Question 1

Two resource inputs, capital and labor, are complementary and used in fixed proportions.An increase in the price of capital will

Accepted Answer

A)  increase the demand for labor.
B)  decrease the demand for labor.
C)  decrease the quantity demanded for labor.
D)  have no effect, because the relationship is fixed.E) A) and B)
F) All of the above

Question 2

The marginal revenue product curve for an input is downsloping because of the law of diminishing returns.

Accepted Answer

A) True 
 B)False

Question 3

In a given labor market, the demand for labor by employers will shift to the right or left with changes in all of the following, except

Accepted Answer

A)  the demand for the products produced by the employers.
B)  the price of labor that the employers must pay.
C)  the prices of other resources that the firms must use.
D)  occupational trends affecting the particular labor in the market.E) B) and D)
F) All of the above

Question 4

The rising demand for health-care industry workers is due to the following factors, except

Accepted Answer

A)  aging of the U.S.population.
B)  rising income levels in the U.S.
C)  the continued presence of health insurance for U.S.consumers.
D)  decreasing prices of labor in the health-care industry.E) A) and B)
F) A) and D)

Question 5

The demand for computers is derived from the demand for the capital resources that are used to produce computers.

Accepted Answer

A) True 
 B)False

Question 6

If a factor of production has many close substitutes, we would expect that its price elasticity of demand would be

Accepted Answer

A)  unity.
B)  zero.
C)  greater than one.
D)  less than one, but greater than zero.E) A) and B)
F) A) and C)

Question 7

The marginal productivity theory of income distribution suggests that

Accepted Answer

A)  government should subsidize the most productive workers through a system of transfer payments.
B)  each individual receives income based on his or her contribution to total output.
C)  resource owners should receive income based on the idea of "from each according to his ability, to each according to his wants."
D)  resource owners should receive income based upon their needs.E) A) and D)
F) B) and C)

Question 8

If the price of capital declines, the consequent output effect would be

Accepted Answer

A)  greater, the more elastic the demand for the product.
B)  greater, the less elastic the demand for the product.
C)  negative.
D)  of consequence only if capital and labor are used in fixed proportions.E) A) and C)
F) All of the above

Question 9

If the substitution effect outweighs the output effect, an increase in the price of a substitute resource will increase the demand for labor.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements best illustrates the concept of derived demand?

Accepted Answer

A)  As income goes up, the demand for farm products will increase by a smaller relative amount.
B)  A decline in the price of margarine will reduce the demand for butter.
C)  A decline in the demand for shoes will cause the demand for leather to decline.
D)  When the price of gasoline goes up, the demand for motor oil will decline.E) A) and B)
F) C) and D)

Question 11

The prices of resources are an important factor in the determination of money income.

Accepted Answer

A) True 
 B)False

Exam 16: The Demand for Resources

If the substitution effect outweighs the output effect, an increase in the price of a substitute resource will increase the demand for labor.

Correct Answer
verified

If the price of capital declines, the consequent output effect would be

Correct Answer
verified

In a given labor market, the demand for labor by employers will shift to the right or left with changes in all of the following, except

Correct Answer
verified

If a factor of production has many close substitutes, we would expect that its price elasticity of demand would be

Correct Answer
verified

The prices of resources are an important factor in the determination of money income.

Correct Answer
verified

The rising demand for health-care industry workers is due to the following factors, except

Correct Answer
verified

The marginal revenue product curve for an input is downsloping because of the law of diminishing returns.

Correct Answer
verified

Which of the following statements best illustrates the concept of derived demand?

Correct Answer
verified

Two resource inputs, capital and labor, are complementary and used in fixed proportions.An increase in the price of capital will

Correct Answer
verified

The demand for computers is derived from the demand for the capital resources that are used to produce computers.

Correct Answer
verified

The marginal productivity theory of income distribution suggests that

Correct Answer
verified

Exam 16: The Demand for Resources

If the substitution effect outweighs the output effect, an increase in the price of a substitute resource will increase the demand for labor.

Correct AnswerverifiedShow Answer

If the price of capital declines, the consequent output effect would be

Correct AnswerverifiedShow Answer

In a given labor market, the demand for labor by employers will shift to the right or left with changes in all of the following, except

Correct AnswerverifiedShow Answer

If a factor of production has many close substitutes, we would expect that its price elasticity of demand would be

Correct AnswerverifiedShow Answer

The prices of resources are an important factor in the determination of money income.

Correct AnswerverifiedShow Answer

The rising demand for health-care industry workers is due to the following factors, except

Correct AnswerverifiedShow Answer

The marginal revenue product curve for an input is downsloping because of the law of diminishing returns.

Correct AnswerverifiedShow Answer

Which of the following statements best illustrates the concept of derived demand?

Correct AnswerverifiedShow Answer

Two resource inputs, capital and labor, are complementary and used in fixed proportions.An increase in the price of capital will

Correct AnswerverifiedShow Answer

The demand for computers is derived from the demand for the capital resources that are used to produce computers.

Correct AnswerverifiedShow Answer

The marginal productivity theory of income distribution suggests that

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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