Question 1

Labor-saving technology causes which of the following? (i)	The marginal productivity of labor increases.
(ii)	The marginal productivity of labor decreases.
(iii)	Labor demand shifts to the right.
(iv)	Labor demand shifts to the left.

Accepted Answer

The answer of Labor-saving technology causes which of the following?...

Question 2

A Luddite would be expected to fear

Accepted Answer

Luddites were a group of British textile workers who protested against the use of labor-saving technologies, such as weaving machines, during the Industrial Revolution. They feared that the machines would replace their jobs and reduce their wages. Therefore, a Luddite would be expected to fear labor-saving technologies.

Question 3

Along the horizontal axis of the production function we typically measure

Accepted Answer

Along the horizontal axis of the production function, we typically measure the quantity of input, such as labor or capital. The quantity of input is varied to determine its effect on the quantity of output, which is measured along the vertical axis of the production function. Revenue and the marginal product of the input are not typically measured along the horizontal axis.

Question 4

Charles owns one of the many bakeries in New York City.Which of the following events will lead to a decrease in Charles's demand for the services of bakers?

Accepted Answer

A decrease in the price of baked goods could lead to a decrease in Charles's demand for the services of bakers because customers may want to purchase more baked goods at the lower price, but may not necessarily want to purchase more goods overall. Option A does not necessarily impact Charles's demand for the services of bakers, as it relates to an increase in supply of potential employees. Option C could potentially increase the cost of employing bakers, but does not necessarily impact demand for their services.

Question 5

For a competitive,profit-maximizing firm,the demand curve for labor will shift in response to a change in the

Accepted Answer

The demand curve for labor is derived from the demand for the products that the firm produces. Therefore, a change in the price of the product will shift the demand for labor as the firm adjusts production levels to respond to changes in demand. Changes in wage rates may affect the quantity of labor demanded but do not shift the demand curve itself. Similarly, changes in the quantity of labor demanded do not shift the demand curve, but rather represent movements along the curve in response to changes in the wage rate.

Question 6

Aurora Custom Cabinets produces and sells custom kitchen cabinets.The firm has determined that if it hires 10 workers,it can produce 4 sets of cabinets per day.If it hires 11 workers,it can produce 4.2 sets of cabinets per day.It sells each set of cabinets for $2,000,and it pays each of its workers $200 per day.

Accepted Answer

The answer of Aurora Custom Cabinets produces and sells custom...

Question 7

Suppose that a new invention increases the marginal productivity of labor,shifting labor demand to the right.Such an invention would be an example of

Accepted Answer

Labor-augmenting technology is a type of technological advancement that increases the marginal productivity of labor, leading to a rightward shift in labor demand. This means that the same amount of labor can now produce more output, which in turn leads to increased demand for labor. Labor-saving technology, on the other hand, reduces the need for labor by replacing it with machines or automation. Luddite technology refers to the destruction of machinery by workers who are afraid that machines will replace their jobs. Supply-shifting technology is not a common term in economics, but it may refer to technological advancements that affect the supply of goods or services, such as improvements in production processes or transportation.

Question 8

Scenario 18-1
Gertrude Kelp owns three boats that participate in commercial fishing for fresh Pacific salmon off the coast of Alaska. As part of her business she hires a captain and several crew members for each boat. In the market for fresh Pacific salmon, there are thousands of firms like Gertrude's. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market.
-Refer to Scenario 18-1.Based on the given information,it is likely that Gertrude's firm has

Accepted Answer

Since Gertrude's contribution to the entire harvest of salmon is negligible relative to the size of the market, it is likely that she has no influence over either the price of salmon or the wages paid to crew members. In such a competitive market, no individual firm has enough market power to affect wages or prices.

Question 9

Which of the following events could increase the demand for labor?

Accepted Answer

An increase in the marginal productivity of workers would increase the profitability of hiring additional workers, thus increasing their demand. A decrease in output price or a decrease in the amount of capital available for workers to use would decrease the profitability of hiring additional workers, thus decreasing their demand.

Question 10

When we focus on the firm as a supplier of a good or a service,we assume that the firm is a profit maximizer.When we focus on the firm as a demander of labor,we assume that the firm's objective is to

Accepted Answer

Firms typically seek to maximize profits regardless of whether they are supplying goods or services or demanding labor. Assuming the firm is a profit maximizer provides a useful framework for analyzing its decision-making process.

Question 11

A sandwich shop hires workers to make sandwiches and sell them to customers.If the firm is competitive in both the market for sandwiches and in the market for sandwich-makers,then it has

Accepted Answer

A competitive firm has to accept the market price for its output (sandwiches) and the market wage rate for its input (sandwich-makers). It cannot influence either the price of sandwiches or the wage it pays to workers as it is a price taker in both markets. Therefore, the correct option is D.

Question 12

The term Luddite is used to describe

Accepted Answer

The term Luddite originated in the early 19th century when a group of English textile workers destroyed machinery that they believed was taking away their jobs. Today, the term Luddite is used to describe someone who opposes technological advances, particularly in relation to automation and job displacement.

Question 13

A competitive firm sells its output for $45 per unit.The marginal product of the 30th worker is 4 units of output per day;the marginal product of the 31st worker is 3 units of output per day.The firm pays its workers a wage of $150 per day.

Accepted Answer

The answer of A competitive firm sells its output for...

Question 14

Suppose that workers who sort outgoing mail for a company use rubber bands to group mail.If there were an increase in the supply of rubber bands,which of the following would happen in the market for labor?

Accepted Answer

An increase in the supply of rubber bands would likely make the task of sorting mail more efficient, potentially increasing the productivity of workers. This could lead to an increase in the demand for labor, as the company may want to hire more workers to take advantage of the increased efficiency.

Question 15

Along the vertical axis of the production function we typically measure

Accepted Answer

The answer of Along the vertical axis of the production...

Question 16

Dan owns one of the many bakeries in New York City.Which of the following events will lead to an increase in Dan's demand for the services of bakers? (i)	The price of muffins increases.(Muffins are Dan's specialty.)
(ii)	Dan adds three new ovens to the kitchen area to help the bakers work faster.
(iii)	Local bakers form a union to protect themselves from low wages.

Accepted Answer

An increase in the price of muffins (i) would likely increase demand for muffins, thus requiring more bakers. Adding new ovens (ii) increases production capacity, potentially increasing the need for more bakers to utilize the new equipment.

Question 17

Labor-augmenting technology causes which of the following? (i)	The marginal productivity of labor increases.
(ii)	The marginal productivity of labor decreases.
(iii)	Labor demand shifts to the right.
(iv)	Labor demand shifts to the left.

Accepted Answer

Labor-augmenting technology means that the efficiency of labor is enhanced, leading to an increase in the marginal productivity of labor. As a result, the demand for labor shifts to the right as firms seek to employ more labor at the same or higher wages due to the increased productivity. Therefore, option (i) and (iii) are correct, and options (ii) and (iv) are incorrect.

Question 18

Which of the following events could decrease the demand for labor?

Accepted Answer

A decrease in demand for the final product produced by labor would mean that firms are producing less or are less profitable, and therefore are likely to reduce their demand for labor. An increase in migrant workers or a decrease in the labor supply could affect the supply of labor, but not the demand for labor. An increase in the marginal productivity of workers would increase the demand for labor.

Question 19

Suppose that a new invention decreases the marginal productivity of labor,shifting labor demand to the left.Such an invention would be an example of

Accepted Answer

Labor-saving technology decreases the marginal productivity of labor and shifts labor demand to the left. This means that fewer workers are needed to produce the same amount of output, leading to a decrease in the demand for labor.

Question 20

Omega Custom Cabinets produces and sells custom bathroom vanities.The firm has determined that if it hires 10 workers,it can produce 20 vanities per week.If it hires 11 workers,it can produce 22 vanities per week.It sells each vanity for $800,and it pays each of its workers $1,000 per week.

Accepted Answer

The marginal profit from hiring the 11th worker is the additional revenue from selling 2 more vanities ($1,600) minus the cost of the additional worker ($1,000), which equals $600.

Quiz 18: The Markets for the Factors of Production

Labor-saving technology causes which of the following? (i) The marginal productivity of labor increases. (ii) The marginal productivity of labor decreases. (iii) Labor demand shifts to the right. (iv) Labor demand shifts to the left.