Question 1

Suppose that the labor market for life guards is initially in equilibrium. Then a new television series debuts which glamorizes the social opportunities for life guards. What happens to the equilibrium wage and quantity of life guards?

Accepted Answer

The answer of Suppose that the labor market for life...

Question 2

The effect of the Black Death in 14th-century Europe was to

Accepted Answer

The answer of The effect of the Black Death in...

Question 3

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?

Accepted Answer

Since land and labor are complements in the production function, a decrease in the availability of land would reduce the productivity of labor, leading to a decrease in wages earned by workers. However, since the supply of land has decreased, rents earned by landowners would increase as the demand for the remaining land would be higher. Therefore, wages would decrease, and rents would increase.

Question 4

Suppose that the labor market for high school chemistry teachers is initially in equilibrium. Chemistry teachers use laboratory chemicals as an important part of their jobs. New environmental regulations ban the use of many chemicals, which means that fewer laboratory chemicals are available for high school chemistry teachers to use in their jobs. In the market for high school chemistry teachers, the equilibrium wage

Accepted Answer

With fewer chemicals available, the marginal productivity of high school chemistry teachers decreases as they have fewer resources to work with. This will lead to a decrease in the demand for chemistry teachers and a decrease in the equilibrium wage. Note that the supply of chemistry teachers is not affected by this environmental regulation, since it is a factor outside of the labor market for such workers.

Question 5

Which of the following statements is correct?

Accepted Answer

The answer of Which of the following statements is correct?
...

Question 6

The Black Death in fourteenth-century Europe resulted in

Accepted Answer

The answer of The Black Death in fourteenth-century Europe resulted...

Question 7

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?

Accepted Answer

The answer of Suppose that a large tornado destroys the...

Question 8

A decrease in population can be expected to

Accepted Answer

A decrease in population means that there are fewer people to use land, which can lead to a decrease in demand for land. This decrease in demand can lead to a decrease in rents on land, as there are fewer people willing to pay for it.

Question 9

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?

Accepted Answer

With a significant decrease in population due to the virus, the labor supply decreases, and therefore, wages would increase due to the scarcity of workers. However, with the decrease in the population, the demand for food would also decrease, leading to a decrease in the demand for land, and hence a decrease in land rents. Since land and labor are complements in the production function, the decrease in land rents would also lead to a decrease in wages. However, the magnitude of the decrease in land rents is expected to be smaller than the increase in wages. Therefore, wages would increase, and rents would decrease.

Question 10

Suppose that the labor market for life guards is initially in equilibrium. Whistles are an important safety tool that life guards use as a part of their jobs. A fire destroys the largest factory that produces whistles. In the market for life guards the equilibrium wage

Accepted Answer

The destruction of the factory that produces whistles would decrease the marginal productivity of life guards since they are now unable to use this important safety tool. As a result, the demand for life guards would decrease, leading to a decrease in the equilibrium wage.

Question 11

Suppose that a large rogue wave destroys the (thankfully unoccupied) fleet of swordfish fishing boats docked in the Gloucester, Massachusetts harbor. What happens to the earnings of fishermen and women in Gloucester?

Accepted Answer

The reduction in the supply of fishing boats will decrease the number of boats available for fishermen and women to use, leading to a reduction in the quantity of fish caught. This will decrease the marginal productivities of the fishermen and women, as they will have fewer resources to work with. As a result, the equilibrium wage will fall as there will be a lower demand for labor in the industry.

Question 12

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?

Accepted Answer

With more fertile land available for growing corn, the demand for labor would increase while the demand for land would decrease, leading to an increase in wages and a decrease in rents. Since land and labor are complements, an increase in the quantity of one would increase the demand for the other, leading to an overall increase in wages but a decrease in rents due to the decrease in demand for land.

Question 13

Suppose that an industrial accident at a factory destroys a significant number of high-speed blenders that bartenders use to mix frozen drinks. What will happen in the labor market for bartenders?

Accepted Answer

The destruction of high-speed blenders reduces the capacity to serve customers efficiently, likely decreasing demand for bartenders as fewer frozen drinks can be made. This would lead to both lower wages and employment in the bartender labor market.

Question 14

Suppose that due to a severe drought in Texas, 100,000 farmers relocate from Texas to Louisiana. 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 Louisiana?

Accepted Answer

The answer of Suppose that due to a severe drought...

Question 15

An increase in population can be expected to

Accepted Answer

The answer of An increase in population can be expected...

Question 16

Suppose that the labor market for life guards is initially in equilibrium. Whistles are an important safety tool that life guards use as a part of their jobs. A fire destroys the largest factory that produces whistles. What happens to the equilibrium wage and quantity of life guards?

Accepted Answer

The answer of Suppose that the labor market for life...

Question 17

Suppose that a college physics experiment goes horribly wrong and releases an electronic pulse that renders all electronic equipment in the cities of Columbus, Cleveland and Cincinnati, Ohio permanently useless. No people are hurt, and no buildings are damaged. After the accident, the wages earned by Ohio workers will

Accepted Answer

The permanent loss of electronic equipment in major cities like Columbus, Cleveland, and Cincinnati would greatly hamper the productivity of businesses, making it difficult for firms to operate efficiently. This would lead to a decrease in the marginal productivities of Ohio workers, ultimately leading to a decrease in wages earned by Ohio workers.

Question 18

Suppose that the labor market for high school chemistry teachers is initially in equilibrium. Chemistry teachers use laboratory chemicals as an important part of their jobs. New environmental regulations ban the use of many chemicals, which means that fewer laboratory chemicals are available for high school chemistry teachers to use in their jobs. What happens to the equilibrium wage and quantity of high school chemistry teachers?

Accepted Answer

The answer of Suppose that the labor market for high...

Question 19

Suppose that the labor market for life guards is initially in equilibrium. Then swimming pool owners adopt a new labor-saving technology that uses computers to monitor the locations of swimmers in the pool. What happens to the equilibrium wage and quantity of life guards?

Accepted Answer

The answer of Suppose that the labor market for life...

Question 20

Suppose that the labor market for life guards is initially in equilibrium. Then the marginal productivity of life guards increases. What happens to the equilibrium wage and quantity of life guards?

Accepted Answer

An increase in marginal productivity means that each life guard is contributing more to the production process. This will increase the demand for life guards, causing the equilibrium wage and quantity to increase.

Quiz 18: The Markets for the Factors of Production

Suppose that the labor market for life guards is initially in equilibrium. Then a new television series debuts which glamorizes the social opportunities for life guards. What happens to the equilibrium wage and quantity of life guards?

The effect of the Black Death in 14th-century Europe was to

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?

Which of the following statements is correct?

The Black Death in fourteenth-century Europe resulted in

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 decrease in population can be expected to

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?

Suppose that the labor market for life guards is initially in equilibrium. Whistles are an important safety tool that life guards use as a part of their jobs. A fire destroys the largest factory that produces whistles. In the market for life guards the equilibrium wage

Suppose that a large rogue wave destroys the (thankfully unoccupied) fleet of swordfish fishing boats docked in the Gloucester, Massachusetts harbor. What happens to the earnings of fishermen and women in Gloucester?

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?

Suppose that an industrial accident at a factory destroys a significant number of high-speed blenders that bartenders use to mix frozen drinks. What will happen in the labor market for bartenders?

Suppose that due to a severe drought in Texas, 100,000 farmers relocate from Texas to Louisiana. 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 Louisiana?

An increase in population can be expected to

Suppose that the labor market for life guards is initially in equilibrium. Whistles are an important safety tool that life guards use as a part of their jobs. A fire destroys the largest factory that produces whistles. What happens to the equilibrium wage and quantity of life guards?

Suppose that the labor market for life guards is initially in equilibrium. Then swimming pool owners adopt a new labor-saving technology that uses computers to monitor the locations of swimmers in the pool. What happens to the equilibrium wage and quantity of life guards?

Suppose that the labor market for life guards is initially in equilibrium. Then the marginal productivity of life guards increases. What happens to the equilibrium wage and quantity of life guards?