Toàn bộ những gì bạn cần để qua môn kinh tế học, tài liệu này tập hợp những câu hỏi trắc nghiệm mới nhất của kinh tế vi mô năm 2018. Về nội dung tài liệu, với các khái niệm phổ biến và khái quát nhất về kinh tế vi mô cũng như những giải thích về các cơ chế hoạt động của nền kinh tế, bộ giáo trình bao gồm 23 phần cung cấp cho người đọc các kiến thức khá toàn diện và chuyên sâu về các nguyên lý kinh tế học như các lý thuyết cổ điển, các lý thuyết về phát triển: nền kinh tế trong dài hạn, các lý thuyết về vòng tròn kinh tế: nền kinh tế trong ngắn hạn, các yếu tố vi mô ẩn sau kinh tế vĩ mô, các tranh luận về chính sách vĩ mô… Tất cả đều được giải thích và đánh giá bởi một vị giáo sư kinh tế hàng đầu trên thế giới. Các khái niệm trong sách được định nghĩa rất rõ ràng, dễ nắm bắt, dễ hiểu, có tóm tắt các chương tạo điều kiện tốt nhất cho việc ôn tập
Chapter 18/The Markets For the Factors of Production 195 Chapter 18 The Markets For the Factors of Production TRUE/FALSE If the marginal productivity of the sixth worker hired is less than the marginal productivity of the fifth worker hired, then the addition of the sixth worker causes total output to decline ANS: F DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Marginal product of labor MSC: Interpretive In 2008, the total income of all U.S residents was approximately $120 billion ANS: F DIF: REF: 18-0 NAT: Analytic LOC: Labor markets TOP: Income MSC: Interpretive In order to calculate the value of the marginal product of labor, a manager must know the marginal product of labor and the wage rate of the worker ANS: F DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Value of the marginal product MSC: Interpretive Let L represent the quantity of labor and let Q represent the quantity of output Suppose a certain production function includes the points (L = 7, Q = 27), (L = 8, Q = 35), and (L = 9, Q = 45) Based on these three points, this production function exhibits diminishing marginal product ANS: F DIF: REF: 18-1 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Diminishing marginal product MSC: Applicative When a competitive firm hires labor up to the point at which the value of the marginal product of labor equals the wage, it also produces up to the point at which the price of output equals average variable cost ANS: F DIF: REF: 18-1 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Competitive firms | Profit maximization MSC: Applicative The demand for computer programmers is inseparably tied to the supply of computer software ANS: T DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand MSC: Interpretive If Firm X is a competitive firm in the market for labor, it has little influence over the wage it pays its employees ANS: T DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand MSC: Interpretive The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ ANS: T DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand MSC: Interpretive For competitive firms, the curve that represents the value of marginal product of labor is the same as the demand for labor curve ANS: T DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand | Value of the marginal product MSC: Interpretive 196 Chapter 18/The Markets For the Factors of Production 10 The value of the marginal product of labor can be calculated as the price of the final good minus the marginal product of labor ANS: F DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Value of the marginal product MSC: Analytical 11 To compute the value of the marginal product of capital, you should multiply the market price of the good by the marginal product of capital ANS: T DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Value of the marginal product MSC: Analytical 12 A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good ANS: F DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand | Value of the marginal product MSC: Analytical 13 A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the marginal product of labor ANS: F DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand | Marginal product of labor MSC: Analytical 14 Technological advances can cause the labor demand curve to shift ANS: T DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: MSC: Applicative Labor demand 15 In the United States, technological advances help explain persistently rising employment in the face of rising wages ANS: T DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand MSC: Applicative 16 The term Luddite refers to “tekkies” or people who are the first to adopt new technological advances ANS: F DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand MSC: Definitional 17 Labor-saving technological advances increase the marginal productivity of labor ANS: F DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand MSC: Definitional 18 Labor-saving technological advances decrease the marginal productivity of labor ANS: T DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand MSC: Definitional 19 Labor-augmenting technological advances increase the marginal productivity of labor ANS: T DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand MSC: Definitional 20 Labor-augmenting technological advances decrease the marginal productivity of labor ANS: F DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand MSC: Definitional Chapter 18/The Markets For the Factors of Production 197 21 An increase in a product’s price will shift the labor demand curve for that product to the left ANS: F DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand MSC: Definitional 22 The quantity available of one factor of production can affect the marginal product of other factors ANS: T DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Marginal product of labor | Factor markets MSC: Applicative 23 In a competitive market for labor, the equilibrium wage always equals the value of the marginal product ANS: T DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Value of the marginal product MSC: Applicative 24 From 1960 to 2000, inflation-adjusted wages increased by 131 percent in the U.S As a result, firms reduced the amount of labor they employed by nearly 20 percent ANS: F DIF: REF: 18-1 NAT: Analytic LOC: Labor markets TOP: Labor demand MSC: Interpretive 25 The labor-supply curve is affected by the trade-off between labor and leisure ANS: T DIF: REF: 18-2 NAT: Analytic LOC: Labor markets TOP: Labor supply MSC: Interpretive 26 The opportunity cost of leisure is impossible to measure, since we can't measure leisure time in dollars ANS: F DIF: REF: 18-2 NAT: Analytic LOC: Labor markets TOP: Labor supply MSC: Interpretive 27 The labor supply curve reflects how workers' decisions about the labor-leisure tradeoff respond to changes in the opportunity cost of leisure ANS: T DIF: REF: 18-2 NAT: Analytic LOC: Labor markets TOP: Labor supply MSC: Interpretive 28 Labor supply curves are always upward sloping ANS: F DIF: REF: NAT: Analytic LOC: Labor markets MSC: Interpretive 18-2 TOP: Labor supply 29 When an individual’s income goes up, that individual may choose to supply less labor, resulting in a backward-sloping labor supply curve ANS: T DIF: REF: 18-2 NAT: Analytic LOC: Labor markets TOP: Labor supply MSC: Interpretive 30 The supply of labor in any one market depends on the opportunities available in other markets ANS: T DIF: REF: 18-2 NAT: Analytic LOC: Labor markets TOP: Labor supply MSC: Applicative 31 Movements of workers from country to country can cause shifts in the labor supply curves for both countries ANS: T DIF: REF: 18-2 NAT: Analytic LOC: Labor markets TOP: Labor supply MSC: Applicative 198 Chapter 18/The Markets For the Factors of Production 32 If the demand for labor in a particular industry increases, the equilibrium wage in that industry will also increase ANS: T DIF: REF: 18-3 NAT: Analytic LOC: Labor markets TOP: Labor-market equilibrium MSC: Analytical 33 If the demand for labor decreases and the supply of labor is unchanged, then the opportunity cost of leisure will decrease ANS: T DIF: REF: 18-3 NAT: Analytic LOC: Understanding and applying economic models TOP: Opportunity cost | Wages MSC: Interpretive 34 Profit maximization by firms ensures that the equilibrium wage always equals the value of the marginal product of capital ANS: F DIF: REF: 18-3 NAT: Analytic LOC: Understanding and applying economic models TOP: Marginal product | Wages MSC: Interpretive 35 As the number of concrete workers in the United States falls, the wage paid to the remaining concrete workers will necessarily fall as well ANS: F DIF: REF: 18-3 NAT: Analytic LOC: Labor markets TOP: Labor-market equilibrium MSC: Applicative 36 Oil field workers' wages are directly tied to the world price of oil ANS: T DIF: REF: 18-3 NAT: Analytic LOC: Labor markets TOP: MSC: Applicative Labor-market equilibrium 37 Changes in supply and demand in the labor market will cause changes in wages ANS: T DIF: REF: 18-3 NAT: Analytic LOC: Labor markets TOP: Labor-market equilibrium MSC: Definitional 38 In general, less productive workers are paid less than more productive workers ANS: T DIF: REF: 18-3 NAT: Analytic LOC: Labor markets TOP: Labor-market equilibrium MSC: Applicative 39 Increases in productivity are not responsible for increased standards of living in the United States ANS: F DIF: REF: 18-3 NAT: Analytic LOC: Labor markets TOP: Factor markets MSC: Applicative 40 Average productivity can be measured as total output divided by total units of labor ANS: T DIF: REF: 18-3 NAT: Analytic LOC: Labor markets TOP: Factor markets MSC: Definitional 41 The rental price of capital is the price a person pays to own the capital indefinitely ANS: F DIF: REF: 18-4 NAT: Analytic LOC: Understanding and applying economic models TOP: Capital market MSC: Interpretive 42 The marginal product of land depends on the quantity of land that is available ANS: T DIF: REF: 18-4 NAT: Analytic LOC: Labor markets TOP: Land markets MSC: Interpretive Chapter 18/The Markets For the Factors of Production 199 43 For a snow-removal business, the capital stock would include inputs such as snow blowers and shovels ANS: T DIF: REF: 18-4 NAT: Analytic LOC: Labor markets TOP: Capital MSC: Definitional 44 The demand curve for each factor of production equals the value of the marginal product of that factor ANS: T DIF: REF: 18-4 NAT: Analytic LOC: Labor markets TOP: Factor markets MSC: Interpretive 45 Capital income does not include income paid to households for the use of their capital ANS: F DIF: REF: 18-4 NAT: Analytic LOC: Labor markets TOP: Capital income MSC: Definitional 46 Firms pay out a portion of their earnings in the form of interest and dividends, and those payments are a portion of the economy's capital income ANS: T DIF: REF: 18-4 NAT: Analytic LOC: Labor markets TOP: Capital income MSC: Definitional 47 When a firm decides to retain its earnings instead of paying dividends, the stockholders necessarily suffer ANS: F DIF: REF: 18-4 NAT: Analytic LOC: Labor markets TOP: Capital MSC: Interpretive 48 Capital owners are compensated according to the value of the marginal product of that capital ANS: T DIF: REF: 18-4 NAT: Analytic LOC: Labor markets TOP: Capital MSC: Interpretive 49 A change in the supply of any one factor alters the earnings of all the other factors ANS: T DIF: REF: 18-4 NAT: Analytic LOC: Labor markets TOP: Factor markets MSC: Interpretive 50 If the output price of a product rises, the demand for capital will increase, raising the rental price of capital ANS: T DIF: REF: 18-4 NAT: Analytic LOC: Labor markets TOP: Capital MSC: Applicative 51 Suppose the supply of capital decreases As a result, the quantity of capital used in production and the rental price of capital will both fall ANS: F DIF: REF: 18-4 NAT: Analytic LOC: Labor markets TOP: Capital MSC: Analytical 52 Suppose an influenza pandemic were to significantly decrease the population of a country We would predict a decrease in the marginal product of land in that country ANS: T DIF: REF: 18-4 NAT: Analytic LOC: Labor markets TOP: Land markets MSC: Analytical 200 Chapter 18/The Markets For the Factors of Production SHORT ANSWER Describe the difference between a diminishing marginal product of labor and a negative marginal product of labor Why would a profit-maximizing firm always choose to operate where the marginal product of labor is decreasing (but not negative)? ANS: Diminishing marginal product of labor means that the last worker hired contributes less to the total output of the firm than the worker who was hired just previous to her Negative marginal product of labor suggests that the last person hired actually causes total output of the firm to decline The firm evaluates the benefit of hiring (added revenue) versus the added cost of hiring (wage) In competitive markets, the cost and benefit converge only when marginal product declines If the marginal product of labor is negative, hiring an additional worker would actually decrease revenue A profit-maximizing firm would never choose to operate where marginal product is rising because hiring an additional worker would increase the “value” a worker contributes to the firm, while costs remain constant Thus, the firm will choose to operate where marginal product of labor is decreasing DIF: TOP: 2 REF: 18-1 Diminishing marginal product MSC: Analytical Explain how a firm values the contribution of workers to its profitability Would a profit-maximizing competitive firm ever stop increasing employment as long as marginal product is rising? Explain your answer ANS: A firm values the contribution of a worker by evaluating the worker's individual contribution to firm revenue This is done by multiplying the worker’s marginal product by the output price received for his production A profitmaximizing firm would never choose to operate where marginal product is rising because hiring an additional worker would increase the "value" a worker contributes to the firm and cost would remain constant As such, value and cost diverge as long a marginal product is increasing, and it is always more profitable to continue to hire more workers DIF: MSC: Analytical REF: 18-1 TOP: Marginal product of labor In the 1980s, the dangerous Ebola virus entered the United States through contaminated monkeys that were imported for use in medical experiments Suppose this virus had not been contained but had spread to the general population Assume that the virus is lethal in half of the people who are exposed to it Describe the resulting effect on labor productivity ANS: There are two possible direct effects: One effect would be that people would be absent from work if they caught the virus (but did not die) and so marginal productivity would be higher for the remaining workers The other effect is that people who caught the virus would die, the labor supply would decrease, and the remaining workers would have a higher marginal product of labor While the marginal productivity of the remaining workers increases, total output would still fall DIF: MSC: Analytical REF: 18-3 TOP: Marginal product of labor Using the theory of wage determination, explain why wages in developing countries where levels of capital are small, are typically quite low ANS: Wages are determined by the value of workers to firms In many developing countries, the level of capital is quite small, and so worker productivity is quite low Workers are not able to contribute as much value to a firm as their counterparts in countries that have more capital to complement their labor efforts Since marginal productivity is low, wages are low DIF: MSC: Analytical REF: 18-3 TOP: Capital Chapter 18/The Markets For the Factors of Production 201 A recent flood in the Midwest has destroyed much of the farmland that lies in fertile regions near the rivers Describe the effect of the flood on the marginal productivity of land, labor, and capital How would the flood affect the price of inputs? Provide some examples ANS: The flood would increase the marginal product of unflooded land, lower the marginal product of labor, and lower the marginal product of capital As such, the price of unflooded land should rise, and the prices of both labor and capital should fall DIF: MSC: Analytical REF: 18-3 TOP: Land markets Describe the process by which the market for capital and the market for land reach equilibrium As part of your description, elaborate on the role of the stock of the resource versus the flow of services from the resource ANS: Equilibriums in the markets for land and capital are governed by the value of marginal product for these factors relative to their supply One difference between these markets and the market for labor is that in land and capital markets there is both a rental value (flow) and purchase price (stock) The difference between the rental value and purchase price is reconciled by noting that in efficient markets, the purchase price should reflect the value of the stream of services provided by the land or capital (or the sum of rental values appropriately discounted) DIF: TOP: REF: 18-4 Capital markets | Land markets MSC: Analytical Describe the difference between the purchase price of capital and the rental price of capital If you know the value of marginal product from the flow of capital services, how would you determine the market price for the capital stock? ANS: The purchase price of capital is a reflection of the flow of value in using that capital to produce goods and services over its life span The rental price of capital is the period-specific contribution of capital to production of goods and services The discounted present value of rental prices over the life of the capital equipment should be equal to its purchase price DIF: MSC: Analytical REF: 18-4 TOP: Capital Sec00 - The Markets for the Factors of Production MULTIPLE CHOICE In 2008, the total income of all U.S residents was about a b c d $12 billion $14 billion $12 trillion $14 trillion ANS: D NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-0 TOP: Factor markets TOP: Factors of production Capital, labor, and land a b c d have derived demands are factors of production are inputs used in the production of goods and services All of the above are correct ANS: D NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-0 202 Chapter 18/The Markets For the Factors of Production Most of the total income earned in the U.S economy is ultimately paid to a b c d households in the form of wages and fringe benefits landowners in the form of rent landowners in the form of interest landowners in the form of profit ANS: A NAT: Analytic MSC: Definitional 18-0 TOP: Factor markets Since workers in the U.S economy receive most of the total income earned, which of the following factors of production is considered to be the most important? a b c d Profit Wages Interest Labor ANS: D NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 18-0 TOP: Factor markets How much of the income in the United States is earned by workers in the form of wages and fringe benefits? a b c d about 25 percent about 50 percent about 75 percent about 87 percent ANS: C NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-0 TOP: Factor markets Sec01 - The Markets for the Factors of Production - The Demand for Labor MULTIPLE CHOICE The production function is the a b c d increase in the amount of output from an additional unit of labor marginal product of an input times the price of output relationship between the quantity of inputs and output shift in labor demand caused by a change in the price of output ANS: C DIF: LOC: Labor markets MSC: Definitional REF: TOP: 18-1 NAT: Production function Analytic Table 18-1 Number of Workers (L) Output of Firm A 100 200 300 400 Output of Firm B 100 300 600 1,000 Output of Firm C 100 190 270 340 Output of Firm D 100 80 60 40 Refer to Table 18-1 Which firm’s production function exhibits diminishing marginal product? a b c d Firm A Firm B Firm C Firm D Chapter 18/The Markets For the Factors of Production 203 ANS: C DIF: LOC: Labor markets MSC: Analytical REF: TOP: 18-1 NAT: Analytic Diminishing marginal product Scenario 18-1 Harry owns a snow-removal business He hires workers to shovel driveways for him during the winter The first worker he hires can shovel twelve driveways in one day When Harry hires two workers, they can shovel a total of 22 driveways in one day When Harry hires a third worker, he shovels an additional eight driveways in one day Refer to Scenario 18-1 What is the marginal productivity of the second worker? a b c d 10 12 22 ANS: B DIF: LOC: Labor markets MSC: Analytical 18-1 NAT: Analytic Marginal product of labor 12 22 30 42 ANS: C DIF: LOC: Labor markets MSC: Analytical REF: TOP: 18-1 NAT: Analytic Marginal product of labor Refer to Scenario 18-1 Suppose that Harry pays each worker $80 per day and that he charges each customer $20 to have his driveway shoveled What is the value of the marginal product of labor for the second worker? a b c d $200 $240 $800 $960 ANS: A DIF: LOC: Labor markets MSC: Analytical REF: TOP: Refer to Scenario 18-1 What is the total productivity of three workers? a b c d 2 REF: TOP: 18-1 NAT: Analytic Value of the marginal product Refer to Scenario 18-1 Suppose that Harry pays each worker $80 per day and that he charges each customer $20 to have his driveway shoveled What is the value of the marginal product of labor for the third worker? a b c d $160 $640 $1,600 $2,400 ANS: A DIF: LOC: Labor markets MSC: Analytical REF: TOP: 18-1 NAT: Analytic Value of the marginal product 204 Chapter 18/The Markets For the Factors of Production Table 18-2 The following table shows the production function for a particular business The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis Labor Refer to Table 18-2 What is the marginal product of the third unit of labor? a b c d 40 units 50 units 60 units 180 units ANS: B DIF: LOC: Labor markets MSC: Analytical REF: TOP: 18-1 NAT: Analytic Marginal product of labor Refer to Table 18-2 What is the marginal product of the fifth unit of labor? a b c d 30 units 40 units 50 units 250 units ANS: A DIF: LOC: Labor markets MSC: Analytical Output 70 130 180 220 250 REF: TOP: 18-1 NAT: Analytic Marginal product of labor Refer to Table 18-2 Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day What is the value of the marginal product of labor for the second worker? a b c d $300 $650 $9,600 $20,800 ANS: A DIF: LOC: Labor markets MSC: Analytical REF: TOP: 18-1 NAT: Analytic Value of the marginal product 10 Refer to Table 18-2 Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day What is the value of the marginal product of labor for the fourth worker? a b c d $200 $1,000 $6,400 $32,000 ANS: A DIF: LOC: Labor markets MSC: Analytical REF: TOP: 18-1 NAT: Analytic Value of the marginal product 250 Chapter 18/The Markets For the Factors of Production 47 Suppose medical research provides evidence that eating bananas provides far greater health benefits than was previously thought The resulting increase in the demand for bananas a b c d increases the marginal product of banana pickers for any given number of banana pickers increases the value of the marginal product of banana pickers for any given number of banana pickers increases the supply of banana pickers All of the above are correct ANS: B NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-3 TOP: Labor-market equilibrium 48 Both theory and history point to a close relationship between increases in a b c d labor demand and increases in labor supply labor demand and decreases in real wages the productivity of labor and increases in real wages interest rates and decreases in real wages ANS: C NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 18-3 TOP: Labor-market equilibrium 49 Suppose that workers immigrate to Minnesota from Canada Which of the following correctly describes what would happen in the market for labor in Minnesota? a b c d The equilibrium wage would increase, and the quantity of labor would increase With more workers, the added output from an extra worker is larger The equilibrium wage would decrease, and the quantity of labor would decrease With fewer workers, the added output from an extra worker is smaller The equilibrium wage would decrease, and the quantity of labor would increase With more workers, the added output from an extra worker is smaller The equilibrium wage would decrease, and the quantity of labor would increase With more workers, the added output from an extra worker is larger ANS: C NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 18-3 TOP: Labor-market equilibrium Figure 18-7 50 Refer to Figure 18-7 When the relevant labor supply curve is S1 and the labor market is in equilibrium, a b c d the wage is W1 the opportunity cost of leisure to workers is W1 the value of the marginal product of labor to firms is W1 All of the above are correct Chapter 18/The Markets For the Factors of Production 251 ANS: D NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-3 TOP: Labor-market equilibrium 51 Refer to Figure 18-7 The shift of the labor supply curve from S1 to S2 could possibly be explained by a b c d technological progress a decrease in the price of the firm’s output a change in workers' attitudes toward the work-leisure tradeoff an increase in the price of the firm’s output ANS: C NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-3 TOP: Labor-market equilibrium 52 Refer to Figure 18-7 The shift of the labor supply curve from S1 to S2 could possibly be explained by a b c d a change in workers' attitudes toward the work-leisure tradeoff decreases in wages in other labor markets immigration of workers into the region or country All of the above are correct ANS: D NAT: Analytic MSC: Analytical 53 DIF: REF: LOC: Labor markets 18-3 TOP: Labor-market equilibrium Refer to Figure 18-7 Assume W1 = $20 and W2 = $18 and the market is always in equilibrium Then the shift of the labor supply curve from S1 to S2 a b c d increases the value of the marginal product of labor by $2 decreases the value of the marginal product of labor by $2 decreases the value of the marginal product of labor by more than $2 does not change the value of the marginal product of labor ANS: B NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-3 TOP: Labor-market equilibrium 54 Refer to Figure 18-7 If the relevant labor supply curve is S2 and the current wage is W1, a b c d there is a surplus of labor the quantity of labor demanded exceeds the quantity of labor supplied an increase in the minimum wage could be employed to restore equilibrium in the market firms will need to raise the wage to restore equilibrium ANS: A NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-3 TOP: Labor-market equilibrium Sec04 - The Markets for the Factors of Production - The Other Factors of Production-Land and Capital MULTIPLE CHOICE Economists define capital as the a b c d accumulation of goods produced in the past that are being used in the present to produce new goods and services the goods and services that are most affected by changes in technology factors of production that can be rented by firms factors of production that can be purchased by firms ANS: A NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-4 TOP: Capital 252 Chapter 18/The Markets For the Factors of Production Which of the following statements is correct? a b c d The market for capital is unlike the market for labor because the rental price of capital is unaffected by the marginal product of capital, whereas the price of labor is affected by the marginal product of labor The market for capital is unlike the market for labor because the purchase price of capital is unaffected by the marginal product of capital, whereas the price of labor is affected by the marginal product of labor The market for capital is like the market for labor because the rental price of capital is affected by the marginal product of capital, and the price of labor is affected by the marginal product of labor Both a and b are correct ANS: C NAT: Analytic MSC: Interpretive b c d TOP: Capital markets As the supply of vacation land decreases, the marginal productivity of the remaining land will decrease; thus rents will decrease As the supply of vacation land decreases, the marginal productivity of the remaining land will increase; thus, rents will decrease As the supply of vacation land decreases, the marginal productivity of the remaining land will increase; thus, rents will increase There would be no change in the rents earned by the other landowners because the effects of supply and demand would exactly cancel each other out ANS: C NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 18-4 TOP: Land markets Suppose that a college physics experiment goes horribly wrong and releases an electronic pulse that renders all electronic equipment in the city of San Francisco, California permanently useless No people are hurt, and no buildings are damaged Which of the following statements correctly describes the wages earned by California workers after the accident? a b c d The marginal productivities of workers will increase and wages will increase The marginal productivities of workers will decrease and wages will decrease The marginal productivities of workers will increase and wages will decrease The marginal productivities of workers will decrease and wages will increase ANS: B NAT: Analytic MSC: Interpretive 18-4 Suppose that a violent earthquake causes the uninhabited Hawaiian island of Mokuauia (also called Goat Island) to fall into the Pacific Ocean No people are killed or injured, and since the island is undeveloped, no buildings are destroyed The island was a source of tourist income for Hawaiian landowners Which of the following statements correctly describes the rents earned by the people who own land on the surrounding islands? a DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 18-4 TOP: Capital markets Suppose that a large tornado destroys the fleet of fire trucks for the city of Omaha, Nebraska What happens to the earnings of firefighters in Omaha? a b c d The reduction in the supply of fire trucks reduces the marginal productivities of Omaha firefighters, which causes the equilibrium wage to fall The reduction in the supply of fire trucks increases the marginal productivities of Omaha firefighters, which causes the equilibrium wage to fall The reduction in the supply of fire trucks reduces the marginal productivities of Omaha firefighters, which causes the equilibrium wage to rise The reduction in the supply of fire trucks increases the marginal productivities of Omaha firefighters, which causes the equilibrium wage to rise ANS: A NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 18-4 TOP: Capital markets Chapter 18/The Markets For the Factors of Production 253 The demand curve for capital a b c d is vertical is horizontal is derived from households’ decisions concerning saving and spending reflects the marginal productivity of capital ANS: D DIF: REF: 18-4 NAT: Analytic LOC: Understanding and applying economic models TOP: Capital market MSC: Interpretive Consider the market for land Suppose the value of the marginal product of land decreases Holding all else constant, what will happen to the equilibrium rental price for land? a b c d The equilibrium rental rate increases The equilibrium rental rate decreases The equilibrium rental rate does not change It is not possible to determine what will happen to the equilibrium rental rate ANS: B NAT: Analytic MSC: Analytical 18-1 | 18-3 | 18-4 TOP: Factor markets When economists refer to a firm's capital, they are likely to be using the term to describe the a b c d markets for final goods and services stock of equipment and buildings used in production amount of bank financing used by the firm amount of financing provided by the equity markets ANS: B NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 18-4 TOP: Capital The accumulation of machinery and buildings used in the production of new goods and services is referred to as a b c d production factors output factors capital equity ANS: C NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-4 TOP: Capital 10 If one were to consider a university as a business, the computers in the computer labs would be regarded by economists as a b c d technology flows mechanization flows part of the university's stock of capital a flow of services from the university's stock of capital ANS: C NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 18-4 TOP: Capital 11 The purchase price of capital is a b c d the value of the capital to the firm always less than the rental price the price received from the flow of some capital services the price a person pays to own that factor of production indefinitely ANS: D NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-4 TOP: Capital 254 Chapter 18/The Markets For the Factors of Production 12 The owners of capital resources are compensated according to the a b c d purchase price of the capital stock marginal product of capital value of the marginal product of capital absolute level of production of final goods and services ANS: C NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 18-4 TOP: Capital TOP: Factor markets 13 The marginal product of any factor of production depends on a b c d the quantity of the factor used the price of the final good the demand for the final good All of the above are correct ANS: A NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 18-4 14 Because of diminishing returns, a factor in abundant supply has a b c d a high marginal product and a high rental price a high marginal product and a low rental price a low marginal product and a high rental price a low marginal product and a low rental price ANS: D NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 18-4 TOP: Factor markets TOP: Factor markets 15 Because of diminishing returns, a factor in scarce supply has a b c d a low marginal product and a low rental price a low marginal product and a high rental price a high marginal product and a low rental price a high marginal product and a high rental price ANS: D NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-4 16 A change in the supply of one factor of production a b c d will not change either the marginal productivities or the prices of other factors will not change the prices of other factors, but it may change their marginal productivities will not change the marginal productivities of other factors, but it may change their prices changes the marginal productivities and the prices of other factors ANS: D NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 18-4 TOP: Factor markets 17 The equilibrium rental income paid to the owners of capital at any point in time equals the a b c d marginal product of capital value of the marginal product of capital percentage of profits paid out to stockholders in the form of dividends equilibrium purchase price of capital ANS: B NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 18-4 18 In economics, the term capital is used to refer to a b c d money stocks and bonds equipment and structures used in production All of the above are correct TOP: Capital markets Chapter 18/The Markets For the Factors of Production 255 ANS: C NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-4 TOP: Capital 19 The distinction between purchase price and rental price applies to which factor(s) of production? a b c d Land only Capital only Land and capital only Land, capital, and labor ANS: C NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 18-4 TOP: Factor markets 20 Which term below refers to "the accumulation of goods produced in the past that are being used in the present to produce new goods and services?" a b c d Inventories Products Factors of production Capital ANS: D NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-4 TOP: Capital 21 "The firm hires the factor up to the point where the value of the factor's marginal product is equal to the factor's price." This statement applies to which factor of production? a b c d Labor Land Capital All of the above are correct ANS: D NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 18-4 TOP: Factor markets 22 Capital is paid according to the value of its marginal product a b c d only if earnings from capital are paid to households in the form of dividends only if earnings from capital are kept within firms as retained earnings regardless of whether earnings from capital are paid to households in the form of dividends or whether those earnings are kept within firms as retained earnings None of the above are correct; capital is a factor of production for which earnings are unrelated to the value of marginal product ANS: C NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-4 TOP: Capital 23 Which of the following best describes the economy's stock of equipment and structures? a b c d Capital Aggregate demand Long-term inventory Aggregate stock ANS: A NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-4 24 For a computer software firm, capital could be thought of as (i) (ii) (iii) The firm's computer programmers The wages the firm pays to its computer programmers Computer equipment TOP: Capital 256 Chapter 18/The Markets For the Factors of Production a b c d (i) only (ii) only (iii) only (i) and (iii) ANS: C NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-4 TOP: Capital 25 For a retail gasoline station, which of the following would qualify as capital? (i) (ii) (iii) The gas tanks and pumps The service attendants' time The plot of land on which the station sits a b c d (i) only (iii) only (i) and (iii) (ii) and (iii) ANS: A NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-4 TOP: Capital TOP: Factor markets TOP: Factor markets TOP: Factor markets 26 The Black Death in fourteenth-century Europe resulted in a b c d a lower marginal product of land a lower marginal product of labor of surviving workers economic hardship for surviving peasants economic prosperity for surviving landowners ANS: A NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-4 27 The Black Death in fourteenth-century Europe resulted in a b c d a lower marginal product of labor of surviving workers a higher marginal product of labor of surviving workers economic hardship for surviving peasants economic prosperity for surviving landowners ANS: B NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-4 28 The Black Death in fourteenth-century Europe resulted in a b c d a lower marginal product of labor of surviving workers a higher marginal product of land economic hardship for surviving peasants economic hardship for surviving landowners ANS: D NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-4 29 Suppose that the wage paid to workers who detassel corn rises What happens in the market for workers who weed soybean fields, given that workers who detassel corn can easily work weeding soybean fields? a b c d The demand curve for soybean workers increases The demand curve for soybean workers decreases The supply curve for soybean workers increases The supply curve for soybean workers decreases Chapter 18/The Markets For the Factors of Production 257 ANS: D NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 18-2 | 18-4 TOP: Labor supply 30 Which of the following accurately describes how earnings from capital eventually get paid to households? a b c d Households can own a stock of capital and rent it to firms Households lend money to firms, who then pay interest to the households Households that own stock in firms receive dividends All of the above are correct ANS: D NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-4 TOP: Capital income 31 Rent, interest, and profit are all forms of income paid to the owners of a b c d aggregate stock aggregate demand firms and not-for-profit organizations land and capital ANS: D NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 18-4 TOP: Factor markets TOP: Capital income 32 The rental price of capital is a b c d determined outside the realm of factor markets the price paid to use capital for a limited time period the price paid for ownership of the capital always more than the purchase price ANS: B NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 18-4 33 The rental price of capital is determined by a b c d the forces of supply and demand in capital markets the amount of equity that is generated in equity markets the amount of bond financing used by profit-maximizing firms the amount of dividends paid out to stockholders by profit-maximizing firms ANS: A NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 18-4 TOP: Capital income TOP: Capital income 34 Who receives income from capital in the United States? a b c d Bank depositors Bondholders Stockholders All of the above are correct ANS: D NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 18-4 35 Which of the following qualify as part of our economy's capital income? a b c d Wages paid to workers Interest paid to the owners of corporate bonds Salaries paid to chief executive officers of corporations All of the above are correct ANS: B NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 18-4 TOP: Capital income 258 Chapter 18/The Markets For the Factors of Production 36 Consider the market for capital equipment Suppose the value of the marginal product of capital equipment increases Holding all else constant, what will happen to the equilibrium rental price of capital equipment? a b c d The equilibrium rental price of capital equipment increases The equilibrium rental price of capital equipment decreases The equilibrium rental price of capital equipment does not change It is not possible to determine what will happen to the equilibrium rental price of capital equipment ANS: A NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-1 | 18-3 | 18-4 TOP: Capital markets 37 Consider the market for capital equipment Suppose the price of firms’ output increases Holding all else constant, what will happen to the equilibrium rental price of capital equipment? a b c d The equilibrium rental price of capital equipment increases The equilibrium rental price of capital equipment decreases The equilibrium rental price of capital equipment does not change It is not possible to determine what will happen to the equilibrium rental price of capital equipment ANS: A NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-1 | 18-3 | 18-4 TOP: Capital markets 38 Consider the market for capital equipment Suppose the value of the marginal product of capital equipment increases Holding all else constant, what will happen to the equilibrium quantity of capital equipment? a b c d The equilibrium quantity of capital equipment increases The equilibrium quantity of capital equipment decreases The equilibrium quantity of capital equipment does not change It is not possible to determine what will happen to the equilibrium quantity of capital equipment ANS: A NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-1 | 18-3 | 18-4 TOP: Capital markets 39 Consider the market for capital equipment Suppose the market price of firms’ output decreases Holding all else constant, what will happen to the equilibrium quantity of capital equipment? a b c d The equilibrium quantity of capital equipment increases The equilibrium quantity of capital equipment decreases The equilibrium quantity of capital equipment does not change It is not possible to determine what will happen to the equilibrium quantity of capital equipment ANS: B NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-1 | 18-3 | 18-4 TOP: Capital markets 40 As a result of a fire, a small business owner loses some of her computers and other equipment If the property of diminishing returns applies to all factors of production, she should expect to see a b c d an increase in the marginal productivity of her remaining capital and an increase in the marginal productivity of her labor an increase in the marginal productivity of her remaining capital and a decrease in the marginal productivity of her labor a decrease in the marginal productivity of her remaining capital and an increase in the marginal productivity of her labor a decrease in the marginal productivity of her remaining capital and a decrease in the marginal productivity of her labor ANS: B NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-4 TOP: Capital markets Chapter 18/The Markets For the Factors of Production 259 41 The rental price of land is a b c d the price paid for ownership of the land the price paid for the flow of services from land over a specified time period always more than the purchase price All of the above are correct ANS: B NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 18-4 TOP: Land markets TOP: Land markets 42 Owners of land are compensated according to the a b c d absolute level of production from the land number of laborers the land can support purchase price of the land stock value of the marginal product of land ANS: D NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 18-4 43 Suppose the government designates certain areas within a community to be "wetlands," making it illegal to build on the land What happens to land not classified as "wetlands" within the community? (i) (ii) (iii) The price of non-wetland land will rise The marginal product of non-wetland land will fall The marginal product of non-wetland land will rise a b c d (i) and (ii) (ii) and (iii) (i) and (iii) (ii) only ANS: C NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-4 TOP: Land markets 44 As a result of severe flooding, a farmer loses half of his productive farmland He should expect to see the marginal productivity of his remaining land a b c d increase remain unchanged decrease, but remain positive decrease and become negative ANS: A NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 18-4 TOP: Land markets 45 As a result of severe flooding, a farmer loses half of his productive farmland If the property of diminishing returns applies to all factors of production, he should expect to see a b c d an increase in the marginal productivity of his remaining land and an increase in the marginal productivity of his labor an increase in the marginal productivity of his remaining land and a decrease in the marginal productivity of his labor a decrease in the marginal productivity of his remaining land and an increase in the marginal productivity of his labor a decrease in the marginal productivity of his remaining land and a decrease in the marginal productivity of his labor ANS: B NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-4 TOP: Land markets 260 Chapter 18/The Markets For the Factors of Production 46 The equilibrium rental income paid to landowners at any point in time equals the a b c d purchase price of land value of the marginal product of land marginal product of land wage paid to laborers ANS: B NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 18-4 TOP: Land markets TOP: Land markets 47 The current value of the marginal product of land influences a b c d the demand for land the equilibrium rental price of land the equilibrium purchase price of land all of the above ANS: D NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 18-4 48 Suppose that a rare virus infects and kills a significant percentage of the population Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and the rents earned by landowners? a b c d Both wages and rents would increase Both wages and rents would decrease Wages would increase, and rents would decrease Wages would decrease, and rents would increase ANS: C NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-4 TOP: Land markets 49 Suppose that due to flooding in Louisiana, 100,000 farmers relocate from Louisiana to Texas Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and the rents earned by landowners in Texas? a b c d Both wages and rents would increase Both wages and rents would decrease Wages would increase, and rents would decrease Wages would decrease, and rents would increase ANS: D NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-4 TOP: Land markets 50 Suppose that a toxic waste spill renders half of the land in New Jersey uninhabitable Assuming that land and labor are complements in the production function, what would happen to the wages earned by workers and rents earned by landowners? a b c d Both wages and rents would increase Both wages and rents would decrease Wages would increase, and rents would decrease Wages would decrease, and rents would increase ANS: D NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-4 TOP: Land markets 51 Suppose that a large lake in the middle of Minnesota evaporates, leaving more fertile farm land for growing corn available Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and rents earned by landowners? a b c d Both wages and rents would increase Both wages and rents would decrease Wages would increase, and rents would decrease Wages would decrease, and rents would increase Chapter 18/The Markets For the Factors of Production 261 ANS: C NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 18-4 TOP: Land markets TOP: Labor-market equilibrium TOP: Labor-market equilibrium 52 A decrease in population can be expected to a b c d increase the marginal product of land decrease the supply of land decrease the rents on land increase the demand for land ANS: C NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 18-3 53 An increase in population can be expected to a b c d increase the marginal product of land decrease the supply of land decrease the rents on land decrease the demand for land ANS: A NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 18-3 Sec05 - The Markets for the Factors of Production - Conclusion MULTIPLE CHOICE According to the neoclassical theory of distribution, the wages paid to workers a b c d reflect the market prices of the goods those workers produce reflect the degree of market power held by the firms that pay those wages fail to reflect those workers’ opportunity costs of leisure are unrelated to the forces of supply and demand ANS: A DIF: REF: 18-5 NAT: Analytic LOC: Understanding and applying economic models TOP: Neoclassical theory of distribution MSC: Interpretive ... worker is a b c d 90 units of output 105 units of output 210 units of output 330 units of output ANS: A DIF: REF: 18- 1 LOC: The study of economics, and definitions of economics MSC: Applicative... product of labor 18 Refer to Figure 18- 1 The marginal product of the fourth worker is a b c d 60 units of output 75 units of output 285 units of output 345 units of output ANS: A DIF: REF: 18- 1... TOP: 18- 1 NAT: Analytic Value of the marginal product Table 18- 8 Days of Labor Units of Output 10 18 25 30 33 34 Marginal Profit $300 $100 BB -$200 228 Chapter 18/ The Markets For the Factors of