Question 1

The marginal revenue product of labor and the marginal resource cost of labor are both measured in the same units, that is, in dollars per unit of labor.

Accepted Answer

A) True 
 B)False

Question 2

For a firm selling its product in a purely competitive market, the marginal revenue product of labor can be found by

Accepted Answer

A)  adding marginal product to total product as one more unit of labor is employed.
B)  adding marginal revenue to total product as one more unit of labor is employed.
C)  multiplying marginal product by product price.
D)  dividing marginal product by product price.E) A) and B)
F) B) and D)

Question 3

Hiring the profit-maximizing combination of resources ensures that production costs will be minimized.

Accepted Answer

A) True 
 B)False

Question 4

Assume the price of capital doubles and, as a result, firms make no change in the relative quantities of capital and labor they employ.This implies that

Accepted Answer

A)  labor is not readily substitutable for capital.
B)  the law of diminishing returns is not applicable.
C)  the firms are producing an inferior good.
D)  the demand for capital is highly price elastic.E) A) and B)
F) All of the above

Question 5

A profit-maximizing firm will use additional units of resources for production until

Accepted Answer

A)  total, average, and marginal cost are equal.
B)  total, average, and marginal revenue are equal.
C)  the marginal revenue product equals the marginal resource cost.
D)  the marginal revenue product is greater than the marginal resource cost.E) A) and B)
F) A) and C)

Question 6

A firm's demand curve for labor

Accepted Answer

A)  is its marginal product curve.
B)  will shift to the left if the price of the product the labor is producing should fall.
C)  is perfectly elastic if the firm is selling its product in a purely competitive market.
D)  reflects a direct (positive)  relationship between the number of workers hired and the money wage rate.E) C) and D)
F) A) and D)

Question 7

Which of the following will not cause a shift in the demand for resource X?

Accepted Answer

A)  a decline in the price of resource X
B)  an increase in the price of the product that resource X is producing
C)  a decrease in the price of substitute resource Y
D)  an increase in the productivity of resource XE) All of the above
F) C) and D)

Question 8

The introduction of automatic elevator equipment allowed firms to handle the movement of people in a multistory building at less cost, thus decreasing the demand for elevator operators.The best explanation for this change is that the

Accepted Answer

A)  marginal product of elevator operators was equal to its price.
B)  marginal product of automatic elevator equipment was equal to its price.
C)  marginal product of automatic elevator equipment divided by its price was greater than that for elevator operators.
D)  marginal product of elevator operators divided by its price was greater than that for automatic elevator equipment.Blooms: UnderstandE) A) and B)
F) All of the above

Question 9

A profit-maximizing firm will employ labor up to the point where the

Accepted Answer

A)  MRP of labor = MRC of labor.
B)  MP of labor = MRC of labor.
C)  MC = MRP.
D)  MP = MC.E) All of the above
F) None of the above

Question 10

A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits.It is currently operating in the elastic range of its MRP curve.If the wage rate increases, its total spending on wages at the new equilibrium will

Accepted Answer

A)  be larger.
B)  be smaller.
C)  be unchanged.
D)  change in an undetermined direction.E) A) and B)
F) A) and C)

Question 11

Other things being equal, how would the market for tablet computers be affected by a large increase in productivity in the tablet-computer industry?

Accepted Answer

A)  a decrease in price and a leftward movement along the supply curve
B)  a decrease in price and a rightward movement along the demand curve
C)  a decrease in price and a rightward movement along the supply curve
D)  an increase in price and a rightward movement along the demand curveE) A) and B)
F) A) and C)

Question 12

Which of the following is equivalent to the costs that firms incur in acquiring economic resources?

Accepted Answer

A)  revenues from the product
B)  income of the resources
C)  money flowing from the resources
D)  profits from the resources employedE) C) and D)
F) B) and D)

Question 13

Marginal revenue product (MRP) is the change in total product (total output) associated with hiring an additional unit of labor.

Accepted Answer

A) True 
 B)False

Question 14

If a firm pays labor $5 and receives an MPL of 10, while paying capital $100 and receiving an MPC of 100, to lower production costs it should hire more labor and less capital.

Accepted Answer

A) True 
 B)False

Question 15

A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired.The farmer's product sells for $3 per unit, and the wage rate is $13 per worker.The marginal product of the second worker is

Accepted Answer

A)  24.
B)  8.
C)  5.
D)  1.E) B) and D)
F) A) and D)

Question 16

Which type of occupation is expected by the U.S.Bureau of Labor Statistics to be the fastest growing from 2014 to 2024 ?

Accepted Answer

A)  manufacturing
B)  service
C)  construction
D)  miningE) None of the above
F) All of the above

Question 17

The U.S.Bureau of Labor Statistics expects demand for labor in the textile and apparel sector to decline, largely because of

Accepted Answer

A)  decreasing demand for textiles and apparel.
B)  falling wages in this sector.
C)  import competition in the sector.
D)  rising wages for textile and apparel workers.E) C) and D)
F) B) and C)

Question 18

The marginal revenue product schedule is

Accepted Answer

A)  the same whether the firm is selling in a purely competitive or imperfectly competitive market.
B)  the firm's resource demand schedule.
C)  the firm's resource supply schedule.
D)  upsloping.E) C) and D)
F) B) and D)

Question 19

A profit-maximizing firm should hire an input as long as the

Accepted Answer

A)  firm can increase its total revenue.
B)  price of the input doesn't exceed the price of the other inputs used in the firm's production.
C)  marginal revenue product of the input is at least as much as the cost of hiring the input.
D)  marginal revenue product of the input is greater than the marginal revenue product of other inputs the firm is using.E) B) and C)
F) All of the above

Question 20

(Last Word)  The rapid spread of ATMs

Accepted Answer

A)  dramatically reduced employment of bank tellers, and demand remains low because ATMs serve the same functions as bank tellers.
B)  has resulted in the closure of many bank branches and led to a long-term decline in employment of bank tellers.
C)  reduced the demand for bank tellers initially, but eventually tellers took on tasks that ATMs are not suited to handle.
D)  has had no discernible impact on the demand for bank tellers.E) A) and B)
F) All of the above

Exam 16: The Demand for Resources

Assume the price of capital doubles and, as a result, firms make no change in the relative quantities of capital and labor they employ.This implies that

Correct Answer
verified

The marginal revenue product schedule is

Correct Answer
verified

A profit-maximizing firm will employ labor up to the point where the

Correct Answer
verified

A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits.It is currently operating in the elastic range of its MRP curve.If the wage rate increases, its total spending on wages at the new equilibrium will

Correct Answer
verified

Which type of occupation is expected by the U.S.Bureau of Labor Statistics to be the fastest growing from 2014 to 2024 ?

Correct Answer
verified

If a firm pays labor $5 and receives an MPL of 10, while paying capital $100 and receiving an MPC of 100, to lower production costs it should hire more labor and less capital.

Correct Answer
verified

The marginal revenue product of labor and the marginal resource cost of labor are both measured in the same units, that is, in dollars per unit of labor.

Correct Answer
verified

A profit-maximizing firm will use additional units of resources for production until

Correct Answer
verified

Which of the following will not cause a shift in the demand for resource X?

Correct Answer
verified

Hiring the profit-maximizing combination of resources ensures that production costs will be minimized.

Correct Answer
verified

For a firm selling its product in a purely competitive market, the marginal revenue product of labor can be found by

Correct Answer
verified

Correct Answer
verified

Marginal revenue product (MRP) is the change in total product (total output) associated with hiring an additional unit of labor.

Correct Answer
verified

A firm's demand curve for labor

Correct Answer
verified

Which of the following is equivalent to the costs that firms incur in acquiring economic resources?

Correct Answer
verified

(Last Word) The rapid spread of ATMs

Correct Answer
verified

Other things being equal, how would the market for tablet computers be affected by a large increase in productivity in the tablet-computer industry?

Correct Answer
verified

A profit-maximizing firm should hire an input as long as the

Correct Answer
verified

The U.S.Bureau of Labor Statistics expects demand for labor in the textile and apparel sector to decline, largely because of

Correct Answer
verified

The introduction of automatic elevator equipment allowed firms to handle the movement of people in a multistory building at less cost, thus decreasing the demand for elevator operators.The best explanation for this change is that the

Correct Answer
verified

Exam 16: The Demand for Resources

Assume the price of capital doubles and, as a result, firms make no change in the relative quantities of capital and labor they employ.This implies that

Correct AnswerverifiedShow Answer

The marginal revenue product schedule is

Correct AnswerverifiedShow Answer

A profit-maximizing firm will employ labor up to the point where the

Correct AnswerverifiedShow Answer

A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits.It is currently operating in the elastic range of its MRP curve.If the wage rate increases, its total spending on wages at the new equilibrium will

Correct AnswerverifiedShow Answer

Which type of occupation is expected by the U.S.Bureau of Labor Statistics to be the fastest growing from 2014 to 2024 ?

Correct AnswerverifiedShow Answer

If a firm pays labor $5 and receives an MPL of 10, while paying capital $100 and receiving an MPC of 100, to lower production costs it should hire more labor and less capital.

Correct AnswerverifiedShow Answer

The marginal revenue product of labor and the marginal resource cost of labor are both measured in the same units, that is, in dollars per unit of labor.

Correct AnswerverifiedShow Answer

A profit-maximizing firm will use additional units of resources for production until

Correct AnswerverifiedShow Answer

Which of the following will not cause a shift in the demand for resource X?

Correct AnswerverifiedShow Answer

Hiring the profit-maximizing combination of resources ensures that production costs will be minimized.

Correct AnswerverifiedShow Answer

For a firm selling its product in a purely competitive market, the marginal revenue product of labor can be found by

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Marginal revenue product (MRP) is the change in total product (total output) associated with hiring an additional unit of labor.

Correct AnswerverifiedShow Answer

A firm's demand curve for labor

Correct AnswerverifiedShow Answer

Which of the following is equivalent to the costs that firms incur in acquiring economic resources?

Correct AnswerverifiedShow Answer

(Last Word) The rapid spread of ATMs

Correct AnswerverifiedShow Answer

Other things being equal, how would the market for tablet computers be affected by a large increase in productivity in the tablet-computer industry?

Correct AnswerverifiedShow Answer

A profit-maximizing firm should hire an input as long as the

Correct AnswerverifiedShow Answer

The U.S.Bureau of Labor Statistics expects demand for labor in the textile and apparel sector to decline, largely because of

Correct AnswerverifiedShow Answer

The introduction of automatic elevator equipment allowed firms to handle the movement of people in a multistory building at less cost, thus decreasing the demand for elevator operators.The best explanation for this change is that the

Correct AnswerverifiedShow Answer

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