Question 1

In the capital market,the rental price is:

Accepted Answer

A)  what a producer pays to use a factor of production for a certain period or task.
B)  what a producer pays to gain permanent ownership of a factor of production.
C)  what a consumer pays to use labor or land services for a certain period or task.
D)  what a consumer pays to gain permanent ownership of a factor of production.E) C) and D)
F) None of the above

Question 2

In the real world:

Accepted Answer

A)  the price effect usually dominates,and thus we assume a downward sloping supply curve.
B)  the income effect usually dominates,and thus we assume a downward sloping supply curve.
C)  the price effect usually dominates,and thus we assume an upward sloping supply curve.
D)  the income effect usually dominates,and thus we assume an upward sloping supply curve.E) A) and D)
F) None of the above

Question 3

The factor of production called "labor" can be defined as:

Accepted Answer

A)  the number of employees a business employs at a given time.
B)  the time spent by employees in the production of goods,but not services.
C)  the fraction of total costs spent on people.
D)  None of these statements is true.E) All of the above
F) None of the above

Question 4

When the U.S.decides to strengthen its border control,the labor market in California is adversely affected.We would expect:

Accepted Answer

A)  the demand for labor to decrease.
B)  the supply of labor to decrease.
C)  the demand of labor to increase.
D)  the supply of labor to increase.E) All of the above
F) C) and D)

Question 5

Farming in poor countries is considered to be ___________ intensive because __________.

Accepted Answer

A)  labor;labor is typically relatively cheaper than machinery in poor countries
B)  capital;the labor used is concentrated,spread thinly across a lot of capital
C)  labor;the tools in poor countries are more plentiful than the people
D)  capital;the tools in poor countries are relatively cheaper than the cost of using people in poor countriesE) A) and B)
F) B) and C)

Question 6

A monopsony is characterized as a market which has:

Accepted Answer

A)  one buyer and many sellers.
B)  many buyers and one seller.
C)  many buyers and many sellers.
D)  one buyer and one seller.E) A) and B)
F) C) and D)

Question 7

The income effect describes:

Accepted Answer

A)  the increase in the quantity of labor supplied response to a higher wage.
B)  the decrease in the quantity of labor supplied due to the greater demand for leisure caused by a higher income.
C)  the decrease in the quantity of labor supplied in response to a lower wage.
D)  the increase in the quantity of labor supplied due to the greater demand for leisure caused by a higher income.E) C) and D)
F) A) and D)

Question 8

Increased border patrol will adversely affect the labor market in California.With a _________ in labor supply,we would expect wages to __________.

Accepted Answer

A)  decrease;increase
B)  decrease;decrease
C)  increase;increase
D)  increase;decreaseE) A) and D)
F) All of the above

Question 9

The more human capital workers have:

Accepted Answer

A)  the more productive they are.
B)  the less productive they are.
C)  the lower the value of their marginal product.
D)  None of these statements is true.E) A) and B)
F) B) and D)

Question 10

When labor is substitutable between two markets,we should expect:

Accepted Answer

A)  the two markets to pay the same or similar equilibrium wage.
B)  those markets to produce substitutable outputs.
C)  the workers in the two markets to commit to one at the start of their career and stick with it,despite the similarities.
D)  All of these statements are true.E) C) and D)
F) A) and D)

Question 11

The ingredients that go into making any good or service are called the:

Accepted Answer

A)  output makers.
B)  factors of production.
C)  factors of output.
D)  production ingredients.E) B) and C)
F) All of the above

Question 12

A "company town" is one in which:

Accepted Answer

A)  all employees of a company live within its confines.
B)  a single company employs the great majority of people in a town and owns most structures in the town.
C)  the company directs most town business.
D)  All of these statements are true.E) B) and C)
F) B) and D)

Question 13

An example of human capital is:

Accepted Answer

A)  plumbing skills.
B)  a wrench.
C)  a manual on how to install a sink.
D)  All of these are examples of human capital.E) All of the above
F) A) and C)

Question 14

Markets that require workers with similar human capital:

Accepted Answer

A)  vie for the same workers,who can interchange one type of employment for another.
B)  often have similar wages,because they employ similar workers.
C)  are more connected than others.
D)  All of these statements are true.E) None of the above
F) A) and B)

Question 15

For any competitive labor market,what change would have to occur to cause the labor supply to increase and shift the supply curve right?

Accepted Answer

A)  Number of firms increases
B)  Opportunity cost of work decreases
C)  Number of workers decreases
D)  Opportunity cost of work increasesE) A) and B)
F) A) and C)

Question 16

The marginal product generated by an additional unit of input times the price of the output is called:

Accepted Answer

A)  the value of the marginal product.
B)  the marginal revenue product.
C)  Both of these statements are true.
D)  Neither of these statements are true.E) None of the above
F) A) and D)

Question 17

Wes works as a delivery man and can work as many hours as he likes for $12 an hour.He typically works 40 hours a week.Recently,his pay has been cut,and Wes decides to:

Accepted Answer

A)  work more hours,because the price effect dominates his labor supply decision.
B)  works less hours,because the income effect dominates his labor supply decision.
C)  works more hours,because the income effect dominates his labor supply decision.
D)  None of these statements is true.E) B) and C)
F) A) and B)

Question 18

We think about the cost of supplying labor as:

Accepted Answer

A)  the opportunity cost of the individual's time.
B)  the input costs that go into producing a unit of labor.
C)  the average wage in the labor market.
D)  All of these statements are true.E) B) and C)
F) A) and D)

Question 19

Graphing the value of marginal product against the quantity of a given input hired looks like which of the following curves?

Accepted Answer

A)  The total product curve
B)  The total revenue curve
C)  The demand curve
D)  The value product curveE) A) and C)
F) A) and B)

Question 20

In the capital market,the purchase price is:

Accepted Answer

A)  what a producer pays to use a factor of production for a certain period or task.
B)  what a producer pays to gain permanent ownership of a factor of production.
C)  what a consumer pays to use labor or land services for a certain period or task.
D)  what a consumer pays to gain permanent ownership of a factor of production.E) A) and C)
F) All of the above

Exam 16: The Factors of Production

In the capital market,the purchase price is:

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For any competitive labor market,what change would have to occur to cause the labor supply to increase and shift the supply curve right?

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Increased border patrol will adversely affect the labor market in California.With a _________ in labor supply,we would expect wages to __________.

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Graphing the value of marginal product against the quantity of a given input hired looks like which of the following curves?

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When the U.S.decides to strengthen its border control,the labor market in California is adversely affected.We would expect:

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The ingredients that go into making any good or service are called the:

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When labor is substitutable between two markets,we should expect:

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An example of human capital is:

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We think about the cost of supplying labor as:

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The factor of production called "labor" can be defined as:

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The income effect describes:

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Wes works as a delivery man and can work as many hours as he likes for $12 an hour.He typically works 40 hours a week.Recently,his pay has been cut,and Wes decides to:

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The marginal product generated by an additional unit of input times the price of the output is called:

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A monopsony is characterized as a market which has:

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A "company town" is one in which:

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Farming in poor countries is considered to be ___________ intensive because __________.

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Markets that require workers with similar human capital:

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The more human capital workers have:

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In the capital market,the rental price is:

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In the real world:

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Increased border patrol will adversely affect the labor market in California.With a _ in labor supply,we would expect wages to __.

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Farming in poor countries is considered to be _ intensive because .

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