Deck 17: Labor and Other Resources

Question 1

_____ demand is demand for a resource that depends on the demand for the final product.

A) Economic
B) Market
C) Derived
D) Monopoly

Answer 1

C

Question 2

The demand for labor is _____ demand.

A) an economic
B) a market
C) a monopoly
D) a derived

Answer 2

D

Question 3

_____ is the additional output from an additional unit of labor, holding the amount of physical capital and other inputs fixed.

A) Marginal revenue product
B) Total revenue
C) Marginal physical product
D) Total product

Answer 3

C

Question 4

ΔOutput/ΔLabor is the formula for the:

A) marginal revenue product of labor.
B) total revenue of labor.
C) marginal physical product of labor.
D) total product of labor.

Question 5

The formula for marginal physical product of labor is:

A) ΔOutput/ΔLabor.
B) ΔLabor/ΔOutput.
C) ΔRevenue/ΔLabor.
D) ΔLabor/ΔRevenue.

Question 6

The marginal physical product of labor is a short-run concept because:

A) labor is fixed.
B) all inputs except labor are fixed.
C) labor is variable.
D) all inputs except labor are variable.

Question 7

_____ is the additional revenue from an additional unit of labor, holding the amount of physical capital and other inputs fixed.

A) The marginal revenue product of labor
B) The marginal physical product of labor
C) Total revenue
D) Total product

Question 8

The marginal revenue product for labor (MRP_L) is the _____ for labor.

A) supply
B) marginal supply
C) demand
D) marginal demand

Question 9

The marginal revenue product for labor (MRP_L) is derived from the productivity of the worker and:

A) marginal cost.
B) marginal labor.
C) the revenue of the final output.
D) the demand for the final output.

Question 10

The marginal revenue product for labor (MRP_L) is derived from _____ and the demand for the final output.

A) marginal cost
B) marginal labor
C) the productivity of the worker
D) the final output revenue

Question 11

The marginal revenue product of labor is derived from _____ and the _____ the final output.

A) marginal cost; demand for
B) marginal cost; supply of
C) the productivity of the worker; demand for
D) the productivity of the worker; supply of

Question 12

The marginal revenue product of labor is a short-run concept because:

A) cost is fixed.
B) all inputs except labor are fixed.
C) cost is variable.
D) all inputs except labor are variable.

Question 13

In a competitive labor market, generally a firm can _____ at the going price of labor.

A) hire no additional workers
B) double the amount of workers
C) lay off 50% of existing workers
D) hire as many workers as needed

Question 14

In a competitive labor market, generally a firm can hire as many workers as needed:

A) at the market price of labor.
B) by doubling the hourly rate.
C) at minimum wage.
D) by advertising.

Question 15

_____ is the monetary payment for labor, which excludes the cost and value of benefits.

A) The price of labor
B) Total compensation
C) The wage
D) Take-home pay

Question 16

_____ is the total compensation that an employee receives from working.

A) The price of labor
B) The marginal revenue product
C) The wage
D) Take-home pay

Question 17

_____ includes the wages paid to workers, the cost of any benefits the worker receives, and other expenses related to employing a worker.

A) The price of labor
B) Marginal revenue product
C) The wage
D) Take-home pay

Question 18

(Figure: Labor in a Competitive Market 0) In the figure, the going price of labor in the competitive labor market is:

A) $50.
B) $250.
C) $350.
D) $450.

Question 19

(Figure: Labor in a Competitive Market 0) ​
Using the information in the figure, the firm would hire:

A) one worker.
B) three workers.
C) two workers.
D) six workers.

Question 20

(Figure: Labor in a Competitive Market A) In the figure, at equilibrium, the firm would hire _____ at a price of labor of _____.

A) one worker; $350
B) two workers; $400
C) three workers; $250
D) six workers; $50

Question 21

(Figure: Labor in a Competitive Market A) In the figure, if the price of labor is $150, the firm will hire:

A) five worker.
B) two workers.
C) three workers.
D) four workers.

Question 22

(Figure: Labor in a Competitive Market A) In the figure, if the price of labor is $450, the firm will hire:

A) one worker.
B) two workers.
C) three workers.
D) four workers.

Question 23

(Figure: Labor in a Competitive Market A) In the figure, if the firm hires two workers, the price of labor at equilibrium is:

A) $150.
B) $300.
C) $450.
D) $600.

Question 24

(Figure: Labor in a Competitive Market A) In the figure, if the firm hires three workers, the price of labor at equilibrium is:

A) $150.
B) $250.
C) $350.
D) $450.

Question 25

(Figure: Labor in a Competitive Market 0) In the figure, the _____ worker should not be hired.

A) first
B) second
C) third
D) fourth

Question 26

(Figure: Labor in a Competitive Market 0) In the figure, if the marginal revenue product of the fourth worker is $150, the firm should:

A) hire the fifth worker.
B) reduce employment to three workers.
C) do nothing.
D) reduce employment to two workers.

Question 27

In a competitive labor market, firms will hire workers up to the point where the marginal revenue product of labor equals the:

A) demand for labor.
B) supply of the product.
C) cost of capital
D) price of labor.

Question 28

Marginal _____ is the process of comparing the additional benefits of an activity with the additional cost.

A) product
B) analysis
C) economics
D) revenue

Question 29

The idea that when the amount of physical capital is fixed, an additional worker adds less to output than the previous worker is known as the:

A) marginal revenue product.
B) marginal physical product.
C) law of diminishing returns.
D) production function.

Question 30

(Figure: Diminishing Returns 0) In the table, after the _____ worker, diminishing returns set in.
$\begin{array}{|l|l|}\hline \begin{array}{l}\text { Labor } \\\text { (Workers) }\end{array} & \begin{array}{l}\text { Output } \\\text { (Total } \\\text { Product) }\end{array} \\\hline 1 & 25 \\\hline 2 & 56 \\\hline 3 & 90 \\\hline 4 & 100 \\\hline 5 & 105 \\\hline\end{array}$

A) second
B) third
C) fourth
D) fifth

Question 31

(Figure: MPP and MRP) Unit Price = $5
In the table, in a competitive labor market, if the prevailing price of labor is $150, this firm should hire _____ workers.
$\begin{array}{|l|l|l|l|l|} \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L} \\& \text { Product } & & \text { Revenue } & \\& \text { (Q) } & & \text { (TR) } &\\ \hline & 35 & 35 & ? & \$ 175 \\\hline 2 & 75 & 40 & ? & \$ 200 \\\hline 3 & 105 & 30 & \$ 525 & ? \\\hline 4 & 130 & 25 & \$ 650 & ? \\\hline 5 & 150 & 20 & \$ 750 & ?\\\hline\end{array}$

A) two
B) three
C) four
D) five

Question 32

(Figure: MPP and MRP) Unit Price = $5
In the table, in a competitive labor market, if the prevailing price of labor is $100, this firm should hire _____ workers.
$\begin{array}{|l|l|l|l|l|} \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L} \\& \text { Product } & & \text { Revenue } & \\& \text { (Q) } & & \text { (TR) } &\\ \hline & 35 & 35 & ? & \$ 175 \\\hline 2 & 75 & 40 & ? & \$ 200 \\\hline 3 & 105 & 30 & \$ 525 & ? \\\hline 4 & 130 & 25 & \$ 650 & ? \\\hline 5 & 150 & 20 & \$ 750 & ?\\\hline\end{array}$

A) two
B) three
C) four
D) five

Question 33

(Figure: MPP and MRP) Unit Price = $5
In the table, in a competitive labor market, if the prevailing price of labor is $125, this firm will hire _____ workers.
$\begin{array}{|l|l|l|l|l|} \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L} \\& \text { Product } & & \text { Revenue } & \\& \text { (Q) } & & \text { (TR) } &\\ \hline & 35 & 35 & ? & \$ 175 \\\hline 2 & 75 & 40 & ? & \$ 200 \\\hline 3 & 105 & 30 & \$ 525 & ? \\\hline 4 & 130 & 25 & \$ 650 & ? \\\hline 5 & 150 & 20 & \$ 750 & ?\\\hline\end{array}$

A) two
B) three
C) four
D) five

Question 34

(Figure: MPP and MRP) Unit Price = $5
In the table, what is total revenue if 1 worker is hired?
$\begin{array}{|l|l|l|l|l|} \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L} \\& \text { Product } & & \text { Revenue } & \\& \text { (Q) } & & \text { (TR) } &\\ \hline & 35 & 35 & ? & \$ 175 \\\hline 2 & 75 & 40 & ? & \$ 200 \\\hline 3 & 105 & 30 & \$ 525 & ? \\\hline 4 & 130 & 25 & \$ 650 & ? \\\hline 5 & 150 & 20 & \$ 750 & ?\\\hline\end{array}$

A) $35
B) $150
C) $175
D) $200

Question 35

(Figure: MPP and MRP) Unit Price = $5
In the table, what is total revenue if 2 workers are hired?
$\begin{array}{|l|l|l|l|l|} \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L} \\& \text { Product } & & \text { Revenue } & \\& \text { (Q) } & & \text { (TR) } &\\ \hline & 35 & 35 & ? & \$ 175 \\\hline 2 & 75 & 40 & ? & \$ 200 \\\hline 3 & 105 & 30 & \$ 525 & ? \\\hline 4 & 130 & 25 & \$ 650 & ? \\\hline 5 & 150 & 20 & \$ 750 & ?\\\hline\end{array}$

A) $175
B) $200
C) $375
D) $525

Question 36

(Figure: MPP and MRP) Unit Price = $5
In the table, what is the marginal revenue product of the third worker?
$\begin{array}{|l|l|l|l|l|} \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L} \\& \text { Product } & & \text { Revenue } & \\& \text { (Q) } & & \text { (TR) } &\\ \hline & 35 & 35 & ? & \$ 175 \\\hline 2 & 75 & 40 & ? & \$ 200 \\\hline 3 & 105 & 30 & \$ 525 & ? \\\hline 4 & 130 & 25 & \$ 650 & ? \\\hline 5 & 150 & 20 & \$ 750 & ?\\\hline\end{array}$

A) $100
B) $150
C) $200
D) $90

Question 37

(Figure: MPP and MRP) Unit Price = $5
In the table, what is the marginal revenue product of the fourth worker?
$\begin{array}{|l|l|l|l|l|} \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L} \\& \text { Product } & & \text { Revenue } & \\& \text { (Q) } & & \text { (TR) } &\\ \hline & 35 & 35 & ? & \$ 175 \\\hline 2 & 75 & 40 & ? & \$ 200 \\\hline 3 & 105 & 30 & \$ 525 & ? \\\hline 4 & 130 & 25 & \$ 650 & ? \\\hline 5 & 150 & 20 & \$ 750 & ?\\\hline\end{array}$

A) $100
B) $125
C) $150
D) $650

Question 38

(Figure: MPP and MRP) Unit Price = $5
In the table, what is the marginal revenue product of the fifth worker?
$\begin{array}{|l|l|l|l|l|} \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L} \\& \text { Product } & & \text { Revenue } & \\& \text { (Q) } & & \text { (TR) } &\\ \hline & 35 & 35 & ? & \$ 175 \\\hline 2 & 75 & 40 & ? & \$ 200 \\\hline 3 & 105 & 30 & \$ 525 & ? \\\hline 4 & 130 & 25 & \$ 650 & ? \\\hline 5 & 150 & 20 & \$ 750 & ?\\\hline\end{array}$

A) $100
B) $150
C) $200
D) $750

Question 39

Wei sells sandwiches for $10 each in a competitive product market. The marginal revenue product for the fourth worker is $60. The marginal physical product of the fourth worker is:

A) three.
B) four.
C) five.
D) six.

Question 40

Wei sells sandwiches for $10 each in a competitive product market. The marginal physical product for the third worker is eight. The marginal revenue product of the third worker is:

A) $40.
B) $60.
C) $80.
D) $100.

Question 41

The demand for labor is _____ in monopolistic competitive, oligopoly, and monopoly markets.

A) downward-sloping
B) upward-sloping
C) horizontal
D) vertical

Question 42

When marginal revenue declines with additional output, the labor demand curve:

A) slopes upward.
B) slopes downward.
C) shifts to the left.
D) shifts to the right.

Question 43

Diminishing returns results in a labor demand curve that:

A) slopes upward.
B) slopes downward.
C) shifts to the left.
D) shifts to the right.

Question 44

Changes in either the marginal physical product of labor (MPP_L) or the _____ will shift the demand curve for labor.

A) price of labor
B) marginal revenue (MR)
C) total revenue (TR)
D) total product (TP)

Question 45

Changes in either marginal revenue (MR) or _____ will shift the demand curve for labor.

A) the price of labor
B) total revenue (TR)
C) marginal physical product of labor (MPP_L)
D) total product (TP)

Question 46

The more productive a worker is, the higher the:

A) marginal product.
B) total revenue.
C) marginal physical product.
D) total product.

Question 47

Additional human capital and physical capital as well as new technology are all instrumental in improving labor:

A) productivity.
B) wages.
C) price.
D) marginal revenue.

Question 48

An increase in demand for highly skilled workers is a result of:

A) increases in labor cost.
B) advancements in technology.
C) a higher minimum wage.
D) increases in international trade.

Question 49

In the United States, the average worker is more productive than workers in many other nations due, in part, to:

A) increases in productivity.
B) increases in cost.
C) high levels of physical capital.
D) increases in international trade.

Question 50

When the price of the firm's product increases, marginal revenue obtained from selling additional units _____, which _____ marginal revenue product of labor (MRP_L).

A) increases; decreases
B) decreases; increases
C) decreases; decreases
D) increases; increases

Question 51

Which of the following is an example of physical capital?

A) rental income
B) labor
C) a corporate bond
D) machinery and equipment

Question 52

Which of the following is an example of physical capital?

A) rental income
B) labor
C) corporate stock
D) buildings

Question 53

The _____ states that the costs of producing a given level of output are minimized when the marginal physical product per dollar that is spent on every input is equalized.

A) law of demand
B) law of supply
C) cost-minimization rule
D) profit-maximization rule

Question 54

When the marginal product per dollar spent on every input is the same, costs are:

A) minimized.
B) maximized.
C) equalized.
D) accounting costs only.

Question 55

When the extra dollar spent on labor has the same benefit as the extra dollar spent on capital:

A) profits are minimized.
B) profits are maximized.
C) costs are minimized.
D) costs are maximized.

Question 56

_____ when the mix of capital and labor produces output at the lowest cost.

A) Profits are minimized
B) Profits are maximized
C) Costs are minimized
D) Costs are maximized

Question 57

A worker's wages will increase to the point where:

A) profits equal the price of labor.
B) marginal revenue product equals the price of labor.
C) revenue equals costs.
D) marginal revenue product equals costs.

Question 58

The _____ for any resource is the _____ of that resource.

A) cost; demand
B) marginal revenue product (MRP); cost
C) demand; marginal revenue product (MRP)
D) supply; marginal revenue product (MRP)

Question 59

_____ involves equating the marginal revenue product of each resource to the _____ of that resource.

A) The marginal physical product; cost
B) Profit minimization; price
C) Price; cost
D) Profit maximization; price

Question 60

The _____ effect on labor supply occurs when workers supply more labor at higher wages because the opportunity cost of leisure increases.

A) income
B) substitution
C) complementary
D) elasticity

Question 61

The _____ effect on labor supply occurs when workers supply less labor at higher wages because the additional income increases the demand for leisure.

A) income
B) substitution
C) complementary
D) elasticity

Question 62

A higher _____ will increase the opportunity cost of leisure.

A) employment rate
B) substitution rate
C) wage rate
D) elasticity

Question 63

A higher wage rate will increase the opportunity cost of:

A) employment.
B) substitution.
C) supply.
D) leisure.

Question 64

Leila receives a substantial raise in pay and decides to work fewer hours each week. This is an example of the _____ effect on the labor supply.

A) income
B) substitution
C) complementary
D) elasticity

Question 65

Lorenzo accepts his employer's offer of the opportunity to work overtime at a substantial increase in wages. This is an example of the _____ effect on the labor supply.

A) income
B) substitution
C) complementary
D) elasticity

Question 66

If Simone, who recently received an increase in wages, decides to work more hours, the _____ effect for leisure outweighs the _____ effect for her.

A) income; complementary
B) substitution; income
C) complementary; elasticity
D) income; substitution

Question 67

If Marcel, who recently received an increase in wages, decides to work fewer hours, the _____ effect for leisure outweighs the _____ effect for him.

A) income; complementary
B) substitution; income
C) complementary; elasticity
D) income; substitution

Question 68

There is generally _____ relationship between the price of labor and the quantity of labor that is supplied in the market.

A) a negative
B) a positive
C) no
D) an indirect

Question 69

Market labor supply curves generally have _____ slope.

A) a horizontal
B) a vertical
C) an upward
D) a downward

Question 70

_____ is a market with a single buyer.

A) A monopoly
B) A monopsony
C) An oligopoly
D) An oligopsony

Question 71

The labor supply curve for a monopsony has _____ slope.

A) a horizontal
B) a vertical
C) an upward
D) a downward

Question 72

With only one buyer, the market type is:

A) a monopoly.
B) a monopsony.
C) an oligopoly.
D) an oligopsony.

Question 73

In a monopsony labor market, wages are generally _____ the wages in a competitive labor market.

A) lower than
B) higher than
C) the same as
D) falling faster than

Question 74

In a monopoly, prices tend to be _____ than the competitive price, and in a monopsony, prices tend to be:

A) lower; higher.
B) higher; higher.
C) higher; lower.
D) lower; lower.

Question 75

Jake, owner of a steel plant in a rural area, employs over 90% of the workers in the area. This is an example of:

A) a monopsony.
B) a monopoly.
C) perfect competition.
D) an oligopoly.

Question 76

Increases in the market labor supply put _____ pressure on the price of labor.

A) little
B) no
C) downward
D) upward

Question 77

An increase in market labor supply can occur with an increase in immigration as well as:

A) a decrease in the working age population.
B) an unfavorable change in the taste and preference for work.
C) an increase in nonlabor income.
D) a reduction in taxes.

Question 78

A decrease in market labor supply can occur with a decrease in the working age population as well as:

A) an increase in immigration.
B) a favorable change in tastes and preferences for work.
C) a decrease in nonlabor income.
D) an increase in taxes.

Question 79

A _____ is an organization through which workers bargain collectively for wages, benefits, and work conditions.

A) labor union
B) farm collective
C) cooperative
D) cartel

Question 80

_____ is the negotiation of wages, benefits, and working conditions between an employer and a labor union.

A) A consensus
B) Collective bargaining
C) A detente
D) A compromise