Chapter18 TheMarketsfortheFactorsofProduction

TestA
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Factorsofproductionarebestdefinedasthe a. wagespaidtotheworkforce. b. goodsandservicessoldinthemarket. c. outputproducedfromrawmaterials. d. inputsusedtoproducegoodsandservices. ANSWER:d. inputsusedtoproducegoodsandservices. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

Sinceafirmsdemandforafactorofproductioncomesfromitsdecisiontosupplyagoodinthe market,werefertothistypeofdemandas a. supplieddemand. b. deriveddemand. c. secondarydemand. d. differentiateddemand. ANSWER:b. deriveddemand. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

[Link] a. rent. b. wages. c. interest. d. profit. ANSWER:b. wages. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

Theproductionfunctiondescribestherelationshipbetween a. inputsandcost. b. outputsandprofit. c. inputsandoutputs. d. inputsandrevenue. ANSWER:c. inputsandoutputs. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

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Themarginalproductoflaborisdefinedastheincreasein a. revenueperadditionalunitofinput. b. outputperadditionalunitofinput. c. revenueperadditionalunitofoutput. d. outputperadditionalunitofrevenue. ANSWER:b. outputperadditionalunitofinput. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

Ifhiringmoreworkerscauseseachadditionalworkertocontributelesstothetotaloutput, a. diminishingprofitabilityispresent. b. increasingmarginalproductispresent. c. diminishingmarginalproductispresent. d. diminishingmarginalcostispresent. ANSWER:c. diminishingmarginalproductispresent. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

Thevalueofthemarginalproductoflaborisequaltothechangein a. marginalcostwiththeadditionofthelastworker. b. totalcostwiththeadditionofthelastworker. c. totalprofitwiththeadditionofthelastworker. d. totalrevenuewiththeadditionofthelastworker. ANSWER:d. totalrevenuewiththeadditionofthelastworker. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

Acompetitive,profitmaximizingfirmhiresworkersuntil a. thevalueofthemarginalproductequalsthewage. b. unemploymentratesarezero. c. marginalproductequalszero. d. marginalrevenueequalszero. ANSWER:a. thevalueofthemarginalproductequalsthewage. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

Aworkerscontributiontoafirmsrevenueismeasureddirectlybytheworkers a. contributiontooutput. b. valueofmarginalproduct. c. marginalproductminushis/herwage. d. marginalproductmultipliedbyhis/herwage. ANSWER:b. valueofmarginalproduct. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

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Aprofitmaximizingcompetitivefirmthatexperiencesdiminishingmarginalproductoflaborisalso experiencing a. anupwardslopingdemandforlabor. b. adownwardslopingdemandforlabor. c. aperfectlyelasticsupplyoflabor. d. aperfectlyinelasticsupplyoflabor. ANSWER:b. adownwardslopingdemandforlabor. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

Ifoneobservesaprofitmaximizingfirmincreasingemployment,itispossibletoinferthatthe a. firmisincreasingitsmarketshare. b. marginalproductisrising. c. wageexceedsthevalueofthemarginalproduct. d. valueofthemarginalproductexceedsthewage. ANSWER:d. valueofthemarginalproductexceedsthewage. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

Ifthepriceofairlineticketsrises,whatwillhappentothedemandcurveforflightattendants? a. Itwillshifttotheleft. b. Itwillshifttotheright. c. Therewillbeamovementalongthecurve. d. Itwillremainunchanged;pricechangesdonotshiftdemandcurves. ANSWER:b. Itwillshifttotheright. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

Whichofthefollowingeventswouldcauseanincreaseinthelaborsupplycurve? a. moremarriedwomendecidingtowork b. alowerSocialSecurityretirementage c. fewermarriedmendecidingtowork d. tighterrestrictionsonimmigrationpolicy ANSWER:a. moremarriedwomendecidingtowork TYPE:MKEY1:DSECTION:2OBJECTIVE:2RANDOM:Y

Whenlaborsupplyincreases, a. profitmaximizingfirmsreduceemployment. b. themarginalproductivityofworkersalwaysincreases. c. wagesincreaseaslongassupplyisupwardsloping. d. wagesdecreaseaslongaslabordemandisdownwardsloping. ANSWER:d. wagesdecreaseaslongaslabordemandisdownwardsloping. TYPE:MKEY1:DSECTION:2OBJECTIVE:2RANDOM:Y

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Whichofthefollowingcoulddecreaselabordemand? a. anincreaseinmigrantworkers b. adecreaseinthelaborsupply c. adecreaseindemandforthefinalproductproducedbylabor d. anincreaseinthemarginalproductivityofworkers ANSWER:c. adecreaseindemandforthefinalproductproducedbylabor TYPE:MKEY1:DSECTION:3OBJECTIVE:3RANDOM:Y

Whenfirmsareabletoincreasetheamountofphysicalcapitalavailabletoworkersthe a. valueofthemarginalproductoflaborwilldecrease. b. valueofthemarginalproductoflaborwillincrease. c. finalproductpricewillincrease. d. marginalproductoflaborwilldecline. ANSWER:b. valueofthemarginalproductoflaborwillincrease. TYPE:MKEY1:DSECTION:3OBJECTIVE:3RANDOM:Y

Wheneconomistsrefertoafirmscapital,theyarelikelytobeusingthetermtodescribethe a. marketsforfinalgoodsandservices. b. amountoffinancingprovidedbytheequitymarkets. c. stockofequipmentandbuildingsusedinproduction. d. amountofbankfinancingusedbythefirm. ANSWER:c. stockofequipmentandbuildingsusedinproduction. TYPE:MKEY1:DSECTION:4OBJECTIVE:4RANDOM:Y

Thepurchasepriceoflandis a. thepricereceivedfromtheflowofsomelandservices. b. thepriceapersonpaystoownthefactorofproduction. c. alwayslessthantherentalprice. d. thevalueofthelandtothefirmthistimeperiod. ANSWER:b. thepriceapersonpaystoownthefactorofproduction. TYPE:MKEY1:DSECTION:4OBJECTIVE:4RANDOM:Y

Themarginalproductofanyfactorofproductiondependson a. thepriceofthefinalgood. b. thequantityofthefactorused. c. thedemandforthefinalgood. d. whetheritisusedtoproduceagoodoraservice. ANSWER:b. thequantityofthefactorused. TYPE:MKEY1:DSECTION:4OBJECTIVE:5RANDOM:Y

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Asaresultofsevereflooding,[Link] toseethemarginalproductivityofhisland a. increase. b. decrease. c. becomenegative. d. remainunchanged. ANSWER:a. increase. TYPE:MKEY1:DSECTION:4OBJECTIVE:5RANDOM:Y

Thechangeinthesupplyofonefactor a. alterstheearningsofallfactors. b. willnotalterthemarginalproductivityofotherfactors,butmaylowertheirprice. c. willnotlowerthepriceofotherfactors,butmayaltertheirmarginalproductivity. d. willnotchangethevalueofmarginalproductforotherfactors. ANSWER:a. alterstheearningsofallfactors. TYPE:MKEY1:DSECTION:4OBJECTIVE:5RANDOM:Y Numberof Workers 0 1 2 3 4 5 Output 0 100 80 60 280 20 MarginalProduct ofLabor ValueofMarginal ProductofLabor $1000 $800 $400 Wage

$500 $500 $500 $500 $500

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Basedonthetableshown,whatisthemarginalproductofthefourthworker? a. 20 b. 40 c. 60 d. 80 ANSWER:b. 40 TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

Basedonthetableshown,howmanyworkerswillaprofitmaximizingfirmhire? a. 5 b. 4 c. 3 d. 2 ANSWER:c. 3 TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

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Fortheprofitmaximizingcompetitivefirm,thevalueofmarginalproductcurveis a. alwaysrising. b. thelaborsupplycurve. c. thelabordemandcurve. d. fallingonlywhenmarginalproductisrising. ANSWER:c. thelabordemandcurve. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

Thelaborsupplycurveisfundamentallyarepresentationofthetradeoffpeopleface betweenwhichofthefollowing? a. workandwage b. workandleisure c. wageandproductivity d. technologyandwage. ANSWER:b. workandleisure TYPE:MKEY1:DSECTION:2OBJECTIVE:2RANDOM:Y

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ANSWER:d. inputsusedtoproducegoodsandservices. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

ANSWER:b. deriveddemand. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

ANSWER:b. wages. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

ANSWER:c. inputsandoutputs. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

ANSWER:b. outputperadditionalunitofinput. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

ANSWER:c. diminishingmarginalproductispresent. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

ANSWER:d. totalrevenuewiththeadditionofthelastworker. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

ANSWER:a. thevalueofthemarginalproductequalsthewage. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

ANSWER:b. valueofmarginalproduct. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

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ANSWER:b. adownwardslopingdemandforlabor. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

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ANSWER:d. valueofthemarginalproductexceedsthewage. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

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ANSWER:b. Itwillshifttotheright. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

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ANSWER:a. moremarriedwomendecidingtowork TYPE:MKEY1:DSECTION:2OBJECTIVE:2RANDOM:Y

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ANSWER:d. wagesdecreaseaslongaslabordemandisdownwardsloping. TYPE:MKEY1:DSECTION:2OBJECTIVE:2RANDOM:Y

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ANSWER:c. adecreaseindemandforthefinalproductproducedbylabor TYPE:MKEY1:DSECTION:3OBJECTIVE:3RANDOM:Y

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ANSWER:b. valueofthemarginalproductoflaborwillincrease. TYPE:MKEY1:DSECTION:3OBJECTIVE:3RANDOM:Y

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ANSWER:c. stockofequipmentandbuildingsusedinproduction. TYPE:MKEY1:DSECTION:4OBJECTIVE:4RANDOM:Y

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ANSWER:b. thepriceapersonpaystoownthefactorofproduction. TYPE:MKEY1:DSECTION:4OBJECTIVE:4RANDOM:Y

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ANSWER:b. thequantityofthefactorused. TYPE:MKEY1:DSECTION:4OBJECTIVE:5RANDOM:Y

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ANSWER:a. increase. TYPE:MKEY1:DSECTION:4OBJECTIVE:5RANDOM:Y

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ANSWER:a. alterstheearningsofallfactors. TYPE:MKEY1:DSECTION:4OBJECTIVE:5RANDOM:Y

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ANSWER:b. 40 TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

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ANSWER:c. 3 TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

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ANSWER:c. thelabordemandcurve. TYPE:MKEY1:DSECTION:1OBJECTIVE:1RANDOM:Y

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ANSWER:b. workandleisure TYPE:MKEY1:DSECTION:2OBJECTIVE:2RANDOM:Y