Question 1

Unionization provides ____ in given occupations,and as a result,wage rates in these occupations have a tendency to ____.

Accepted Answer

A)   barriers to entry; decrease
B)   barriers to entry; increase
C)   ease of entry; decrease
D)   ease of entry; increaseE) All of the above
F) A) and C)

Question 2

Would the owner of a profit-maximizing fast-food establishment hire another worker for $55 per day if that worker added faster service,increasing sales and revenue by $50 per day? Why or why not?

Accepted Answer

No,hiring this employee would ...

Question 3

Exhibit 16-3  Refer to Exhibit 16-3.Which of the following situations is relevant to Case A?

Accepted Answer

A)   Deteriorating job conditions
B)   A decrease in nonwage income
C)   People become willing to work fewer hours at a given wage
D)   Workers leaving the labor forceE) A) and B)
F) A) and C)

Question 4

All of the following are characteristics of a monopsony employer except:

Accepted Answer

A)   there is a single buyer of labor.
B)   the monopsony firm moves up the positively sloped supply curve it faces.
C)   fewer number of workers hired for wages below what they would be in a competitive market.
D)   workers work for less than their marginal revenue product.E) None of the above
F) C) and D)

Question 5

A decrease in the price of a firm's output will shift the firm's demand curve for labor to the right,other things being equal.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would certainly increase the demand for labor?

Accepted Answer

A)   an increase in demand for the final product and an increase in the productivity of labor
B)   an increase in demand for the final product and a decrease in the productivity of labor
C)   a decrease in demand for the final product and an increase in the productivity of labor
D)   a decrease in demand for the final product and a decrease in the productivity of laborE) A) and C)
F) A) and D)

Question 7

The demand curve for capital is ____ and its supply curve is ____.

Accepted Answer

A)   downward sloping; downward sloping
B)   upward sloping; upward sloping
C)   downward sloping; upward sloping;
D)   upward sloping; downward slopingE) A) and B)
F) B) and C)

Question 8

The demand for cake decorators has no relationship to the demand for cakes.

Accepted Answer

A) True 
 B)False

Question 9

The relationship between the wage rate and the quantity of labor that workers wish to supply in total is called:

Accepted Answer

A)   the market supply curve for labor.
B)   the market demand curve for labor.
C)   an individual demand curve for labor.
D)   an individual supply curve for labor.E) A) and B)
F) All of the above

Question 10

How does monopsony power evolve? What factors might aid its continued presence?

Accepted Answer

Monopsony may arise because a person wit...

Question 11

Exhibit 16-2 The following lists possible capital investments that a business might pursue.
 Refer to Exhibit 16-2.How many projects would the firm invest in if the interest rate is 7 percent?

Accepted Answer

A)   0
B)   1
C)   2
D)   3E) C) and D)
F) A) and D)

Question 12

If there is an increase in demand for a good,

Accepted Answer

A)   there will be an increase in demand for the inputs that produce it.
B)   there will be a decrease in demand for the inputs that produce it.
C)   there will be an increase in supply of the inputs that produce it.
D)   there will be a decrease in supply of the inputs that produce it.E) B) and C)
F) All of the above

Question 13

Demand for inputs is a derived demand because:

Accepted Answer

A)   it is derived from the need for income.
B)   it corresponds to the derived supply of the inputs.
C)   the demand for output leads producers to demand inputs used to produce finished goods.
D)   of the diminishing marginal product of inputs.E) A) and B)
F) B) and C)

Question 14

The MRP curve for labor

Accepted Answer

A)   is the same as the demand curve for labor for a competitive firm.
B)   is the same as the supply curve for labor to a competitive firm.
C)   will shift up when market wages rise.
D)   is characterized by both (a)  and (b) .E) B) and C)
F) None of the above

Question 15

Which of the following does not contribute to increased worker productivity?

Accepted Answer

A)   technological advances
B)   increased capital formation
C)   improvements in workers' skills
D)   increased labor supplyE) B) and C)
F) A) and D)

Question 16

Where monopsony exists,____ workers will be hired at ____ wages than if perfect competition prevailed in a labor market.

Accepted Answer

A)   fewer; lower
B)   fewer; higher
C)   more; lower
D)   more: higherE) A) and B)
F) A) and C)

Question 17

Which of the following might shift an individual's supply curve of labor to the left?

Accepted Answer

A)   winning the lottery
B)   a decrease in non-wage income
C)   due to falling sales, businesses are less willing to hire additional workers
D)   a decrease in derived demandE) B) and C)
F) A) and B)

Question 18

An increase in the interest rate will:

Accepted Answer

A)   increase the amount of money borrowed by firms.
B)   decrease the amount of money borrowed by firms.
C)   have an ambiguous effect on the amount of money borrowed by firms.
D)   have no effect on the amount of money borrowed by firms.E) A) and C)
F) A) and B)

Question 19

When wages decrease

Accepted Answer

A)   the substitution effect increases the quantity of labor supplied
B)   the substitution effect increases the supply of labor.
C)   the income effect increases the quantity of labor supplied
D)   the income effect increases the supply of labor.E) A) and C)
F) All of the above

Question 20

Which of the following would not shift the demand for resource Z?

Accepted Answer

A)   A decline in the price of resource Z.
B)   A decline in the price of substitute resource A.
C)   An increase in the productivity of resource Z.
D)   An increase in the price of the product resource Z is used to produce.E) A) and B)
F) B) and C)

Exam 16: The Markets for Labor, Capital, and Land

Demand for inputs is a derived demand because:

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The demand curve for capital is ____ and its supply curve is ____.

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Which of the following does not contribute to increased worker productivity?

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Which of the following would not shift the demand for resource Z?

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All of the following are characteristics of a monopsony employer except:

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Exhibit 16-3 Refer to Exhibit 16-3.Which of the following situations is relevant to Case A?

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Which of the following would certainly increase the demand for labor?

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The demand for cake decorators has no relationship to the demand for cakes.

Correct AnswerverifiedShow Answer

The relationship between the wage rate and the quantity of labor that workers wish to supply in total is called:

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The MRP curve for labor

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Which of the following might shift an individual's supply curve of labor to the left?

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If there is an increase in demand for a good,

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How does monopsony power evolve? What factors might aid its continued presence?

Correct AnswerverifiedMonopsony may arise because a person wit...View AnswerShow Answer

Exhibit 16-2 The following lists possible capital investments that a business might pursue. Refer to Exhibit 16-2.How many projects would the firm invest in if the interest rate is 7 percent?

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An increase in the interest rate will:

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A decrease in the price of a firm's output will shift the firm's demand curve for labor to the right,other things being equal.

Correct AnswerverifiedShow Answer

Would the owner of a profit-maximizing fast-food establishment hire another worker for $55 per day if that worker added faster service,increasing sales and revenue by $50 per day? Why or why not?

Correct AnswerverifiedNo,hiring this employee would ...View AnswerShow Answer

When wages decrease

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Where monopsony exists,____ workers will be hired at ____ wages than if perfect competition prevailed in a labor market.

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Unionization provides ____ in given occupations,and as a result,wage rates in these occupations have a tendency to ____.

Correct AnswerverifiedShow Answer

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The demand curve for capital is and its supply curve is .

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Monopsony may arise because a person wit...
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No,hiring this employee would ...
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Where monopsony exists, workers will be hired at wages than if perfect competition prevailed in a labor market.

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Unionization provides in given occupations,and as a result,wage rates in these occupations have a tendency to .

Correct Answer
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