Question 1

If two resources are complementary, a decrease in the price of one will reduce the demand for the other.

Accepted Answer

A) True 
 B)False

Question 2

An increase in the price of capital will reduce the demand for labor if capital and labor are complementary resources.

Accepted Answer

A) True 
 B)False

Question 3

A firm is hiring resources X, Y, and Z in the profit-maximizing amounts when

Accepted Answer

A)  MRPx/Px equals MRPy/Py equals MRPz/Pz equals 1.
B)  the sum of the MRPs of the three resources is at a minimum.
C)  the marginal revenue productivity of all three resources is the same.
D)  the marginal revenue product of the last dollar spent on each of the three resources is the same.E) None of the above
F) All of the above

Question 4

To achieve profit maximization, a firm must produce the profit-maximizing output with the least amount of economic resources.

Accepted Answer

A) True 
 B)False

Question 5

A decrease in the price of a productive resource will result in each of the following except a(n)

Accepted Answer

A)  downward shift in the average-cost curves for all products that use the resource.
B)  rightward shift in the supply of products which use the resource.
C)  rightward shift in the demand curves for all products that use the resource.
D)  increase in the quantity demanded of this productive resource.E) A) and B)
F) B) and D)

Question 6

Hiring the least-costly combination of resources ensures that profits will be maximized.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following increases in labor demand is due to a change in the product demand?

Accepted Answer

A)  Access to computers increases the productivity of mail order businesses, thus increasing the demand for their workers.
B)  Tourism increases in popularity, increasing the demand for workers at tourist resorts.
C)  A decrease in the price of trucks decreases the cost of transporting goods, thus increasing the demand for truckers.
D)  A change in work rules increases output per worker in the auto industry, thus increasing the demand for autoworkers.E) B) and C)
F) All of the above

Question 8

In the marginal productivity theory of income distribution, when all markets are purely competitive, the payment for each unit of a resource is equal to its

Accepted Answer

A)  total product.
B)  marginal product.
C)  marginal revenue product.
D)  total revenue product.E) All of the above
F) C) and D)

Question 9

Suppose a competitive firm in both the resource and product markets is using inputs such that the marginal product of labor is 16 and the price of labor is $4 per unit, while the marginal product of capital is 12 and the price of capital is $3 per unit.At the maximum profit equilibrium point, the price of the product is

Accepted Answer

A)  $3.
B)  $4.
C)  $0.25.
D)  between $3 and $4.E) None of the above
F) A) and B)

Question 10

In firm X labor costs are 85 percent of production costs, while in firm Y labor costs are 40 percent of production costs.A 20 percent increase in wages would increase production costs by

Accepted Answer

A)  23 percent in firm X and 20 percent in firm Y.
B)  19 percent in firm X and 15 percent in firm Y.
C)  15 percent in firm X and 6 percent in firm Y.
D)  17 percent in firm X and 8 percent in firm Y.E) A) and B)
F) A) and C)

Question 11

If the price of a good increases, then in the market for the type of labor needed to produce this good,

Accepted Answer

A)  employment will decrease.
B)  the labor supply will increase.
C)  the marginal product (MP)  of labor will increase.
D)  the marginal revenue product (MRP)  of labor will increase.E) All of the above
F) B) and C)

Question 12

A firm that hires labor in a purely competitive resource market is a

Accepted Answer

A)  "price maker."
B)  "product taker."
C)  "money maker."
D)  "wage taker."E) A) and D)
F) A) and C)

Question 13

What will the elasticity of resource demand be if unit wages rise by 8 percent and the number of employed workers falls by 5 percent?

Accepted Answer

A)  0.63
B)  1.61
C)  2.90
D)  4.00E) A) and B)
F) None of the above

Question 14

The labor demand curve of a purely competitive seller

Accepted Answer

A)  slopes downward because the elasticity of demand is always less than unity.
B)  slopes downward because of diminishing marginal productivity.
C)  is perfectly elastic at the going wage rate.
D)  slopes downward because of diminishing marginal utility.E) B) and C)
F) A) and B)

Question 15

Harry owns a barbershop and charges $6 per haircut.By hiring one barber at $10 per hour, the shop can provide 24 haircuts per eight-hour day.By hiring a second barber at the same wage rate, the shop can now provide a total of 42 haircuts per day.The MP of the second barber is

Accepted Answer

A)  $240.
B)  $108.
C)  18 haircuts.
D)  42 haircuts.E) A) and B)
F) B) and D)

Question 16

Which of the following occupations is projected to be the fastest growing in the U.S.in terms of percentage increases?

Accepted Answer

A)  medical assistants
B)  occupational therapy assistants
C)  wind turbine service technicians
D)  statisticiansE) A) and B)
F) A) and C)

Question 17

Wage Rate Quantity of Labor Demanded $16 800
14 1,000
12 1,200
10 1,600
8 1,800
Refer to the given data.For the $16 to $14 range of wage rates, labor demand is

Accepted Answer

A)  perfectly elastic.
B)  elastic.
C)  perfectly inelastic.
D)  inelastic.E) B) and C)
F) All of the above

Question 18

Holding revenues constant, cost minimization by firms is equivalent to

Accepted Answer

A)  sales maximization.
B)  price optimization.
C)  profit maximization.
D)  quantity minimization.E) None of the above
F) A) and C)

Question 19

Which of the following statements is most accurate about the occupations projected to be the most rapidly declining in the U.S.in terms of percentage decreases?

Accepted Answer

A)  The majority are in education related professions.
B)  The majority are in health care related professions.
C)  The majority are in manufacturing related professions.
D)  The majority are in unskilled jobs.E) A) and D)
F) C) and D)

Question 20

Which of the following will not shift the demand curve for labor?

Accepted Answer

A)  the use of a larger stock of capital with the labor force
B)  a change in the wage rate
C)  an increase in the price of the product that labor is helping to produce
D)  the adoption of a more efficient method of combining labor and capital in the production processE) A) and B)
F) C) and D)

Exam 16: The Demand for Resources

What will the elasticity of resource demand be if unit wages rise by 8 percent and the number of employed workers falls by 5 percent?

Correct Answer
verified

In firm X labor costs are 85 percent of production costs, while in firm Y labor costs are 40 percent of production costs.A 20 percent increase in wages would increase production costs by

Correct Answer
verified

Which of the following will not shift the demand curve for labor?

Correct Answer
verified

Holding revenues constant, cost minimization by firms is equivalent to

Correct Answer
verified

An increase in the price of capital will reduce the demand for labor if capital and labor are complementary resources.

Correct Answer
verified

The labor demand curve of a purely competitive seller

Correct Answer
verified

In the marginal productivity theory of income distribution, when all markets are purely competitive, the payment for each unit of a resource is equal to its

Correct Answer
verified

A decrease in the price of a productive resource will result in each of the following except a(n)

Correct Answer
verified

If the price of a good increases, then in the market for the type of labor needed to produce this good,

Correct Answer
verified

A firm that hires labor in a purely competitive resource market is a

Correct Answer
verified

A firm is hiring resources X, Y, and Z in the profit-maximizing amounts when

Correct Answer
verified

Which of the following occupations is projected to be the fastest growing in the U.S.in terms of percentage increases?

Correct Answer
verified

To achieve profit maximization, a firm must produce the profit-maximizing output with the least amount of economic resources.

Correct Answer
verified

Which of the following increases in labor demand is due to a change in the product demand?

Correct Answer
verified

Which of the following statements is most accurate about the occupations projected to be the most rapidly declining in the U.S.in terms of percentage decreases?

Correct Answer
verified

If two resources are complementary, a decrease in the price of one will reduce the demand for the other.

Correct Answer
verified

Correct Answer
verified

Hiring the least-costly combination of resources ensures that profits will be maximized.

Correct Answer
verified

Harry owns a barbershop and charges $6 per haircut.By hiring one barber at $10 per hour, the shop can provide 24 haircuts per eight-hour day.By hiring a second barber at the same wage rate, the shop can now provide a total of 42 haircuts per day.The MP of the second barber is

Correct Answer
verified

Wage Rate Quantity of Labor Demanded $16 800 14 1,000 12 1,200 10 1,600 8 1,800 Refer to the given data.For the $16 to $14 range of wage rates, labor demand is

Correct Answer
verified

Exam 16: The Demand for Resources

What will the elasticity of resource demand be if unit wages rise by 8 percent and the number of employed workers falls by 5 percent?

Correct AnswerverifiedShow Answer

In firm X labor costs are 85 percent of production costs, while in firm Y labor costs are 40 percent of production costs.A 20 percent increase in wages would increase production costs by

Correct AnswerverifiedShow Answer

Which of the following will not shift the demand curve for labor?

Correct AnswerverifiedShow Answer

Holding revenues constant, cost minimization by firms is equivalent to

Correct AnswerverifiedShow Answer

An increase in the price of capital will reduce the demand for labor if capital and labor are complementary resources.

Correct AnswerverifiedShow Answer

The labor demand curve of a purely competitive seller

Correct AnswerverifiedShow Answer

In the marginal productivity theory of income distribution, when all markets are purely competitive, the payment for each unit of a resource is equal to its

Correct AnswerverifiedShow Answer

A decrease in the price of a productive resource will result in each of the following except a(n)

Correct AnswerverifiedShow Answer

If the price of a good increases, then in the market for the type of labor needed to produce this good,

Correct AnswerverifiedShow Answer

A firm that hires labor in a purely competitive resource market is a

Correct AnswerverifiedShow Answer

A firm is hiring resources X, Y, and Z in the profit-maximizing amounts when

Correct AnswerverifiedShow Answer

Which of the following occupations is projected to be the fastest growing in the U.S.in terms of percentage increases?

Correct AnswerverifiedShow Answer

To achieve profit maximization, a firm must produce the profit-maximizing output with the least amount of economic resources.

Correct AnswerverifiedShow Answer

Which of the following increases in labor demand is due to a change in the product demand?

Correct AnswerverifiedShow Answer

Which of the following statements is most accurate about the occupations projected to be the most rapidly declining in the U.S.in terms of percentage decreases?

Correct AnswerverifiedShow Answer

If two resources are complementary, a decrease in the price of one will reduce the demand for the other.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Hiring the least-costly combination of resources ensures that profits will be maximized.

Correct AnswerverifiedShow Answer

Harry owns a barbershop and charges $6 per haircut.By hiring one barber at $10 per hour, the shop can provide 24 haircuts per eight-hour day.By hiring a second barber at the same wage rate, the shop can now provide a total of 42 haircuts per day.The MP of the second barber is

Correct AnswerverifiedShow Answer

Wage Rate Quantity of Labor Demanded $16 800 14 1,000 12 1,200 10 1,600 8 1,800 Refer to the given data.For the $16 to $14 range of wage rates, labor demand is

Correct AnswerverifiedShow Answer

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