Question 1

An unexpected increase in the demand for accountants will lead to
A)an increase in their earnings and an expansion in the future supply of accountants.
B)a decrease in the incentive of students to prepare for a career in accounting.
C)a reduction in the current earnings of accountants,followed by a reduction in the future supply of accountants.
D)a reduction in the employment of accountants but not their wage rates.

Accepted Answer

An unexpected increase in the demand for accountants will lead to an increase in their earnings as they become more valuable in the labor market. This increase in earnings will provide an incentive for more individuals to pursue a career in accounting, leading to an expansion in the future supply of accountants. This is because higher earnings will attract more individuals to the field, and the expansion in the future supply will help to prevent any further increases in earnings from becoming too excessive. Therefore, choice A is the best answer.

Question 2

Prices in resource markets
A)provide users with information concerning the relative scarcity of resources.
B)encourage the use of a resource now if its price is expected to rise in the future.
C)provide suppliers with little incentive to develop more of those resources that are intensely demanded by users.
D)have little impact on productive decisions unless they are closely regulated by the government.

Accepted Answer

Prices in resource markets reflect the relative scarcity of resources. When a resource is scarce, its price will increase as demand for the resource rises. Conversely, if a resource is abundant, its price will likely decrease. Therefore, prices in resource markets provide information to users about which resources are more abundant and which are scarce. This information can guide productive decisions as users will choose to use resources that are more abundant and less expensive.

Question 3

Consider the labor market for nurses,which initially is in equilibrium.Suppose the output price for nursing services increases.Holding all else equal,what effect will this have on the labor market for nurses?
A)The equilibrium wage will increase,and the equilibrium quantity of nurses will increase.
B)The equilibrium wage will increase,and the equilibrium quantity of nurses will decrease.
C)The equilibrium wage will decrease,and the equilibrium quantity of nurses will increase.
D)The equilibrium wage will decrease,and the equilibrium quantity of nurses will decrease.

Accepted Answer

An increase in output price for nursing services will increase the demand for nursing services. This will lead to an increase in demand for nurses, as healthcare facilities will need more nurses to meet the increased demand for nursing services. This increase in demand for nurses will lead to an increase in the equilibrium wage for nurses since there are fewer nurses available to meet the increased demand. As the wage rate increases, more people will be willing to work as nurses, leading to an increase in the equilibrium quantity of nurses. Therefore, an increase in output price for nursing services will increase both the equilibrium wage and the equilibrium quantity of nurses in the labor market.

Question 4

Other things constant,if the demand for computer scientists rises,
A)the wages of computer scientists will tend to fall.
B)employment of computer scientists will tend to rise.
C)there will be a surplus of computer scientists.
D)there will be a shortage of computer scientists.

Accepted Answer

If the demand for computer scientists rises, it means that more companies or industries will require their skills and thus employ them, leading to a rise in employment opportunities for computer scientists.

Question 5

An unanticipated decline in the demand for legal services will
A)increase both the wages of lawyers and the rate of return they can expect to derive from their legal education.
B)lead to a shortage in the market for legal services.
C)reduce the wages of lawyers but not the quantity of legal services supplied.
D)reduce the wages of lawyers and the rate of return on a legal education..

Accepted Answer

A decrease in demand for legal services would lead to a decrease in the wages of lawyers as there would be more lawyers than available work. This would, in turn, reduce the rate of return on a legal education as there would be less opportunity for lawyers to earn a high income after investing in their education. Therefore, option D is the correct answer. Options A and B are incorrect because a decrease in demand would lead to lower wages and no shortage. Option C is incorrect because if demand falls, there would be a reduction in both wages and quantity of legal services supplied.

Question 6

If a construction boom leads to an increase in the price of lumber,how will the higher lumber prices influence the wood furniture market?
A)The demand for wood furniture will decline,and furniture prices will fall.
B)There will be a shortage of wood furniture.
C)There will be a surplus of wood furniture.
D)The supply of wood furniture will decline,and furniture prices will increase.

Accepted Answer

The increase in lumber prices will increase the cost of producing wood furniture, which will lead to a decrease in the supply of wood furniture. This decrease in supply will result in an increase in furniture prices. Therefore, the correct choice is D.

Question 7

An unexpected decrease in the demand for accountants will lead to
A)an increase in the earnings of accountants.
B)an increase in the incentive of students to prepare for a career in accounting.
C)a reduction in the future supply of accountants.
D)an increase in the employment opportunities of accountants.

Accepted Answer

A decrease in demand for accountants means there will be fewer job opportunities, which may lead to a reduction in the number of students pursuing a career in accounting. Therefore, there will be a reduction in the future supply of accountants.

Question 8

If there is a shortage of nurses,it is expected that
A)wages for nurses will go up as hospitals try to fill these positions.
B)wages for nurses will go down because of the increased competition between hospitals.
C)the return on the human capital investment of current nursing majors will decline.
D)wages for nurses currently practicing will increase,but new nurses will experience lower wages in the future.

Accepted Answer

When there is a shortage of a particular profession, the demand for workers in that field increases while the supply remains low, leading to an increase in wages as hospitals compete to fill open positions. Therefore, choice A is the best option. Choice B is not logical because if there is a shortage of nurses, there would not be increased competition between hospitals. Choice C could be true, but it is not directly related to the shortage of nurses. Choice D is also incorrect as it does not take into account the increased demand for nurses in the future.

Question 9

The supply of both physical and human resources in the long run is determined primarily by
A)the presence or absence of economies of scale.
B)investment choices and resource depreciation.
C)sunk costs;what happens in the present cannot change the future.
D)the law of diminishing marginal returns.

Accepted Answer

Investment choices and resource depreciation play a crucial role in determining the supply of physical and human resources in the long run. Investment decisions affect the level of capital stock, technology, and human capital, while depreciation limits the effective lifespan of physical resources and affects the skills and productivity of human resources. Thus, investment and depreciation determine the scale and quality of the resources available for production in the long run.

Question 10

Which of the following is most likely to result from an increase in the demand for computer technicians?
A)an increase in the wages of computer technicians,which will attract additional technicians in the long run
B)an increase in the employment of computer technicians,which will depress current wage rates but eventually lead to higher wage rates for technicians
C)a decline in the number of persons preparing themselves for careers as computer technicians
D)lower wage rates and a shortage of computer technicians

Accepted Answer

When the demand for a particular occupation increases, the market equilibrium wage rate for that occupation tends to rise. This means that wages for computer technicians are likely to increase, which will attract additional technicians to enter the field in the long run. Option B is unlikely because an increase in the employment of computer technicians would lead to a shortage of technicians and therefore increased demand for workers, resulting in higher wage rates. Option C is unlikely as an increase in demand typically leads to more people preparing for the job. Option D is unlikely as an increase in demand should result in higher rather than lower wages.

Question 11

Suppose a new oxygen-enrichment process will cut in half the energy required to smelt copper.The firm selling licenses for this patented process will experience a greater demand for its product when
A)the price of copper falls and smelters become more desperate to economize.
B)energy prices are expected to fall.
C)energy prices are expected to rise.
D)the price of steel,a substitute for copper,declines.

Accepted Answer

The answer of Suppose a new oxygen-enrichment process will cut...

Question 12

An increase in the demand for a resource
A)will cause the price of that resource to fall.
B)may be the result of a decrease in the demand for products utilizing this resource.
C)will cause the price of the resource to fall by a smaller amount in the short run than in the long run.
D)will increase the price of the resource and,thereby,increase the incentive of potential suppliers to provide the resource in the future.

Accepted Answer

An increase in demand for a resource will increase the price of the resource, which in turn will increase the incentive of potential suppliers to provide the resource in the future. This is because higher prices make it more profitable for suppliers to produce and supply the resource. Therefore, the correct answer is D. Option A is incorrect as an increase in demand will typically cause the price of the resource to rise. Option B is incorrect as a decrease in demand for products utilizing this resource would result in a decrease in demand for the resource itself, not an increase. Option C is incorrect as the short-term and long-term effects on the price of the resource will depend on the elasticity of both demand and supply.

Question 13

A decrease in resource prices will increase the incentive of
A)users to purchase the resource.
B)suppliers to provide more of the resource.
C)firms to find and develop substitutes for the resource.
D)consumers to look for alternatives that do not contain the resource.

Accepted Answer

The answer of A decrease in resource prices will increase...

Question 14

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)The equilibrium wage would increase,as would the quantity of labor.With more workers,the added output from an extra worker is larger.
B)The equilibrium wage would decrease,as would the quantity of labor.With fewer workers,the added output from an extra worker is smaller.
C)The equilibrium wage would decrease,and the quantity of labor would increase.With more workers,the added output from an extra worker is smaller.
D)The equilibrium wage would decrease,and the quantity of labor would increase.With more workers,the added output from an extra worker is larger.

Accepted Answer

The answer of Suppose that workers immigrate to Minnesota from...

Question 15

Other things equal,when the supply of workers is scarce,one would predict that market wages would be
A)relatively high.
B)relatively low.
C)determined solely by factors that affect demand.
D)determined outside the domain of economic theory.

Accepted Answer

When the supply of workers is scarce, demand for their services may still be high, resulting in competition between firms to hire workers. As competition drives up wages, market wages would be relatively high.

Question 16

If the price of crude oil fell significantly,which of the following would be most likely to happen?
A)The price of air travel would increase.
B)The demand for large cars would increase.
C)The price of gasoline would increase.
D)The wages of workers in the automobile industry would fall.

Accepted Answer

The answer of If the price of crude oil fell...

Question 17

When the supply of workers is plentiful,one would predict that market wages would be
A)determined solely by factors that affect supply.
B)determined solely by factors that affect demand.
C)low,other things equal.
D)high,other things equal.

Accepted Answer

When the supply of workers is plentiful, there are more workers than available jobs, so employers can offer lower wages and still find workers willing to take the jobs. Therefore, market wages would be low, other things equal.

Question 18

If the demand for computer scientists increases relative to their supply,
A)the wages of computer scientists will decline.
B)a computer science major will be more attractive to college students.
C)the employment of computer scientists will fall.
D)there will be a surplus of computer scientists.

Accepted Answer

An increase in demand relative to supply will result in higher salaries and job security for computer scientists, making a computer science major more attractive to college students seeking employment in a high-growth industry. This can ultimately help to address the supply/demand imbalance. The other options are unlikely outcomes in a scenario where there is an increase in demand relative to supply.

Question 19

The supply curve of truck drivers is upward sloping and demand curve is downward sloping.A reduction in the price of hauling freight by truck relative to the price of hauling freight by rail will ____ the equilibrium wage of truck drivers and ____ the number of drivers employed.
A)decrease;decrease
B)decrease;increase
C)increase;decrease
D)increase;increase

Accepted Answer

The answer of The supply curve of truck drivers is...

Question 20

When a resource price is below equilibrium,
A)excess supply will be present.
B)excess demand will be present.
C)the supply of the resource will be inelastic.
D)the demand for the resource will be inelastic.

Accepted Answer

The answer of When a resource price is below equilibrium,
A)excess...

Quiz 25: The Supply of and Demand for Productive Resources

An unexpected increase in the demand for accountants will lead to

Prices in resource markets

Consider the labor market for nurses,which initially is in equilibrium.Suppose the output price for nursing services increases.Holding all else equal,what effect will this have on the labor market for nurses?

Other things constant,if the demand for computer scientists rises,

An unanticipated decline in the demand for legal services will

If a construction boom leads to an increase in the price of lumber,how will the higher lumber prices influence the wood furniture market?

An unexpected decrease in the demand for accountants will lead to

If there is a shortage of nurses,it is expected that

The supply of both physical and human resources in the long run is determined primarily by

Which of the following is most likely to result from an increase in the demand for computer technicians?

Suppose a new oxygen-enrichment process will cut in half the energy required to smelt copper.The firm selling licenses for this patented process will experience a greater demand for its product when

An increase in the demand for a resource

A decrease in resource prices will increase the incentive of

Suppose that workers immigrate to Minnesota from Canada.Which of the following correctly describes what would happen in the market for labor in Minnesota?

Other things equal,when the supply of workers is scarce,one would predict that market wages would be

If the price of crude oil fell significantly,which of the following would be most likely to happen?

When the supply of workers is plentiful,one would predict that market wages would be

If the demand for computer scientists increases relative to their supply,

The supply curve of truck drivers is upward sloping and demand curve is downward sloping.A reduction in the price of hauling freight by truck relative to the price of hauling freight by rail will the equilibrium wage of truck drivers and the number of drivers employed.

When a resource price is below equilibrium,