Question 1

A worker will become indifferent between spending the next hour on work or leisure if the benefit of another hour of work is:

Accepted Answer

A)  greater than the opportunity cost.
B)  exactly equal to the opportunity cost.
C)  less than the opportunity cost.
D)  The supply of labor is unique and does not involved weighing costs and benefits.E) B) and C)
F) None of the above

Question 2

Tom has a PhD in history and teaches at the local college where he earns $75,000 a year.Truth be told,Tom loves teaching so much,he would gladly do it for $45,000.Which of the following can be said?

Accepted Answer

A)  Tom's economic rent is worth $30,000.
B)  Tom's producer surplus is worth $30,000.
C)  The value of Tom's marginal product is $75,000.
D)  All of these statements are true.E) A) and C)
F) B) and C)

Question 3

The demand for factor inputs:

Accepted Answer

A)  depends upon the market for the good which it is used to produce.
B)  is referred to as a derived demand.
C)  depends on how much they contribute to the value of the end product.
D)  All of these statements are true.E) C) and D)
F) A) and B)

Question 4

The relationship between the quantity of inputs and the quantity of outputs is called:

Accepted Answer

A)  a production function.
B)  a cost function.
C)  a profit function.
D)  a resource function.E) All of the above
F) None of the above

Question 5

Economists refer to the pattern of income that people derive from different factors of production as the:

Accepted Answer

A)  factor distribution of income.
B)  factor price.
C)  factor stream of income.
D)  expected future factor value.E) A) and B)
F) None of the above

Question 6

An example of human capital is:

Accepted Answer

A)  a sensitive palate.
B)  extreme agility.
C)  a PhD in economics.
D)  All of these are examples of human capital.E) None of the above
F) C) and D)

Question 7

Farming in poor countries is considered to be:

Accepted Answer

A)  labor intensive.
B)  capital intensive.
C)  production intensive.
D)  cost intensive.E) A) and B)
F) A) and C)

Question 8

If the output labor produces experiences a decrease in demand,the value of marginal product of labor will:

Accepted Answer

A)  increase,increasing the demand for labor.
B)  increase,decreasing the demand for labor.
C)  decrease,increasing the demand for labor.
D)  decrease,decreasing the demand for labor.E) All of the above
F) A) and D)

Question 9

For any competitive labor market,changes that increase the opportunity cost of work will:

Accepted Answer

A)  decrease the labor supply and shift the supply curve left.
B)  increase the labor supply and shift the supply curve right.
C)  decrease the labor supply and shift the supply curve right.
D)  increase the labor supply and shift the supply curve left.E) B) and C)
F) A) and C)

Question 10

Eli is headed to his job harvesting grapes at a local vineyard.He earns $8 every hour he works there.His friend calls him and asks him to go mountain biking for the next 2 hours instead.Eli cannot decide between the two activities.His indecision implies he values riding his mountain bike for two hours:

Accepted Answer

A)  more than $16.
B)  less than $16.
C)  at exactly $16.
D)  at no more than $8.E) A) and D)
F) B) and D)

Question 11

If Sam receives a pay cut and the income effect outweighs the price effect on his labor supply decision,he will:

Accepted Answer

A)  work more hours.
B)  work less hours.
C)  work the same hours no matter what.
D)  quit and not work at all.E) A) and B)
F) A) and C)

Question 12

When considering the factor distribution of income,which of the following income would go to owners of physical capital?

Accepted Answer

A)  Corporate profits
B)  Interest
C)  Rent
D)  All of these go to owners of physical capital.E) All of the above
F) A) and D) D

Question 13

Minimum wage laws are:

Accepted Answer

A)  a price floor.
B)  a price ceiling.
C)  a customary norm without legal structure or protection.
D)  None of these statements is true.E) B) and C)
F) A) and D)

Question 14

A decrease in the quantity of labor supplied in response to a higher wage would be due to the:

Accepted Answer

A)  income effect.
B)  substitution effect.
C)  price effect.
D)  This type of occurrence would never happen.E) A) and C)
F) None of the above

Question 15

Which of the following has a production process that would be considered capital intensive?

Accepted Answer

A)  Auto manufacturing
B)  A chorale
C)  Police detective work
D)  All of these production processes are capital intensive.E) B) and C)
F) A) and D)

Question 16

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) None of the above
F) All of the above A

Question 17

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 have to offer higher wages to attract the workers they need.
C)  there won't be enough workers willing to work at that wage.
D)  All of these statements are true.E) A) and C)
F) C) and D)

Question 18

The price effect describes:

Accepted Answer

A)  the increase in the quantity of labor supplied in response to a higher wage.
B)  the decrease in the quantity of labor supplied in response to a higher wage.
C)  the increase in the quantity of supplied in response to a lower wage.
D)  None of these statements is true.E) B) and D)
F) None of the above A

Question 19

The factor distribution of income:

Accepted Answer

A)  shows how much income people get from labor compared to land and capital.
B)  refers to the pattern of income that people derive from different factors of production.
C)  hasn't changed substantially in the last century in the United States.
D)  All of these statements are true.E) All of the above
F) A) and D)

Question 20

The market labor-supply curve:

Accepted Answer

A)  is upward sloping.
B)  reflects people's willingness to work more when wages are higher.
C)  shows the relationship between the price of labor and the quantity supplied.
D)  All of these statements are true.E) A) and D)
F) All of the above

Exam 16: The Factors of Production

A worker will become indifferent between spending the next hour on work or leisure if the benefit of another hour of work is:

Correct Answer
verified

Tom has a PhD in history and teaches at the local college where he earns $75,000 a year.Truth be told,Tom loves teaching so much,he would gladly do it for $45,000.Which of the following can be said?

Correct Answer
verified

The demand for factor inputs:

Correct Answer
verified

The relationship between the quantity of inputs and the quantity of outputs is called:

Correct Answer
verified

Economists refer to the pattern of income that people derive from different factors of production as the:

Correct Answer
verified

An example of human capital is:

Correct Answer
verified

Farming in poor countries is considered to be:

Correct Answer
verified

If the output labor produces experiences a decrease in demand,the value of marginal product of labor will:

Correct Answer
verified

For any competitive labor market,changes that increase the opportunity cost of work will:

Correct Answer
verified

Correct Answer
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If Sam receives a pay cut and the income effect outweighs the price effect on his labor supply decision,he will:

Correct Answer
verified

When considering the factor distribution of income,which of the following income would go to owners of physical capital?

Correct Answer
verified
D

Minimum wage laws are:

Correct Answer
verified

A decrease in the quantity of labor supplied in response to a higher wage would be due to the:

Correct Answer
verified

Which of the following has a production process that would be considered capital intensive?

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

Correct Answer
verified
A

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

Correct Answer
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The price effect describes:

Correct Answer
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A

The factor distribution of income:

Correct Answer
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The market labor-supply curve:

Correct Answer
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Exam 16: The Factors of Production

A worker will become indifferent between spending the next hour on work or leisure if the benefit of another hour of work is:

Correct AnswerverifiedShow Answer

Tom has a PhD in history and teaches at the local college where he earns $75,000 a year.Truth be told,Tom loves teaching so much,he would gladly do it for $45,000.Which of the following can be said?

Correct AnswerverifiedShow Answer

The demand for factor inputs:

Correct AnswerverifiedShow Answer

The relationship between the quantity of inputs and the quantity of outputs is called:

Correct AnswerverifiedShow Answer

Economists refer to the pattern of income that people derive from different factors of production as the:

Correct AnswerverifiedShow Answer

An example of human capital is:

Correct AnswerverifiedShow Answer

Farming in poor countries is considered to be:

Correct AnswerverifiedShow Answer

If the output labor produces experiences a decrease in demand,the value of marginal product of labor will:

Correct AnswerverifiedShow Answer

For any competitive labor market,changes that increase the opportunity cost of work will:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If Sam receives a pay cut and the income effect outweighs the price effect on his labor supply decision,he will:

Correct AnswerverifiedShow Answer

When considering the factor distribution of income,which of the following income would go to owners of physical capital?

Correct AnswerverifiedD

Minimum wage laws are:

Correct AnswerverifiedShow Answer

A decrease in the quantity of labor supplied in response to a higher wage would be due to the:

Correct AnswerverifiedShow Answer

Which of the following has a production process that would be considered capital intensive?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedA

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

Correct AnswerverifiedShow Answer

The price effect describes:

Correct AnswerverifiedA

The factor distribution of income:

Correct AnswerverifiedShow Answer

The market labor-supply curve:

Correct AnswerverifiedShow Answer

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D

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A

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A

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