Question 1

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

Accepted Answer

A)  the earth and anything in it used to produce goods and services.
B)  that area of the earth exchanged in the real estate market by businesses.
C)  the fraction of total costs spent on rent,lease,or mortgage.
D)  the earth and any structures on it that are used to produce goods and services.E) A) and D)
F) All of the above

Question 2

The factors of production are:

Accepted Answer

A)  the ingredients that go into making any good or service.
B)  the outputs that society as a whole have chosen to produce.
C)  the costs and benefits of a given production process.
D)  the list of inputs required for a given durable good.E) A) and B)
F) B) and C)

Question 3

In general,when people talk about investing,they mean that they:

Accepted Answer

A)  have lent their money to someone who will use it to buy physical capital.
B)  have put money in the stock market.
C)  hold stocks or bonds.
D)  All of these statements are true.E) None of the above
F) A) and B)

Question 4

The curve formed by plotting the value of the marginal product for workers is:

Accepted Answer

A)  downward sloping.
B)  upward sloping.
C)  perfectly elastic,for competitive firms.
D)  perfectly inelastic.E) A) and C)
F) A) and D)

Question 5

The term "economic rent" is used to describe:

Accepted Answer

A)  the gains that workers and owners of capital receive from supplying their labor or machinery in factor markets.
B)  what is referred to as producer surplus in output markets.
C)  the rental price of a factor of production minus the cost of supplying it.
D)  All of these statements are true.E) B) and D)
F) B) and C)

Question 6

The decrease in the quantity of labor supplied due to the greater demand for leisure caused by a higher income is called the:

Accepted Answer

A)  income effect.
B)  price effect.
C)  substitution effect.
D)  labor effect.E) B) and C)
F) A) and D)

Question 7

In a competitive labor market,if the demand for labor increases,labor demand will shift:

Accepted Answer

A)  to the right and wages will increase.
B)  to the left and wages will increase.
C)  to the right and wages will decrease.
D)  to the left and wages will decrease.E) None of the above
F) All of the above

Question 8

If the demand for baseballs increases,then as a result,it is highly likely that the demand for:

Accepted Answer

A)  leather will increase.
B)  bats will decrease.
C)  soccer balls will rise.
D)  All of these are likely.E) All of the above
F) C) and D)

Question 9

For a competitive firm,the value of the marginal product:

Accepted Answer

A)  decreases for each additional worker.
B)  increases for each additional worker.
C)  remains constant across workers.
D)  is zero when profits are maximized.E) B) and C)
F) All of the above

Question 10

In order to see how the labor market works as a whole,we need to:

Accepted Answer

A)  add up all the supply curves of individual workers and the demand curves of individual firms to find market level supply and demand.
B)  add up all the observed equilibrium wages across all individual markets and take the weighted average.
C)  add up all the demand curves of individual workers and the supply curves of individual firms to find market level demand and supply.
D)  None of these statements is true.E) A) and D)
F) A) and C)

Question 11

In general,as wages go up:

Accepted Answer

A)  people are willing to work less.
B)  the opportunity cost of leisure goes up.
C)  the opportunity cost of leisure goes down.
D)  None of these statements is true.E) A) and B)
F) B) and C)

Question 12

If the price effect outweighs the income effect of a wage increase,the quantity of labor supplied will:

Accepted Answer

A)  increase.
B)  decrease.
C)  remain the same.
D)  be negative.E) A) and D)
F) B) and D)

Question 13

An individual labor-supply curve represents:

Accepted Answer

A)  a worker's decisions around how many hours to work at each alternative wage.
B)  the decisions of all workers around how many hours to work at each alternative wage.
C)  a firm's decisions around how many hours to hire at each alternative wage.
D)  the decisions of all firms around how many hours to work at each alternative wage.E) None of the above
F) C) and D)

Question 14

If the demand for oranges falls,as a result,it is highly likely that the demand for:

Accepted Answer

A)  orange juice will fall.
B)  orange grove workers will fall.
C)  apples will increase.
D)  All of these are likely to happen.E) All of the above
F) B) and D)

Question 15

Holding other things constant,diminishing marginal productivity happens:

Accepted Answer

A)  to any input,the more the input is hired.
B)  to labor,the more labor is hired,but not to land or capital.
C)  to capital inputs,the more is hired,but not to labor or land.
D)  to all inputs with the exception of land,the more those inputs are hired.E) B) and D)
F) None of the above

Question 16

Which of the following would be considered a "leisure" activity by economists?

Accepted Answer

A)  Making dinner
B)  Going skiing
C)  Cleaning the bathroom floor
D)  All of these are considered leisure activities.E) All of the above
F) A) and C)

Question 17

Sadie is getting ready to go to work where she earns $70 a day as a day laborer.Her friend Caroline calls her and asks her to go swimming with sharks for the day.Sadie decides to go with her.Sadie's choice implies that her opportunity cost of working:

Accepted Answer

A)  is greater than $70.
B)  is less than $70.
C)  is equal to $70.
D)  Cannot say without more information.E) A) and B)
F) B) and D)

Question 18

If it is a cultural norm to believe that "a busy person is an important person," then we would expect:

Accepted Answer

A)  the labor supply in that culture to be relatively greater at any wage.
B)  the labor demand in that culture to be relatively greater at any wage.
C)  the labor supply in that culture to be relatively lower at any wage.
D)  the labor demand in that culture to be relatively lower at any wage.E) None of the above
F) A) and B)

Question 19

If the price effect outweighs the income effect of a wage increase,the labor-supply curve will:

Accepted Answer

A)  slope downward.
B)  slope upward.
C)  be perfectly horizontal.
D)  be perfectly flat.E) A) and B)
F) A) and C)

Question 20

If we compare the Baby Boom generation of workers to the amount of workers who came before and will come after them,we realize that,all other things equal,the Baby Boomer's labor:

Accepted Answer

A)  supply will be relatively greater at any wage.
B)  supply will be relatively lower at any wage.
C)  demand will be relatively greater at any wage.
D)  demand will be relatively lower at any wage.E) A) and B)
F) None of the above

Exam 16: The Factors of Production

In order to see how the labor market works as a whole,we need to:

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If the price effect outweighs the income effect of a wage increase,the quantity of labor supplied will:

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If it is a cultural norm to believe that "a busy person is an important person," then we would expect:

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If the demand for baseballs increases,then as a result,it is highly likely that the demand for:

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For a competitive firm,the value of the marginal product:

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Sadie is getting ready to go to work where she earns $70 a day as a day laborer.Her friend Caroline calls her and asks her to go swimming with sharks for the day.Sadie decides to go with her.Sadie's choice implies that her opportunity cost of working:

Correct AnswerverifiedShow Answer

Holding other things constant,diminishing marginal productivity happens:

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The curve formed by plotting the value of the marginal product for workers is:

Correct AnswerverifiedShow Answer

The decrease in the quantity of labor supplied due to the greater demand for leisure caused by a higher income is called the:

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

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If the demand for oranges falls,as a result,it is highly likely that the demand for:

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An individual labor-supply curve represents:

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In a competitive labor market,if the demand for labor increases,labor demand will shift:

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In general,when people talk about investing,they mean that they:

Correct AnswerverifiedShow Answer

In general,as wages go up:

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If the price effect outweighs the income effect of a wage increase,the labor-supply curve will:

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If we compare the Baby Boom generation of workers to the amount of workers who came before and will come after them,we realize that,all other things equal,the Baby Boomer's labor:

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The factors of production are:

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Which of the following would be considered a "leisure" activity by economists?

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The term "economic rent" is used to describe:

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