Chapter 12,13,14

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.

a

If the payment to an input is a pure economic rent, then reducing that payment will: a. Not influence the availability of the input b. Increase the quantity supplied of the input c. Decrease the quantity supplied of the input d. Decrease the demand for the input

a

If you pay $1,980 annually on an $18,000 loan and the rate of inflation is 3 percent, then the: a. Real rate of interest is 8 percent b. Nominal rate of interest is 8 percent c. Real rate of interest is 11 percent d. Nominal rate of interest is 14 percent

a

In a purely competitive labor market, a profit-maximizing firm will hire labor up to the point where the marginal revenue product of labor equals the: a. Wage rate or price of labor b. Price of the product c. Marginal cost of one extra unit of output d. Average cost of each unit of output

a

Other things equal, the interest rate on a loan will be larger: a. The higher the risk involved b. The larger the amount of the loan c. The shorter the length of the loan d. If loan interest is exempt from taxation

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.

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.

a

The strength of the demand for a resource depends on the following factors, except: a. Supply of the resource b. Productivity of the resource c. Price of the product the resource helps to produce d. Demand for the product the resource helps to produce

a

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.

b

A firm considering whether to borrow money to purchase a capital good will compare the rate of interest for the loan with the: a. Opportunity cost of the capital good b. Rate of return on the investment c. Length of the investment d. Treasury bill rate

b

If a factor of production has a fixed total supply, then payments to that factor constitute: a. Wages b. Economic rent c. Normal profits d. Interest payments

b

If the wage rate in a purely competitive labor market increases, it will cause the: a. Marginal resource cost curve for a single competitive firm in the industry to shift down b. Marginal resource cost curve for a single competitive firm in the industry to shift up c. Labor supply curve for a single competitive firm to shift downward d. Labor supply curve for the industry to shift rightward

b

Professional sports leagues, like the NFL and the NBA, are good examples of monopsony because: a. They are dominant providers of sports entertainment b. They are the only employers of professional athletes in their respective sports c. They are large corporations owned be small groups d. They operate large facilities and stadiums

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. units of labor. d. units of labor.

b

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

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

b

Refer to the above graph. Under purely competitive conditions in this labor market, the equilibrium wage rate will be: a. W1 and Q1 workers will be hired b. W2 and Q2 workers will be hired c. W2 and Q1 workers will be hired dW3 and Q1 workers will be hired

b

Refer to the above information. The MRP of the second barber is: a. 18 haircuts. b. $108. c. 42 haircuts. d. $126.

b

Refer to the above table and information. What will be the equilibrium wage rate? a. $7 b. $8 c. $9 d. $10

b

The demand for capital by a firm is based on the demand for the product that the capital produces. This relationship is referred to as: a. Product demand b. Derived demand c. Resource utilization d. Cost minimization

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

The supply curve for loanable funds is upward-sloping because: a. Lenders are more willing to lend at lower, rather than higher, interest rates b. Lenders are more willing to lend at higher, rather than lower, interest rates c. Borrowers are more willing to borrow at lower, rather than higher, interest rates d. Borrowers are more willing to borrow at higher, rather than lower, interest rates

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.

b

Which expression is used to calculate the present value of an amount of money? a. Future Value x (1+interest rate)time b. Future Value/(1+interest rate)time c. Future Value x (1+time)interest rate d. (1+interest rate)time/Future Value

b

A change in a factor's price will have a greater effect on the quantity of the factor demanded the: a. Smaller the change in the factor's price b. Smaller the factor's share of total cost of production c. More elastic is the demand for the product the factor helps to make d. More inelastic is the demand for the product the factor helps to make

c

A decrease in the supply of loanable funds and an increase in the demand for loanable funds will: a. Increase the interest rate and the quantity of funds loaned b. Decrease the interest rate and the quantity of funds loaned c. Increase the interest rate, but the quantity of funds loaned may either increase or decrease d. Decrease the interest rate, but the quantity of funds loaned may either increase or decrease

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

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

Compared to a purely competitive firm, a monopsonist will pay: a. A higher wage rate to its workers b. Lower wages but hire more workers than the purely competitive firm c. Lower wage rates and hire fewer workers than the purely competitive firm d. Lower wages while hiring the same quantity of workers as the purely competitive firm

c

If a factor of production has many close substitutes, we would expect that its price elasticity of demand would be: a. Unity b. Zero c. Greater than one d. Less than one, but greater than zero

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.

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.

c

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. workers.

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.

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.

c

The demand curve for loanable funds represents the behavior of: a. Lenders b. Savers c. Borrowers d. Bankers

c

The demand for a resource will increase if the: a. Price of the resource decreases b. Supply of the resource decreases c. Price of the product the firm is producing increases d. Price of the product the firm is producing decreases

c

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.

d

Refer to the above graph. Under a monopsony in this labor market, the equilibrium wage rate will be: a. W1 and Q1 workers will be hired b. W2 and Q2 workers will be hired c. W2 and Q1 workers will be hired d. W3 and Q1 workers will be hired

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

Refer to the above table and information. What is the marginal revenue product of the fifth worker? a. $6 b. $7 c. $8 d. $9

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.

d

The reason that the supply curve for labor in a purely competitive market slopes upward is because: a. The wage rate paid to workers falls as more are hired b. The marginal product of labor falls as output increases c. Marginal resource cost rises as productivity increases d. Higher wages must be paid to bid workers away from other opportunities

d