Econ 101 Final
Which of the following has not been a major factor contributing to the high productivity of labor in the United States?
high wage rates
If the world price for good A is below the domestic price for good A without trade, then producer surplus will ___ and total economic surplus will ___ with trade.
decrease, increase
A nation will neither export nor import a specific product when its
domestic price equals the world price
Graphical analysis of tariffs reveal that
they increase domestic production of the good for which imports face tariffs
Graphical analysis of tariffs reveals that
they increase domestic production of the good for which imports face tariffs
Inclusive unionism is practiced mostly by
industrial unions
If the world price of the product were $6 and a tariff of $1 per unit were applied to imports of the product, then the total revenue (after tariff) going to domestic producers would be
$11,200, and the total revenue (after tariff) going to foreign producers would be $2,400.
If the product the firm produces sells for a constant $2 per unit, the marginal revenue product of the third unit of the resource is
$24
Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is
$36
What is the marginal revenue product of the third worker?
$600
Suppose a single firm has the marginal revenue product schedule for a particular type of labor given in the left table . Assume there are 150 firms with the same marginal-revenue-product schedule for this particular type of labor. What will be the equilibrium wage rate?
$8
What is the marginal revenue product of the fifth worker?
-$800
Nominal monthly wage increases from $1,500 to $1,800 while the price level increases by 4%. The percentage change in real monthly wage is about
16%
If the world price of the product is $6 and a tariff of $1 per unit imported is imposed, the the quantity of output that would be supplied domestically would be
1600 units, and the quantity of the output that would imported would be 400 units
Harry owns a barber shop and charges $6 per haircut. By hiring one barber at $10 per hour, the shop can provide 24 haircuts per 8-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
18 haircuts
Assume that the firm is hiring labor in a purely competitive market. If the wage rate is $20, how many workers will the firm choose to employ?
2
How many more workers will the firm hire when the wage rate is $15 instead of $30?
2 workers
At a wage rate of $23 per worker, the firm will choose to employ
3 workers
Suppose that each nation specialized in producing the product for which it has a comparative advantage, and the terms of trade were set at 3 units of chemicals for 1 unit of autos. In this case, Germany could obtain and consume a maximum combination of 8 million units of autos and
36 million units of chemicals
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. What is the farmer's profit-maximizing output?
37
If the firm's product sells for a constant $2 and the price of the resource is a constant $16, the firm will employ how many units of the resource?
5
The product price is $10 per unit and the cost per worker is $540. How many workers will the firm employ?
5
Assume that Wat originally produced rice and corn at combination C and that Xat originally produced combination B. If the nations now fully specialized based on comparative advantage, the total gains from specialization and trade are
50 units of rice and 50 units of corn
Prior to trade (autarky) consumer surplus equals area
A + B + C
If union workers decide to take more leisure, while the prices of the products produced by union workers increase, the situation is depicted in graph
C
If the union workers decide to take more leisure, while the prices of the products produced by union workers decrease, this situation is depicted in graph
D
IF the world price for good A is above the domestic price for good A without trade, then consumer surplus will ____ and producer surplus will ___ with trade.
decrease, increase
Which of the following is true?
For the west region, the cost of 15 units of food is 5 units of clothing
Sd + Q is the product supply curve after an import quota is imposed. A quota of wy will result in quota rent equal to areas
G + H
The domestic opportunity cost of producing 100 barrels of chemicals in Germany is 1 ton of steel. In France, the domestic opportunity cost of producing 100 barrels of chemicals is 2 tons of steel. In this case
Germany has a comparative advantage in the production of chemicals
Suppose the demand for strawberries rises sharply, resulting in an increased price for strawberries. as it relates to strawberry pickers, we could expect the
MRP curve to shift to the right
If these two nations specialize on the basis of comparative advantage
Natalia will produce beans and Trombone will produce pork
Nation Alpha can produce employing all its available resources either 800 units of chemicals or 1,600 units of clothing. Nation Beta can produce either 200 units of chemicals or 800 units of clothing.
Nation Alpha has a comparative advantage in producing chemicals.
If this economy was entirely closed to international trade, equilibrium price and quantity would be
PA and x
IF the economy is opened to free trade, the price and quantity sold of this product would be
Pc and z
What other economic process needs to accompany international trade, for nations to benefit from such trade?
Specialization in production
Which statement is correct?
The percentage change in the nominal wage minus the percentage change in the price level equals the percentage change in real wage
Which of the following will not cause a shift in the demand for resource X?
a decline in the price of resource X
Which of the following is a valid explanation for real wage growth?
a rising rate of labor productivity growth
Marginal revenue product measures the
amount by which the extra production of one more worker increases a firm's total revenue
If the price level rises by 4% in a year and nominal wages increase by 2% then real wages will
decrease by 2%
A profit-maximizing firm will
expand employment if marginal revenue product exceeds marginal resource cost
Assume that there are two nations, Alpha and Beta. Each nation produces two products, wheat and steel. Alpha has a comparative advantage in the production of wheat. If the two nations trade, the trade price of wheat in terms of steel will be
greater than the domestic opportunity cost of wheat in Alpha and less than the domestic opportunity cost of wheat in Beta.
A profit-maximizing firm's daily total revenue is $155 with 3 workers, $200 with 4 workers, and $230 with 5 workers. The cost of each worker is $40 per day. The firm should
hire four workers
Country A limits other nation's exports to Country A to 1,000 tons of coal annually. This is an example of an
import quota
Increases in the productivity of labor result partly from
improvements in technology
A decline in the price of resource A will
increase the demand for complementary resource B
Import quotas on products will reduce the quantity of the imported products and
increase the price to the consumers
If the nominal wages of carpenters rose by 5% in 2013 and the price level increased by 3%, then the real wages of carpenters
increased by 2%
The real wage will rise if the nominal wage
increases more rapidly than the general price level
The MRP curve for labor
is the firm's labor demand curve
If the marginal revenue product (MRP) of labor is less than the wage rate
less labor should be employed
When restrictions on imported products are removed by a ration, it will result in
lower prices and higher quantities consumed in that nation
A firm will find it profitable to hire workers up to the point at which their
marginal resource cost is equal to their MRP
Suppose two workers can harvest $46 and three workers can harvest $60 worth of apples per day. On the bassi of this information we can say that th
marginal revenue of the third worker is $14
A change in a firm's total revenue that results from hiring an additional worker is measured by the
marginal revenue product
The change is a firm's total revenue that results from hiring an additional worker is measured by the
marginal revenue product
A profit maximizing firm should hire an input as long as the
marginal revenue product of the input is at least as much as the cost of hiring the input
A profit-maximizing firm should hire an input as long as the
marginal revenue product of the input is at least as much as the cost of hiring the input
If one worker can $30 worth of grapes and two workers together can pick $50 with of grapes, the
marginal revenue product of the second worker is $20
The primary fan from international trade is
more goods than would b attainable through domestic production alone
Assuming a firm is selling its output in a purely competitive market, its resource demand curve can be determined by
multiplying marginal product by product price
Suppose a powerful labor union negotiates a wage for its members above the equilibrium wage rate in a non unionized market. A likely result of this is that
not everyone who wants to work at the new wage will be able to find a job
An industrial union
organizes a wide range of workers in an industry to gain bargaining power
Which of the following is an explanation for the high labor-productivity in the United States?
plentiful capital resources
The purely competitive employer of resource A will maximize the profits from A by equating the
price of A with the MRP of A
A competitive employer will hire inputs up to the point where the
price of the input equals the marginal revenue product of the input
Other things equal, a decrease in the price of a substitute resource would cause a
shift form D2 to D3 assuming the output effect exceeds the substitution effect
Assume that a restaurant is hiring labor in an amount such that the MRC of the last worker is $16 and her MRP is $12. On the basis of this information, we can say that
profits will be increased by hiring fewer workers
A maximum limit set in the amount of a specific good that may be imported into a country over a given period of time is called a
quota
Other things equal, an increase in labor productivity would cause a
shift from D2 to D3
When economists say that the demand for labor is a derived demand, they mean that is
related to the demand for the product or service labor is producing
Sd + Q is the product supply curve after an import quota is imposed. A quota of wy will result in an increase of producer surplus equal to areas.
result in an increase of producer surplus to area E
Real wages would rise if the prices of good and services
rose less readily than nominal-wage rates
Other things equal, an increase in the price of substitute resource would cause a
shift from D2 to D3 assuming the substitution effect exceeds the output effect
Other things equal, an increase in the price of a complementary resource would cause a
shift from D3 to D2
A competitive employer is using labor in such an amount that labor's MRP is $10 and its wage rate is $8. This firm
should hire more labor because this will increase profits
The labor demand curve of a purely competitive seller
slopes downward because of diminishing marginal productivity
IF the supply of labor in a purely competitive labor market increases, the the product
supply curve for a single employer will shift to the right
The ratio at which nations will exchange one product for another is known as the
terms of trade
A competitive employer should hire additional labor as long as
the MRP exceeds the wage rate
Marginal product is
the amount an additional worker adds to the firms total output
The demand for airline pilots results from the demand for air travel. This fact is an example of
the derived demand for labor
The marginal revenue product schedule is
the firm's resource demand schedule
Marginal resource cost is
the increase in total resource cost associated with the hire of one more unit of the resource
Suppose two workers can harvest $46 and three workers can harvest $60 worth of apples per day. On the bassi of this information we can say that
the marginal revenue of the third worker is $14
Domestic producers might oppose free trade agreements because
there is a decreases in producer surplus
The area 0abc represents
total earnings of labor
In a purely competitive labor market, a profit-maximizing form will hire labor up to the point where the marginal revenue product of labor equals the
wage rate or price of labor
Suppose there is a decline in the demand for the product labor is producing. Furthermore, the price of capital, which is complementary to labor, increases. Thus, the demand for labor
will decrease