Question 1

At a low wage rate,

Accepted Answer

A)   there is no substitution effect.
B)   there is no income effect.
C)   the substitution effect usually outweighs the income effect.
D)   the income effect usually outweighs the substitution effect.
E)   the disutility of market work is usually high.F) A) and E)
G) A) and D)

Question 2

As the price of land decreases along its demand curve, the relative price of land

Accepted Answer

A)   increases because the prices of other resources have also decreased.
B)   decreases because the prices of other resources have also decreased.
C)   increases because the prices of other resources have increased.
D)   decreases because the prices of other resources are held constant.
E)   remains constant because the prices of other resources also increase.F) All of the above
G) A) and B)

Question 3

Which of the following is a correct statement about the labor market?

Accepted Answer

A)   Workers determine the supply of labor, and firms determine the demand for labor.
B)   Workers determine the demand for labor, and firms determine the supply of labor.
C)   Workers determine the supply of labor, and government determines the demand for labor.
D)   The forces of supply and demand, while present in the labor market, have nothing to balance in that market.E) A) and C)
F) A) and B)

Question 4

The demand for accountants is a result of the complicated tax code. This is an example of

Accepted Answer

A)   dependent demand.
B)   resource demand.
C)   derived demand.
D)   none of the above.E) B) and C)
F) A) and D)

Question 5

The supply curve of a human resource will be more elastic the

Accepted Answer

A)   easier it is to obtain the skill and knowledge necessary to provide the resource.
B)   more elastic the demand for the product.
C)   more inelastic the demand for the product.
D)   higher the skill level necessary to perform the job.E) B) and C)
F) A) and D)

Question 6

An unexpected increase in the demand for accountants will lead to

Accepted Answer

A)   an increase in their earnings and an expansion in the future supply of accountants.
B)   a decrease in the incentive of students to prepare for a career in accounting.
C)   a reduction in the current earnings of accountants, followed by a reduction in the future supply of accountants.
D)   a reduction in the employment of accountants but not their wage rates.E) B) and C)
F) All of the above

Question 7

Which of the following scenarios would serve to decrease the demand for unskilled labor in our country?

Accepted Answer

A)   increased productivity gains among the unskilled laborers.
B)   increased demand for goods produced by unskilled labor.
C)   increased international trade with countries where unskilled labor is more plentiful.
D)   increased supply of migrant workers.E) B) and C)
F) B) and D)

Question 8

The derived demand and, consequently, the demand curve for labor are determined by

Accepted Answer

A)   labor's wage.
B)   labor's marginal revenue.
C)   the marginal cost of the input labor.
D)   labor's marginal revenue product.E) All of the above
F) A) and B)

Question 9

In the short run, the supply of a resource will generally be

Accepted Answer

A)   less elastic than in the long run.
B)   more elastic than in the long run.
C)   equally elastic as the supply of the resource in the long run.
D)   inversely related to the elasticity of demand for the product that the resource helps produce.E) None of the above
F) All of the above

Question 10

If the MPP of labor is 60 and the price of labor per period is $20, the MPP of machinery is 75 and the price of the machinery per period is $25, in order to achieve optimal input proportions the firm should use

Accepted Answer

A)   more labor and less machinery.
B)   more machinery and less labor.
C)   more labor with the same amount of machinery.
D)   the current combination.E) A) and C)
F) A) and B)

Question 11

The marginal product of labor is the

Accepted Answer

A)   value marginal product of labor multiplied by the price of the good produced.
B)   total output of labor divided by the quantity of labor used.
C)   additional output resulting from employing one additional unit of labor.
D)   same as the marginal revenue product of labor in price-taker markets.E) A) and D)
F) B) and C)

Question 12

Marginal revenue product is the

Accepted Answer

A)   additional revenue from one additional dollar increase in price.
B)   change in the revenue product resulting from one additional unit of input.
C)   additional revenue from one additional unit of input.
D)   change in revenue resulting in one additional dollar in price.E) A) and B)
F) All of the above

Question 13

Use the figure to answer the following question(s) .
Figure 12-2
1 and short-run supply S SR of accountants is indicated in Figure 12-2. Which of the following would most likely shift the demand for accountants from D 1 to D 2? A)  an increase in the number of accounting majors in college B)  enacting legislation that increases the complexity of personal and business tax returns C)  high wages for accountants D)  a reduction in the wages of bookkeepers, a substitute resource for accountants" class="answers-bank-image d-inline" rel="preload" >
The demand D 1 and short-run supply S SR of accountants is indicated in Figure 12-2. Which of the following would most likely shift the demand for accountants from D 1 to D 2?

Accepted Answer

A)   an increase in the number of accounting majors in college
B)   enacting legislation that increases the complexity of personal and business tax returns
C)   high wages for accountants
D)   a reduction in the wages of bookkeepers, a substitute resource for accountantsE) A) and B)
F) None of the above

Question 14

When the supply of workers is plentiful, one would predict that market wages would be

Accepted Answer

A)   determined solely by factors that affect supply.
B)   determined solely by factors that affect demand.
C)   low, other things equal.
D)   high, other things equal.E) All of the above
F) B) and D)

Question 15

Use the information given in the table below to answer the following question(s) . Assume the firm hires labor competitively and sells its product in a competitive price-taker market at a price of $2 per unit.
Table 12-7

Refer to Table 12-7. If the market wage rate is $5 per day, how many workers should the firm employ if it wants to maximize profits?

Accepted Answer

A)   three
B)   four
C)   five
D)   sixE) B) and D)
F) C) and D)

Question 16

If an advance in computer technology reduces the need for businesses to hire accountants, students majoring in accounting should expect

Accepted Answer

A)   a lower rate of return on their human capital investment.
B)   an increase in their employment prospects.
C)   a higher wage rate than they were expecting when they selected their major.
D)   an increase in the demand for accountants.E) C) and D)
F) A) and B)

Question 17

If businesses found that changing economic conditions made it attractive for them to hire a larger number of economics majors, we would expect

Accepted Answer

A)   economics majors to receive a greater return on their human capital investment.
B)   a decrease in the employment opportunities for economics majors.
C)   lower wages for economics majors.
D)   fewer students to major in economics.E) A) and D)
F) None of the above

Question 18

The demand for a factor of production depends largely on the

Accepted Answer

A)   supply of the factor.
B)   supply of other factors of production.
C)   demand for other factors of production.
D)   demand for the products that it helps to produce.E) B) and D)
F) C) and D)

Question 19

Table 12-5
 Refer to Table 12-5. At which number of workers does diminishing marginal product begin?

Accepted Answer

A)   2
B)   3
C)   4
D)   5E) A) and B)
F) A) and C)

Question 20

If a firm is using a resource hired in a perfectly competitive market, and if the marginal resource cost is less than its marginal revenue product,

Accepted Answer

A)   more of the resource should be used.
B)   less of the resource should be used.
C)   the firm should pay a lower price for the resource.
D)   the firm should pay a higher price for the resource.
E)   the firm is using the optimal amount of the resource.F) C) and E)
G) All of the above

Exam 12: The Supply of and Demand for Productive Resources

The marginal product of labor is the

Correct Answer
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Marginal revenue product is the

Correct Answer
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If an advance in computer technology reduces the need for businesses to hire accountants, students majoring in accounting should expect

Correct Answer
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The demand for a factor of production depends largely on the

Correct Answer
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The demand for accountants is a result of the complicated tax code. This is an example of

Correct Answer
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Table 12-5 Refer to Table 12-5. At which number of workers does diminishing marginal product begin?

Correct Answer
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The derived demand and, consequently, the demand curve for labor are determined by

Correct Answer
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If the MPP of labor is 60 and the price of labor per period is $20, the MPP of machinery is 75 and the price of the machinery per period is $25, in order to achieve optimal input proportions the firm should use

Correct Answer
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At a low wage rate,

Correct Answer
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When the supply of workers is plentiful, one would predict that market wages would be

Correct Answer
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Correct Answer
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As the price of land decreases along its demand curve, the relative price of land

Correct Answer
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In the short run, the supply of a resource will generally be

Correct Answer
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Which of the following is a correct statement about the labor market?

Correct Answer
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If a firm is using a resource hired in a perfectly competitive market, and if the marginal resource cost is less than its marginal revenue product,

Correct Answer
verified

If businesses found that changing economic conditions made it attractive for them to hire a larger number of economics majors, we would expect

Correct Answer
verified

Which of the following scenarios would serve to decrease the demand for unskilled labor in our country?

Correct Answer
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The supply curve of a human resource will be more elastic the

Correct Answer
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Use the figure to answer the following question(s) . Figure 12-2 The demand D ₁ and short-run supply S _SR of accountants is indicated in Figure 12-2. Which of the following would most likely shift the demand for accountants from D ₁ to D ₂?

Correct Answer
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An unexpected increase in the demand for accountants will lead to

Correct Answer
verified

Exam 12: The Supply of and Demand for Productive Resources

The marginal product of labor is the

Correct AnswerverifiedShow Answer

Marginal revenue product is the

Correct AnswerverifiedShow Answer

If an advance in computer technology reduces the need for businesses to hire accountants, students majoring in accounting should expect

Correct AnswerverifiedShow Answer

The demand for a factor of production depends largely on the

Correct AnswerverifiedShow Answer

The demand for accountants is a result of the complicated tax code. This is an example of

Correct AnswerverifiedShow Answer

Table 12-5 Refer to Table 12-5. At which number of workers does diminishing marginal product begin?

Correct AnswerverifiedShow Answer

The derived demand and, consequently, the demand curve for labor are determined by

Correct AnswerverifiedShow Answer

If the MPP of labor is 60 and the price of labor per period is $20, the MPP of machinery is 75 and the price of the machinery per period is $25, in order to achieve optimal input proportions the firm should use

Correct AnswerverifiedShow Answer

At a low wage rate,

Correct AnswerverifiedShow Answer

When the supply of workers is plentiful, one would predict that market wages would be

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

As the price of land decreases along its demand curve, the relative price of land

Correct AnswerverifiedShow Answer

In the short run, the supply of a resource will generally be

Correct AnswerverifiedShow Answer

Which of the following is a correct statement about the labor market?

Correct AnswerverifiedShow Answer

If a firm is using a resource hired in a perfectly competitive market, and if the marginal resource cost is less than its marginal revenue product,

Correct AnswerverifiedShow Answer

If businesses found that changing economic conditions made it attractive for them to hire a larger number of economics majors, we would expect

Correct AnswerverifiedShow Answer

Which of the following scenarios would serve to decrease the demand for unskilled labor in our country?

Correct AnswerverifiedShow Answer

The supply curve of a human resource will be more elastic the

Correct AnswerverifiedShow Answer

Use the figure to answer the following question(s) . Figure 12-2 The demand D 1 and short-run supply S SR of accountants is indicated in Figure 12-2. Which of the following would most likely shift the demand for accountants from D 1 to D 2?

Correct AnswerverifiedShow Answer

An unexpected increase in the demand for accountants will lead to

Correct AnswerverifiedShow Answer

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Use the figure to answer the following question(s) . Figure 12-2 The demand D ₁ and short-run supply S _SR of accountants is indicated in Figure 12-2. Which of the following would most likely shift the demand for accountants from D ₁ to D ₂?

Correct Answer
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Correct Answer
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