Question 1

Use the following to answer question(s) : Demand and Supply in a Perfectly Competitive Labor Market
 
-(Exhibit: Demand and Supply in a Perfectly Competitive Labor Market)  Curve A is the:

Accepted Answer

A)   supply curve of labor faced by a firm.
B)   firm's demand for labor.
C)   MFCL.
D)   firm's marginal revenue curve.E) A) and B)
F) None of the above

Question 2

Throughout much of U.S.history, the supply of labor has _______ and the demand for labor has _______ .

Accepted Answer

A)   increased; decreased
B)   decreased; decreased
C)   increased; increased
D)   decreased; not changedE) A) and B)
F) None of the above

Question 3

If an increase in the use of one factor of production lowers the demand for the other, the two factors are:

Accepted Answer

A)   normal factors of production.
B)   substitute factors of production.
C)   inferior factors of production.
D)   complementary factors of production.E) All of the above
F) A) and D)

Question 4

An increase in the participation rate of women in the U.S.labor force:

Accepted Answer

A)   has shifted the supply of labor to the left.
B)   resulted in a faster increase in wages.
C)   has increased the demand for labor.
D)   has shifted the supply curve of labor to the right.E) A) and B)
F) C) and D)

Question 5

In equilibrium in a perfectly competitive labor market, the price of labor:

Accepted Answer

A)   is the same as the MFCL.
B)   is less than the MRPL.
C)   times MPL is equal to the MFCL.
D)   per unit of time is higher than the wage per unit of time.E) A) and D)
F) A) and C)

Question 6

In terms of labor supply, the income effect of a higher wage causes a(n) :

Accepted Answer

A)   decrease in leisure time.
B)   increase in the quantity of labor supplied.
C)   decrease in the quantity of labor supplied.
D)   reduction of leisure time to zero.E) B) and D)
F) None of the above

Question 7

A firm increases its purchases of a factor of production in a perfectly competitive market from 10 units to 11 units.If the market price of the factor is $20 per unit, the marginal factor cost for the eleventh unit is:

Accepted Answer

A)   $10.
B)   $20.
C)   $200.
D)   $220.E) None of the above
F) B) and D) B

Question 8

Factor demand is said to be derived demand because it:

Accepted Answer

A)   requires the use of other factors.
B)   depends on product demand.
C)   has a downward-sloping demand curve.
D)   has a constant marginal factor cost.E) B) and C)
F) C) and D)

Question 9

Use the following to answer question(s) : Wage Determination in Perfect Competition
 
-(Exhibit: Wage Determination in Perfect Competition)  If the price of the good that labor produces goes down, the demand for labor will _______ and the _______ .

Accepted Answer

A)   shift to the right; MRP of labor will fall
B)   shift to the left; MRP of labor will fall
C)   shift to the left; MFC of labor will rise
D)   shift to the right; MFC of labor will fallE) All of the above
F) None of the above

Question 10

For a firm buying factors of production in a perfectly competitive factor market:

Accepted Answer

A)   factors are hired where marginal revenue product is less than marginal factor cost.
B)   its marginal revenue product curve for a factor is its factor supply curve.
C)   the price of a factor will be greater than its marginal revenue product.
D)   the price of a factor will equal its marginal factor cost.E) None of the above
F) A) and C)

Question 11

Which of the following will not shift the labor supply curve?

Accepted Answer

A)   a change in attitude toward work
B)   changes in a spouse's income
C)   changes in expectations
D)   a change in the wage rateE) All of the above
F) B) and D)

Question 12

Use the following to answer question(s) :  
-(Exhibit: Marginal Revenue Product and Demand)  If the product price is $2 per unit, the marginal revenue product for the fifth unit of the variable input is:

Accepted Answer

A)   $0.
B)   $20.
C)   $40.
D)   $60.E) C) and D)
F) B) and C)

Question 13

A change in expectations will not shift the supply curve of labor.

Accepted Answer

A) True 
 B)False  False

Question 14

Labor generates more income in the economy than all other factors except capital.

Accepted Answer

A) True 
 B)False

Question 15

A firm is in equilibrium when the marginal factor cost is:

Accepted Answer

A)   less than the price of the factor.
B)   greater than the average product.
C)   equal to the average product.
D)   equal to the marginal revenue product.E) All of the above
F) C) and D)

Question 16

Use the following to answer question(s) : Wage Determination in Perfect Competition
 
-(Exhibit: Wage Determination in Perfect Competition)  A decrease in the marginal product of labor will result in:

Accepted Answer

A)   a higher wage.
B)   more labor being hired.
C)   an increase in the MRP of labor.
D)   a lower wage.E) A) and B)
F) B) and C)

Question 17

A firm increases its purchases of a factor of production in a perfectly competitive market from 10 units to 11 units.If the market price of the factor is $10 per unit, the marginal factor cost for the tenth unit is:

Accepted Answer

A)   $10.
B)   $20.
C)   $100.
D)   $110.E) None of the above
F) All of the above

Question 18

Use the following to answer question(s) : Wage Determination in Perfect Competition
 
-(Exhibit: Wage Determination in Perfect Competition)  An increase in population, all other things unchanged, will tend to:

Accepted Answer

A)   shift D₁ to the right.
B)   lead to an increase in S₁.
C)   raise the market wage.
D)   lead to a decrease in S₁.E) A) and B)
F) C) and D) B

Question 19

A change in the quantity demanded of a given factor of production will occur if:

Accepted Answer

A)   the productivity of that factor decreases.
B)   the productivity of that factor increases.
C)   the price of that factor rises.
D)   there is a decrease in the price of a substitute factor.E) None of the above
F) All of the above

Question 20

The demand for factors of production or resources is called a derived demand.Explain the reasoning behind this terminology.What are the determinants that lie behind the demand for factors?

Accepted Answer

The term "derived demand" refers to the ...

Exam 12: Wages and Employment in Perfect Competition

Use the following to answer question(s) : Demand and Supply in a Perfectly Competitive Labor Market -(Exhibit: Demand and Supply in a Perfectly Competitive Labor Market) Curve A is the:

Correct AnswerverifiedShow Answer

Throughout much of U.S.history, the supply of labor has _______ and the demand for labor has _______ .

Correct AnswerverifiedShow Answer

If an increase in the use of one factor of production lowers the demand for the other, the two factors are:

Correct AnswerverifiedShow Answer

An increase in the participation rate of women in the U.S.labor force:

Correct AnswerverifiedShow Answer

In equilibrium in a perfectly competitive labor market, the price of labor:

Correct AnswerverifiedShow Answer

In terms of labor supply, the income effect of a higher wage causes a(n) :

Correct AnswerverifiedShow Answer

A firm increases its purchases of a factor of production in a perfectly competitive market from 10 units to 11 units.If the market price of the factor is $20 per unit, the marginal factor cost for the eleventh unit is:

Correct AnswerverifiedB

Factor demand is said to be derived demand because it:

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Use the following to answer question(s) : Wage Determination in Perfect Competition -(Exhibit: Wage Determination in Perfect Competition) If the price of the good that labor produces goes down, the demand for labor will _______ and the _______ .

Correct AnswerverifiedShow Answer

For a firm buying factors of production in a perfectly competitive factor market:

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Which of the following will not shift the labor supply curve?

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Use the following to answer question(s) : -(Exhibit: Marginal Revenue Product and Demand) If the product price is $2 per unit, the marginal revenue product for the fifth unit of the variable input is:

Correct AnswerverifiedShow Answer

A change in expectations will not shift the supply curve of labor.

Correct AnswerverifiedFalse

Labor generates more income in the economy than all other factors except capital.

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A firm is in equilibrium when the marginal factor cost is:

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Use the following to answer question(s) : Wage Determination in Perfect Competition -(Exhibit: Wage Determination in Perfect Competition) A decrease in the marginal product of labor will result in:

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A firm increases its purchases of a factor of production in a perfectly competitive market from 10 units to 11 units.If the market price of the factor is $10 per unit, the marginal factor cost for the tenth unit is:

Correct AnswerverifiedShow Answer

Use the following to answer question(s) : Wage Determination in Perfect Competition -(Exhibit: Wage Determination in Perfect Competition) An increase in population, all other things unchanged, will tend to:

Correct AnswerverifiedB

A change in the quantity demanded of a given factor of production will occur if:

Correct AnswerverifiedShow Answer

The demand for factors of production or resources is called a derived demand.Explain the reasoning behind this terminology.What are the determinants that lie behind the demand for factors?

Correct AnswerAnswered by ExamLex AIThe term "derived demand" refers to the ...View AnswerShow Answer

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Use the following to answer question(s) : Wage Determination in Perfect Competition -(Exhibit: Wage Determination in Perfect Competition) If the price of the good that labor produces goes down, the demand for labor will _ and the _ .

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Answered by ExamLex AI
The term "derived demand" refers to the ...
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