Quiz 8 (Ch. 14, 15, 16)
B
Answer the next question(s) on the basis of the following information for Manfred's Shoe Shine Parlor. Assume Manfred hires labor, its only variable input, under purely competitive conditions. Shoe shines are also sold competitively. Refer to the above data. What is the marginal product of the sixth worker? a) 2 units b) 3 units c) 4 units d) 5 units
B
Answer the next question(s) on the basis of the following information: 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. Refer to the above information. The MRP of the second barber is: a) 18 haircuts. b) $108. c) 42 haircuts. d) $126.
B
A craft union attempts to increase wage rates by: a) equating the MRP and the MRC curves. b) shifting the labor supply curve to the left. c) shifting the labor supply curve to the right. d) shifting the MRP curve to the right.
D
A monopsonistic employer's marginal resource (labor) cost curve: a) is always more elastic than the labor supply curve. b) coincides with the labor supply curve. c) lies below the labor supply curve because the higher wage paid to an additional worker must also be paid to all other employed workers. d) lies above the labor supply curve because the higher wage paid to an additional worker must also be paid to all other employed workers.
C
A profit-maximizing firm employs resources to the point where: a) MRC = MP. b) Resource price equals product price. c) MRP = MRC. d) MP = product price.
C
Answer the next question(s) on the basis of the information given in the following table: Refer to the above data. If the firm is hiring workers under purely competitive conditions at a wage rate of $22, it will employ: a) 1 worker. b) 2 workers. c) 3 workers. d) 4 workers.
C
Assume that the coefficient of elasticity of product demand is 0.5 in industry A and is 3.2 in industry B. Other things equal, labor demand will be: a) more elastic in industry A than in B. b) relatively elastic in both industry A and B. c) more elastic in industry B than in A. d) relatively inelastic in both industry A and B.
C
If a single large employer bargains with an inclusive union, the resulting labor market model can best be described as: a) a cartel. b) countervailing power. c) a bilateral monopoly. d) an internal labor market.
A
If an exclusive union is successful in restricting the supply of labor, the: a) wage rate will rise. b) quantity of labor demanded will rise. c) number of job opportunities in the firm or industry will increase. d) demand for labor curve will shift leftward.
C
If one worker can pick $30 worth of grapes and two workers together can pick $50 worth of grapes, the: a) marginal revenue product of each worker is $25. b) marginal revenue product of the first worker is $20. c) marginal revenue product of the second worker is $20. d) data given do not permit the determination of the marginal revenue product of either worker.
A
Other things equal, the monopsonistic employer will pay a: a) lower wage rate and hire fewer workers than will a purely competitive employer. b) higher wage rate but hire fewer workers than will a purely competitive employer. c) lower wage rate but hire a larger number of workers than will a purely competitive employer. d) higher wage rate and hire a larger number of workers than will a purely competitive employer.
C
Refer to the above data. If the market wage rate is $8, this firm will employ: a) 2 workers. b) 3 workers. c) 4 workers. d) 5 workers.
B
Refer to the above data. In maximizing its profit, this firm will employ: a) 2 units of labor. b) 3 units of labor. c) 4 units of labor. d) 5 units of labor.
B
Refer to the above diagram. Assuming no union or relevant minimum wage, the firm represented will hire: a) Q2 workers and pay a W4 wage rate. b) Q2 workers and pay a W1 wage rate. c) Q3 workers and pay a W2 wage rate. d) Q4 workers and pay a W1 wage rate.
C
Refer to the above diagrams. The firm: a) is a monopsonist in the hiring of labor. b) must be selling its product in an imperfectly competitive market. c) is a "wage taker." d) must pay a higher marginal resource cost for each successive worker.
D
Refer to the above labor market diagrams. The tactics of exclusive unionism are portrayed in Figure: a) 4. b) 3. c) 2. d) 1.
D
Resource X has many close substitutes whereas resource Y has no close substitutes. Other things equal, we would expect: a) the demand for resource Y to be more elastic than the demand for resource X. b) resources X and Y to be close substitutes. c) resource X to be more expensive than resource Y. d) the demand for resource X to be more elastic than the demand for resource Y.
D
Resource pricing is important because: a) resource prices are a major determinant of money incomes. b) resource prices allocate scarce resources among alternative uses. c) resource prices, along with resource productivity, are important to firms in minimizing their costs. d) of all of these reasons.
A
Suppose the demand for strawberries rises sharply, resulting in an increased price of strawberries. As it relates to strawberry pickers, we could expect the: a) MRP curve to shift to the right. b) MRP curve to shift to the left. c) MRC curve to shift downward. d) MP curve to shift downward.
B
The marginal revenue product schedule is: 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.
B
When economists say that the demand for labor is a derived demand, they mean that it is: a) dependent on government expenditures for public goods and services. b) related to the demand for the product or service labor is producing. c) based on the desire of businesses to exploit labor by paying below equilibrium wage rates. d) based on the assumption that workers are trying to maximize their money incomes.
