Question 1

Water from the Mackenzie River is an example of

Accepted Answer

Water from the Mackenzie River can be used repeatedly, making it a renewable natural resource.

Question 2

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 3

Choose the statement that is incorrect.

Accepted Answer

The statement that most capital services are traded in a market is incorrect as some capital services, such as owner-occupied housing and equipment leased internally within a firm, are not traded in a market.

Question 4

Choose the statement that is incorrect.

Accepted Answer

Not all labour markets are competitive. Some may be dominated by a small number of firms, or may have barriers to entry that limit competition.

Question 5

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 simply the marginal product (MP) multiplied by the market price of the product (P). In this case, VMP = MP x P = 10 x $2 = $20. Therefore, the correct answer is option B.

Question 6

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 profit-maximizing number of workers is found where marginal revenue equals marginal cost. In this case, marginal revenue is $4 and marginal cost is $12. Therefore, the profit-maximizing number of workers is 8.

Question 7

The value of marginal product of labour is the revenue

Accepted Answer

The value of marginal product of labour is the extra revenue generated by the employment of an additional unit of labour. It is the increase in total revenue due to hiring one more unit of labour. Therefore, the correct option is (C): generated by the employment of an additional unit of labour. Options (A) and (D) can be eliminated as they refer to the revenue generated by an additional unit of output, not labour. Option (B) is incorrect as it refers to the cost of labour, not the value of its production. Option (E) is also incorrect as it refers to the cost, not the value of the production of labour.

Question 8

Natural resources that are depleted as they are used

Accepted Answer

Nonrenewable natural resources are those that are depleted as they are used, such as fossil fuels and minerals. These resources cannot be replenished in a short period of time, and therefore they should be used carefully and conserved for future generations. Renewable natural resources, on the other hand, can be replenished over time, such as solar power and water.

Question 9

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 price of capital equipment is the purchase price of the computer, which is $900. The rental rate of capital is the annual cost of leasing the computer, which is $450.

Question 10

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 11

An example of a nonrenewable natural resource is

Accepted Answer

Oil is a fossil fuel formed over millions of years from the remains of ancient plants and animals, making it a nonrenewable resource as it cannot be replenished within a human lifespan. Lake Erie, rain, sunshine, and the St. Lawrence River are examples of renewable resources as they are replenished naturally and can be sustained over time.

Question 12

To maximize profit, a firm hires labour until

Accepted Answer

Hiring labour up to the point where the value of the marginal product equals the wage rate ensures that the firm is maximizing its profits. This means that the firm is paying each worker exactly what they contribute to the production process, resulting in the most efficient use of resources and highest possible profits. If the firm were to hire any more workers, the cost of paying their wages would exceed the value of their contribution to production, resulting in lower profits.

Question 13

Firms hire labour

Accepted Answer

Firms hire labour to maximize profit, as labour is an input that can increase output and ultimately lead to higher revenues and profits. Hiring labour allows firms to increase productivity and expand their production capacity, which can lead to increased profits.

Question 14

Coal is an example of

Accepted Answer

Coal is a nonrenewable natural resource because it takes millions of years to form and cannot be replaced within a human lifespan.

Question 15

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 16

Choose the statement that is incorrect.

Accepted Answer

Entrepreneurship does not consist of all the gifts of nature, and entrepreneurial services are not traded in markets.

Question 17

To maximize profit, the firm must equate the

Accepted Answer

To maximize profit, the firm must produce where the value of the marginal product of labor (VMPL) is equal to the wage rate (which is the factor price). At this point, the marginal cost of hiring one more worker (the wage rate) is exactly offset by the additional revenue generated from the output produced by that worker (the VMPL). This is the point where the firm is getting the most out of its resources and therefore maximizing its profit.

Question 18

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 19

The four factors of production are

Accepted Answer

The four factors of production are labour, capital, entrepreneurship, and land. These are the key resources that are needed in order to produce goods and services. Labour refers to the human effort involved in production, capital refers to the physical tools and equipment used in production, entrepreneurship refers to the ability to innovate and take risks in order to create new businesses and industries, and land refers to the natural resources that are used in production.

Question 20

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 the marginal product of the fourth worker is $60, which means that the fourth worker is able to produce $60 worth of ornaments. If the store sells each ornament for $6, then the fourth worker must be able to produce 10 ornaments. Therefore, the marginal product of the fourth worker is 10 ornaments, which is option B.

Quiz 18: Markets for Factors of Production

Water from the Mackenzie River is an example of

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

Choose the statement that is incorrect.

Choose the statement that is incorrect.

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

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?

The value of marginal product of labour is the revenue

Natural resources that are depleted as they are used

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

An example of a nonrenewable natural resource is

To maximize profit, a firm hires labour until

Firms hire labour

Coal is an example of

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?

Choose the statement that is incorrect.

To maximize profit, the firm must equate the

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

The four factors of production are

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