Microecon: Chapter 18

Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $11 per hour. During the summer, he drives a tour bus around the ski resort, earning $13 per hour. .Refer to Scenario 18-3. During the summer months, what is Sam's opportunity cost of taking an hour off work to go hiking?

$13

In order to study labor markets more easily, we make which of the following assumptions about firms?(i)Firms sell their products in competitive markets.(ii)Firms buy their inputs in competitive markets.(iii)Firms maximize profits.(iv)Firms maximize revenues.

Firms maximize profits.

Your best friend receives a pay raise at her part-time job from $8 to $10 per hour. She used to work 20 hours per week, but now she decides to work 16 hours per week in order to spend more time studying economics. For this price range, her labor supply curve is

backward sloping.

Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $11 per hour. During the summer, he drives a tour bus around the ski resort, earning $13 per hour. Refer to Scenario 18-3. If Sam takes fewer hours of leisure in the summer than in the winter, we can assume that his labor supply curve is

d.backward sloping.

Because a firm's demand for a factor of production is derived from its decision to supply a good in the market, it is called a

differentiated demand.

When a production function exhibits a diminishing, but positive, marginal product of labor

output declines as more workers are employed.

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

technology and wages

Of the total income earned in the U.S. economy, approximately

A. Households in the form of wages and fringe benefits.

An upward-sloping labor supply curve means that

All of the above are correct.

Wendy's hourly wage decreases from $15 to $12. Which of the following describes a consequence of the decrease in Wendy's wage?

All of the above are correct.

Which of the following events could increase the demand for labor?

An increase in the marginal productivity of workers

Which of the following is an example of a firm's derived demand?

Factors that increase the demand for labor will increase the equilibrium wage.

Omega Custom Cabinets produces and sells custom bathroom vanities. The firm has determined that if it hires 10 workers, it can produce 20 vanities per week. If it hires 11 workers, it can produce 22 vanities per week. It sells each vanity for $800, and it pays each of its workers $1,000 per week. Which of the following is correct?

For the 11th worker, the marginal profit is $600.

Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $11 per hour. During the summer, he drives a tour bus around the ski resort, earning $13 per hour.23. Refer to Scenario 18-3. During the winter months, what is Sam's opportunity cost of taking an hour off work to go skiing?

Less than $11

A profit-maximizing, competitive firm for which the marginal product of labor is diminishing also experiences

a perfectly inelastic supply of labor.

When economists refer to a firm's capital, they are describing the

amount of bank financing used by the firm.

Capital, labor, and land

are factors of production.

When deciding whether to hire an additional worker, firms need only consider how the additional worker would affect

costs.

For a worker, the opportunity cost of an hour of leisure

falls by $5 when her wage rises by $5 per hour.

Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $11 per hour. During the summer, he drives a tour bus around the ski resort, earning $13 per hour. Refer to Scenario 18-3. Assume that Sam has an upward-sloping labor supply curve. If the opportunity cost of Sam's leisure time increases, he will respond by working

fewer hours.

The factors of production are best defined as the

goods and services sold in the market.

Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $11 per hour. During the summer, he drives a tour bus around the ski resort, earning $13 per hour. Refer to Scenario 18-3. If Sam takes fewer hours of leisure in the winter than in the summer, we can assume that his labor supply curve

is entirely upward sloping.

Suppose that a new invention decreases the marginal productivity of labor, shifting labor demand to the left. Such an invention would be an example of

labor-augmenting technology.

A competitive, profit-maximizing firm hires workers up to the point where the

marginal revenue product equals zero.

When we focus on the firm as a supplier of a good or a service, we assume that the firm is a profit maximizer. When we focus on the firm as a demander of labor, we assume that the firm's objective is toa.minimize wages.

maximize profit.