Question 1

1 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." class="answers-bank-image d-inline" rel="preload" > Refer to the above graph.Under monopsony in the sale of output and hiring of labor services,the wage rate will be:

Accepted Answer

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.E) B) and D)
F) All of the above

Question 2

Refer to the above graph.If the MRC decreased:

Accepted Answer

A)   quantity would increase.
B)   quantity would decrease.
C)   the firm would operate as a monopsonist.
D)   the firm would increase the supply of labor.E) C) and D)
F) B) and D)

Question 3

The less the elasticity of product demand,the greater the elasticity of resource demand.

Accepted Answer

A) True 
 B)False

Question 4

1 to D2? A)  An increase in productivity B)  A decrease in product demand C)  An increase in the price of complementary input D)  A decrease in the price of a substitute input (if the substitution effect is greater than the output effect) " class="answers-bank-image d-inline" rel="preload" > Refer to the above graph.What will shift D1 to D2?

Accepted Answer

A)   An increase in productivity
B)   A decrease in product demand
C)   An increase in the price of complementary input
D)   A decrease in the price of a substitute input (if the substitution effect is greater than the output effect) E) B) and D)
F) All of the above

Question 5

The demand for labor will decrease in response to:

Accepted Answer

A)   increased productivity.
B)   better training of all laborers.
C)   a decrease in the supply of labor.
D)   decreased demand in markets for consumer goods and services.E) A) and B)
F) B) and C)

Question 6

A monopsonist is the only seller of a good or service in a market area.

Accepted Answer

A) True 
 B)False

Question 7

If a firm is unable to influence the price of a variable productive resource by buying more or less of it,then the marginal cost of the resource is equal to the:

Accepted Answer

A)   price of the resource.
B)   marginal product of the resource.
C)   price of a unit of the firm's output.
D)   minimum average cost of producing the product.E) A) and B)
F) A) and C)

Question 8

1 to D2? A)  An increase in the price of a complementary input B)  A decrease in the demand for the product produced by the labor C)  An increase in the price of a substitute input (if the output effect is greater than the substitution effect)  D)  An increase in the price of a substitute input (if the substitution effect is greater than the output effect) " class="answers-bank-image d-inline" rel="preload" > Refer to the above graph.What will shift D1 to D2?

Accepted Answer

A)   An increase in the price of a complementary input
B)   A decrease in the demand for the product produced by the labor
C)   An increase in the price of a substitute input (if the output effect is greater than the substitution effect) 
D)   An increase in the price of a substitute input (if the substitution effect is greater than the output effect) E) None of the above
F) B) and C)

Question 9

Refer to the above graph.If the MRC increased:

Accepted Answer

A)   quantity would increase.
B)   quantity would decrease.
C)   the firm would operate as a monopsonist.
D)   the firm would increase the supply of labor.E) A) and D)
F) C) and D)

Question 10

If the price of labor falls relative to the price of capital,and as a result the quantity of capital employed decreases,it can be concluded that:

Accepted Answer

A)   the substitution effect is greater than the output effect.
B)   the output effect is greater than the substitution effect.
C)   the income effect is greater than the output effect.
D)   labor cannot be easily substituted for capital.E) A) and D)
F) B) and C)

Question 11

The best example of a monopsonist is:

Accepted Answer

A)   Microsoft.
B)   Ford Motor Company.
C)   the Teamsters Union.
D)   a large army post located in a small community.E) All of the above
F) C) and D)

Question 12

A firm is observed using 15 units of input X when the price of X is $2,and 10 units of X when its price increases to $4.What is the elasticity of demand for input X in this price range?

Accepted Answer

A)   0.5
B)   0.6
C)   1.67
D)   2.0Elasticity of resource demand is the absolute value of the change in quantity of workers divided by the change in resource price.In this case,elasticity is |[(10 - 15) /(10 + 15) ]/[(4 - 2) /(4 + 2) ]| = 0.6.E) A) and B)
F) All of the above

Question 13

A firm is faced with the following schedules of employment,revenue,and wages.  How many workers will be employed by the profit-maximizing firm?

Accepted Answer

A)   6
B)   7
C)   8
D)   9E) None of the above
F) All of the above

Question 14

Which is an example of a change in product demand that decreases labor demand?

Accepted Answer

A)   An increase in the price of paper increases the cost of making books,thus decreasing the demand for bookbinders.
B)   The widespread availability of self-serve gas pumps reduces the demand for workers pumping gas.
C)   An increase in the price of steel increases the cost of producing cars and trucks,thus decreasing the demand for automobile workers.
D)   A decline in productivity in retailing decreases the demand for retail sales workers.E) A) and B)
F) A) and C)

Question 15

A firm's labor input,total output of labor,and product price schedules are given below.Labor is the only variable input.  Refer to the above table and information.What is the marginal revenue product of the fifth worker?

Accepted Answer

A)   $6
B)   $7
C)   $8
D)   $9The marginal revenue product is the change in revenue earned due to the hiring of one more input.In this case,the fifth worker adds 4 units of output and $9 of revenue because revenue rises from $152 to $161.E) C) and D)
F) A) and D)

Question 16

Assume that capital and labor are substitutes in production.The output effect of an increase in the price of capital decreases the demand for labor.

Accepted Answer

A) True 
 B)False

Question 17

Under conditions of imperfect competition in hiring labor,union efforts to increase wages:

Accepted Answer

A)   will necessarily cause unemployment.
B)   will necessarily reduce unemployment.
C)   will strengthen the monopoly power of management.
D)   may either increase or decrease the level of employment.E) B) and C)
F) C) and D)

Question 18

An increase in the demand for computers leads to an increase in demand for computer programmers.This situation arises because:

Accepted Answer

A)   programmers minimize the costs of production.
B)   the supply of programmers has decreased.
C)   the demand for programmers is a derived demand.
D)   of producer sovereignty in resource markets.E) C) and D)
F) None of the above

Question 19

An expenditure on education and training that improves the skills and therefore the productivity of workers is:

Accepted Answer

A)   an efficiency wage.
B)   a compensating difference.
C)   a pay-for-performance plan.
D)   an investment in human capital.E) A) and C)
F) B) and D)

Question 20

The demand for labor would most likely become more elastic as a result of:

Accepted Answer

A)   a decrease in the elasticity of the demand for the product that the labor produces.
B)   an increase in the time for employers to make technological changes or purchase new equipment.
C)   a decrease in the proportion of labor costs to total costs.
D)   an increase in the proportion of labor cost to total costs.E) C) and D)
F) All of the above

Exam 10: Wage Determination

Under conditions of imperfect competition in hiring labor,union efforts to increase wages:

Correct AnswerverifiedShow Answer

Refer to the above graph.Under monopsony in the sale of output and hiring of labor services,the wage rate will be:

Correct AnswerverifiedShow Answer

Refer to the above graph.What will shift D1 to D2?

Correct AnswerverifiedShow Answer

A firm is observed using 15 units of input X when the price of X is $2,and 10 units of X when its price increases to $4.What is the elasticity of demand for input X in this price range?

Correct AnswerverifiedShow Answer

If a firm is unable to influence the price of a variable productive resource by buying more or less of it,then the marginal cost of the resource is equal to the:

Correct AnswerverifiedShow Answer

The best example of a monopsonist is:

Correct AnswerverifiedShow Answer

A monopsonist is the only seller of a good or service in a market area.

Correct AnswerverifiedShow Answer

Assume that capital and labor are substitutes in production.The output effect of an increase in the price of capital decreases the demand for labor.

Correct AnswerverifiedShow Answer

Refer to the above graph.If the MRC increased:

Correct AnswerverifiedShow Answer

If the price of labor falls relative to the price of capital,and as a result the quantity of capital employed decreases,it can be concluded that:

Correct AnswerverifiedShow Answer

A firm is faced with the following schedules of employment,revenue,and wages. How many workers will be employed by the profit-maximizing firm?

Correct AnswerverifiedShow Answer

Refer to the above graph.If the MRC decreased:

Correct AnswerverifiedShow Answer

An increase in the demand for computers leads to an increase in demand for computer programmers.This situation arises because:

Correct AnswerverifiedShow Answer

The demand for labor would most likely become more elastic as a result of:

Correct AnswerverifiedShow Answer

The demand for labor will decrease in response to:

Correct AnswerverifiedShow Answer

Refer to the above graph.What will shift D1 to D2?

Correct AnswerverifiedShow Answer

An expenditure on education and training that improves the skills and therefore the productivity of workers is:

Correct AnswerverifiedShow Answer

The less the elasticity of product demand,the greater the elasticity of resource demand.

Correct AnswerverifiedShow Answer

A firm's labor input,total output of labor,and product price schedules are given below.Labor is the only variable input. Refer to the above table and information.What is the marginal revenue product of the fifth worker?

Correct AnswerverifiedShow Answer

Which is an example of a change in product demand that decreases labor demand?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Refer to the above graph.What will shift D₁ to D₂?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Refer to the above graph.What will shift D₁ to D₂?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified