in that country.

If a worker responds to an increase in the opportunity cost of leisure by taking more leisure, then her labor supply curve is

Owners of land are compensated according to the

If the output price of a product rises, the demand for capital will increase, raising the rental price of capital.

Scenario 18-3 Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $13 per hour. During the summer, he drives a tour bus around the ski resort, earning $11 per hour. -Refer to Scenario 18-3. During the winter months, what is Sam's opportunity cost of taking an hour off work to go skiing?

When you receive interest on your bank account, that income is part of the economy's __________ income.

When firms are able to increase the amount of physical capital available to workers, the

Rob was the last worker hired by a firm that is competitive in the labor market. The labor market always is in equilibrium. Rob's wage is $30 per hour. When Rob was hired, the firm's output increased by 4 units per hour as a result. For what price does the firm sell its output?

Suppose the government designates certain areas within a community to be "wetlands," making it illegal to build on the land. What happens to land not classified as "wetlands" within the community? (i) The price of non-wetland land will rise. (ii) The marginal product of non-wetland land will fall. (iii) The marginal product of non-wetland land will rise.

Consider the labor market for short-order cooks. A shortage in the availability of frying pans will cause

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium quantity of doctors will