Question 1

Choose the statement that is incorrect.

Accepted Answer

Not all labour markets are competitive. Some industries or professions may have limited competition due to factors such as specialized skills or geographic location.

Question 2

Firms hire labour

Accepted Answer

Firms hire labor to maximize profit. By hiring labor, firms hope to increase productivity and ultimately generate more revenue. This is achieved by ensuring that the additional cost of hiring labor is less than the additional revenue generated by the increased productivity.

Question 3

Suppose a gift shop in Corner Brook, Newfoundland, hires workers to personalize ornaments for Christmas.The store sells the personalized ornaments for $6 each.The value of marginal product of this store's fourth worker is $60.The marginal product of the fourth worker is

Accepted Answer

The value of marginal product of the fourth worker is $60, which means that the fourth worker produces $60 worth of ornaments.

Since each ornament sells for $6, the fourth worker must produce 10 ornaments to generate a value of $60 ($6 x 10 = $60).

Therefore, the marginal product of the fourth worker is 10 ornaments, which corresponds to answer choice B.

Question 4

Natural resources that are depleted as they are used

Accepted Answer

Nonrenewable natural resources, such as fossil fuels and minerals, are depleted as they are used and cannot be replenished in a short period of time, so they should be used carefully and efficiently.

Question 5

Choose the statement that is incorrect.

Accepted Answer

The answer of Choose the statement that is incorrect.
...

Question 6

Coal is an example of

Accepted Answer

Coal is a nonrenewable natural resource because it cannot be replenished or regenerated within a short period of time, making it finite and subject to depletion.

Question 7

Water from the Mackenzie River is an example of

Accepted Answer

The Mackenzie River is a renewable natural resource, as it constantly flows and replenishes itself over time. Therefore, the water from the river can be used repeatedly without running out or becoming depleted.

Question 8

Tim is opening a new online store.He plans to hire two workers at $10 an hour.Tim is also considering buying or leasing some new computers.The purchase price of a computer is $900 and after three years it is worthless.The annual cost of leasing a computer is $450.The price of capital equipment is ________.The rental rate of capital is ________.

Accepted Answer

The answer of Tim is opening a new online store.He...

Question 9

The Brown's Egg store in Lethbridge Alberta hires workers to paint eggs.The price of an egg is $2.50.The value of marginal product of this store's fifth worker is $25.The marginal product of the fifth worker is

Accepted Answer

The answer of The Brown's Egg store in Lethbridge Alberta...

Question 10

An example of a nonrenewable natural resource is

Accepted Answer

Oil is a fossil fuel and takes millions of years to form. Once it is extracted and used, it cannot be replaced at the same rate it is being consumed. Therefore, oil is a nonrenewable natural resource. Choice B, C, D, and E are not nonrenewable natural resources.

Question 11

To maximize profit, the firm must equate the

Accepted Answer

The firm must equate the value of marginal product (VMP) to the factor price in order to maximize profit. The VMP is the additional revenue generated from one additional unit of the factor of production, while the factor price is the cost incurred by the firm to hire that unit of factor of production. Therefore, the firm must hire additional units of the factor of production as long as its VMP is greater than or equal to the factor price. This ensures that the firm is able to generate enough revenue from the additional units of the factor of production to cover its cost and maximize its profit.

Question 12

Use the table below to answer the following questions.
Table 18.2.1
 
-Refer to Table 18.2.1.If the firm can sell all the output it wants for the price of $5 a unit, what is the value of marginal product of the 6th worker?

Accepted Answer

To calculate the value of marginal product, we need to calculate the additional output produced by the 6th worker and multiply it by the price at which the firm can sell the output. 
From the table, we can see that the total product increases from 90 units to 100 units when the 6th worker is hired. Therefore, the additional output produced by the 6th worker is 10 units. Since the price at which the firm can sell the output is $5, the value of marginal product of the 6th worker is 10*5=$50. 
Therefore, the correct answer is C. 
Option A is incorrect because it is the value of total product and not the value of marginal product. 
Option B is incorrect because the value of marginal product cannot be negative. 
Option D is incorrect because it is not the value of marginal product. 
Option E is incorrect because it is not the value of marginal product.

Question 13

The value of marginal product of labour is the revenue

Accepted Answer

The value of marginal product of labour is the additional revenue generated by the employment of an additional unit of labour. It measures the increase in output from hiring one more unit of labor.

Question 14

Use the table below to answer the following questions.
Table 18.2.1
 
-Refer to Table 18.2.1.If the firm can sell all the output it wants for the price of $4 a unit, what is the profit-maximizing number of workers if the wage rate is $12?

Accepted Answer

The answer of Use the table below to answer the...

Question 15

Choose the statement that is incorrect.

Accepted Answer

Not all capital services are traded in a market. Some capital services, such as the use of an owner-operated machine, are not traded in a market but rather owned and operated by the firm itself.

Question 16

The four factors of production are

Accepted Answer

The four factors of production are labour (human effort, both physical and mental), capital (tools, machines, and other equipment used in production), entrepreneurship (the organizational skill and risk-taking ability of those who combine labour, land, and capital to produce goods and services), and land (natural resources like plants, water, and minerals that are used in production). Option A, B, D, and E are inaccurate or incomplete.

Question 17

Consider the factors of production.The price in a(n)________ market is a rental rate.

Accepted Answer

In a capital services market, the price is a rental rate as individuals or firms pay to rent capital goods such as machinery or equipment to produce goods and services. Therefore, the best choice is E, capital services.

Question 18

If the marginal product of a baker is 10 loaves of bread, and the price of a loaf of bread is $2, the baker's value of marginal product is

Accepted Answer

The value of marginal product (VMP) is calculated by multiplying the marginal product (MP) by the market price of the product. In this case, VMP = MP x Price = 10 x $2 = $20. Therefore, the baker's value of marginal product is $20.

Question 19

If marginal product of a restaurant employee is 10 customers per hour, and the price of a meal is $15, the restaurant employee's value of marginal product is

Accepted Answer

The value of marginal product is calculated by multiplying the marginal product of the employee (10 customers per hour) by the price of a meal ($15). Therefore, 10 customers * $15/meal = $150.

Question 20

To maximize profit, a firm hires labour until

Accepted Answer

The value of marginal product (VMP) is the additional revenue generated by hiring one additional unit of labour. A profit-maximizing firm will continue hiring labour until the VMP of the last unit hired equals the wage rate paid to that labour. This is because hiring additional units beyond this point would result in a cost that is greater than the additional revenue generated, leading to a decrease in profit. Therefore, choice E is the best answer.

Quiz 18: Markets for Factors of Production

Choose the statement that is incorrect.

Firms hire labour

Suppose a gift shop in Corner Brook, Newfoundland, hires workers to personalize ornaments for Christmas.The store sells the personalized ornaments for $6 each.The value of marginal product of this store's fourth worker is $60.The marginal product of the fourth worker is

Natural resources that are depleted as they are used

Choose the statement that is incorrect.

Coal is an example of

Water from the Mackenzie River is an example of

The Brown's Egg store in Lethbridge Alberta hires workers to paint eggs.The price of an egg is $2.50.The value of marginal product of this store's fifth worker is $25.The marginal product of the fifth worker is

An example of a nonrenewable natural resource is

To maximize profit, the firm must equate the

Use the table below to answer the following questions. Table 18.2.1 -Refer to Table 18.2.1.If the firm can sell all the output it wants for the price of $5 a unit, what is the value of marginal product of the 6th worker?

The value of marginal product of labour is the revenue

Use the table below to answer the following questions. Table 18.2.1 -Refer to Table 18.2.1.If the firm can sell all the output it wants for the price of $4 a unit, what is the profit-maximizing number of workers if the wage rate is $12?

Choose the statement that is incorrect.

The four factors of production are

Consider the factors of production.The price in a(n) ________ market is a rental rate.

If the marginal product of a baker is 10 loaves of bread, and the price of a loaf of bread is $2, the baker's value of marginal product is

If marginal product of a restaurant employee is 10 customers per hour, and the price of a meal is $15, the restaurant employee's value of marginal product is

To maximize profit, a firm hires labour until