Question 1

The fundamental decision faced by workers is called

Accepted Answer

The fundamental decision faced by workers is the trade-off between leisure time and income earned from working. Therefore, the correct choice is option D, the labor-leisure trade-off. Choices A, B, C, and E are related to labor economics but do not capture the essence of the workers' decision-making process.

Question 2

Refer to the following graphs to answer the following questions:
A.
  B.
  C.
  D.
  E.
 
-Choose the graph that represents the following situation: The government raises the minimum wage.

Accepted Answer

Graph C likely shows a shift in the labor demand or supply curve that reflects the impact of a minimum wage increase. This could either be a shift in the supply curve to the left, indicating a reduction in the quantity of labor demanded at the new, higher wage, or a shift in the demand curve, depending on the specific effects being illustrated.

Question 3

Yolanda owns a temp agency.She sees demand for her workers increase because firms prefer a more contingent workforce.The value of the marginal product of labor of her temps

Accepted Answer

The value of the marginal product of labor increases when the price of the services provided by labor increases. If there's higher demand for temp workers, firms are willing to pay more for their services, thus increasing the value of their marginal product.

Question 4

If workers become more productive in a given occupation,they will likely see their employment ________.

Accepted Answer

If workers become more productive, they can produce more output in the same amount of time, leading to an increase in supply. This can result in higher demand for the occupation, leading to an increase in employment.

Question 5

The income effect describes the

Accepted Answer

The income effect describes the change in the quantity demanded of a good or service when a change in income occurs. In the case of labor supply, the income effect suggests that as wages rise, individuals may choose to work less because they can maintain the same level of income with fewer working hours. Therefore, the best choice is E - incentive to work less when the wage rises.

Question 6

Talia just applied for a position with Rory's firm.Rory knows that Talia will earn $20 an hour and can produce a value of the marginal product of labor (VMPL)of $40.Rory will ________ Talia because her VMPL is ________.

Accepted Answer

Rory will hire Talia because her VMPL is positive and greater than her wage rate. This means that Talia's productivity is higher than her wage, which adds value to the firm's production process.

Question 7

The use of farm machinery to plant and harvest crops has increased because it is more productive than the typical farmhand.Demand for farmhands has

Accepted Answer

With the increased use of farm machinery, the demand for farmhands has decreased as their productivity has been replaced by the more efficient machinery. This has led to a shift towards fewer farmhands being employed on farms.

Question 8

If the price of pencils falls,the marginal product of labor will ________ and the value of the marginal product of labor will ________.

Accepted Answer

The marginal product of labor is determined by the productivity of labor and is not directly affected by the price of pencils, so it remains unchanged. However, the value of the marginal product of labor, which is the marginal product of labor multiplied by the price of the output (in this case, pencils), will decrease if the price of pencils falls.

Question 9

Refer to the following graphs to answer the following questions:
A.
  B.
  C.
  D.
  E.
 
-Choose the graph that represents the following situation: Consumer demand for Princeton Pickles increases as customers find out that pickles are highly nutritious.

Accepted Answer

Consumer demand increases as the price of the product increases.

Question 10

Refer to the following graphs to answer the following questions:
A.
  B.
  C.
  D.
  E.
 
-Choose the graph that represents the following situation: A documentary on bottled water demonstrates the high impact this product has on the environment.In response,consumers drastically reduce their consumption of this product.

Accepted Answer

Graph B shows a decrease in the consumption of bottled water after a certain point, which could be due to the impact of the documentary on consumers.

Question 11

Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10.
 
-If the price increases from $10 to $20 per bag,what happens to the labor demand curve?

Accepted Answer

When the price of the product increases, the firm's revenue from selling the product increases, making it more profitable to produce more. This typically leads to an increase in the demand for labor to produce more products, shifting the labor demand curve to the right.

Question 12

Bobby knows that she is producing a value just equal to her wage.If the price of what she makes falls,Bobby knows that she

Accepted Answer

If the price of what Bobby makes falls and she is currently producing a value just equal to her wage, her employer may find her employment economically unviable, increasing the likelihood of her being laid off or fired.

Question 13

As computer usage in companies and in the home has increased,the labor demand for information technology (IT)workers has

Accepted Answer

With the increase in computer usage in both companies and homes, the demand for IT workers has also increased. As technology continues to advance and become more integrated into everyday life, it is expected that the demand for IT workers will continue to grow.

Question 14

Refer to the following graphs to answer the following questions:
A.
  B.
  C.
  D.
  E.
 
-Choose the graph that represents the following situation: Out of fear of losing their jobs in a depressed economic climate,workers increase their rate of production.

Accepted Answer

The graph shows that the production rate increases as the fear of losing jobs increases.

Question 15

The substitution effect describes the

Accepted Answer

The substitution effect refers to the economic theory that as the price of a good or service rises, people will substitute it for a similar, less expensive product. In the case of labor, if the wage rate rises, workers will be incentivized to work more because they can earn more for their time. This is the substitution effect at work in the labor market.

Question 16

Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10.
 
-Assume that the price of duffel bags is $10.If the marginal product of labor of the sixtieth worker drops by half,what is the value of the marginal product of labor of the sixtieth worker now?

Accepted Answer

The value of the marginal product of labor (VMPL) is calculated as the marginal product of labor (MPL) times the price of the output. If the MPL of the sixtieth worker drops by half, and assuming it was initially higher, the exact new MPL isn't provided, but the price of the output remains $10. Without knowing the initial MPL, we cannot calculate the exact drop, but the question seems to imply a direct relationship with the price, which remains constant at $10. Thus, the VMPL would be $10, assuming the MPL drop is reflected in the output price directly, which remains unchanged.

Question 17

If more of the production process for automobiles were switched over to machines,the demand for auto factory assembly line workers would ________ machine maintenance.

Accepted Answer

Switching more of the production process to machines would decrease the demand for auto factory assembly line workers but increase the demand for machine maintenance to keep those machines running efficiently.

Question 18

Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10.
 
-If the wage of the fifth worker is $20 and his or her value of the marginal product of labor is $25,the firm

Accepted Answer

Since the value of the marginal product of labor (VMPL) is greater than the wage, the firm is earning a profit from hiring the fifth worker. This means that there is room for the firm to hire more workers, as long as the VMPL remains greater than the wage. Therefore, hiring additional workers would likely benefit the firm.

Question 19

The backward-bending labor supply curve occurs because workers value leisure

Accepted Answer

The backward-bending labor supply curve shows that at higher wages, workers start valuing leisure more than additional income. This is because with higher wages, they can afford to work fewer hours and still earn enough income to meet their needs and wants. As a result, the substitution effect of higher wages (which causes workers to work more) is offset by the income effect (which causes workers to work less). Therefore, the labor supply curve bends backward.

Question 20

Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10.
 
-Assume that the price per duffel bag rises from $10 to $20.What is the value of the marginal product of labor of the twentieth worker?

Accepted Answer

The answer of Use the following graph,which depicts Mighty Max's...

Quiz 14: The Demand and Supply of Resources

The fundamental decision faced by workers is called

Refer to the following graphs to answer the following questions: A. B. C. D. E. -Choose the graph that represents the following situation: The government raises the minimum wage.

Yolanda owns a temp agency.She sees demand for her workers increase because firms prefer a more contingent workforce.The value of the marginal product of labor of her temps

If workers become more productive in a given occupation,they will likely see their employment ________.

The income effect describes the

Talia just applied for a position with Rory's firm.Rory knows that Talia will earn $20 an hour and can produce a value of the marginal product of labor (VMPL) of $40.Rory will Talia because her VMPL is .

The use of farm machinery to plant and harvest crops has increased because it is more productive than the typical farmhand.Demand for farmhands has

If the price of pencils falls,the marginal product of labor will and the value of the marginal product of labor will .

Refer to the following graphs to answer the following questions: A. B. C. D. E. -Choose the graph that represents the following situation: Consumer demand for Princeton Pickles increases as customers find out that pickles are highly nutritious.

Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10. -If the price increases from $10 to $20 per bag,what happens to the labor demand curve?

Bobby knows that she is producing a value just equal to her wage.If the price of what she makes falls,Bobby knows that she

As computer usage in companies and in the home has increased,the labor demand for information technology (IT) workers has

Refer to the following graphs to answer the following questions: A. B. C. D. E. -Choose the graph that represents the following situation: Out of fear of losing their jobs in a depressed economic climate,workers increase their rate of production.

The substitution effect describes the

If more of the production process for automobiles were switched over to machines,the demand for auto factory assembly line workers would ________ machine maintenance.

The backward-bending labor supply curve occurs because workers value leisure

Quiz 14: The Demand and Supply of Resources

The fundamental decision faced by workers is called

Refer to the following graphs to answer the following questions: A. B. C. D. E. -Choose the graph that represents the following situation: The government raises the minimum wage.

Yolanda owns a temp agency.She sees demand for her workers increase because firms prefer a more contingent workforce.The value of the marginal product of labor of her temps

If workers become more productive in a given occupation,they will likely see their employment ________.

The income effect describes the

Talia just applied for a position with Rory's firm.Rory knows that Talia will earn $20 an hour and can produce a value of the marginal product of labor (VMPL) of $40.Rory will ________ Talia because her VMPL is ________.

The use of farm machinery to plant and harvest crops has increased because it is more productive than the typical farmhand.Demand for farmhands has

If the price of pencils falls,the marginal product of labor will ________ and the value of the marginal product of labor will ________.

Refer to the following graphs to answer the following questions: A. B. C. D. E. -Choose the graph that represents the following situation: Consumer demand for Princeton Pickles increases as customers find out that pickles are highly nutritious.

Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10. -If the price increases from $10 to $20 per bag,what happens to the labor demand curve?

Bobby knows that she is producing a value just equal to her wage.If the price of what she makes falls,Bobby knows that she

As computer usage in companies and in the home has increased,the labor demand for information technology (IT) workers has

Refer to the following graphs to answer the following questions: A. B. C. D. E. -Choose the graph that represents the following situation: Out of fear of losing their jobs in a depressed economic climate,workers increase their rate of production.

The substitution effect describes the

If more of the production process for automobiles were switched over to machines,the demand for auto factory assembly line workers would ________ machine maintenance.

The backward-bending labor supply curve occurs because workers value leisure

Talia just applied for a position with Rory's firm.Rory knows that Talia will earn $20 an hour and can produce a value of the marginal product of labor (VMPL) of $40.Rory will Talia because her VMPL is .

If the price of pencils falls,the marginal product of labor will and the value of the marginal product of labor will .