Question 1

Use the figure below to answer the following questions.
  
Figure 18.3.1
-Refer to Figure 18.3.1. This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve. If this labour market is controlled by a monopsony, the wage rate is

Accepted Answer

A)  $7 an hour.
B)  $6 an hour.
C)  $3 an hour.
D)  $5 an hour.
E)  zero, because the market would shut down.F) C) and D)
G) A) and E)

Question 2

Use the figure below to answer the following questions.
  
Figure 18.3.3
-Refer to Figure 18.3.3. Suppose the government passes a minimum wage law that prohibits anyone from hiring labour at less than $8 per hour. The monopsonist will hire

Accepted Answer

A)  250 hours of labour.
B)  300 hours of labour.
C)  350 hours of labour.
D)  400 hours of labour.
E)  450 hours of labour.F) B) and C)
G) C) and D)

Question 3

An example of a nonrenewable natural resource is

Accepted Answer

A)  oil.
B)  Lake Erie.
C)  rain.
D)  sunshine.
E)  the St. Lawrence River.F) C) and D)
G) C) and E)

Question 4

The present value of a future sum of money is the amount that, if invested today, will grow

Accepted Answer

A)  as large as that future sum, given the interest rate.
B)  as large as that future sum.
C)  as large as that future sum, less taxes payable.
D)  as large as that future sum, if the rate of interest is zero.
E)  at a constant rate forever.F) A) and B)
G) D) and E)

Question 5

If the wage rate increases, the substitution effect gives a household the incentive to

Accepted Answer

A)  raise its reservation wage.
B)  increase leisure and decrease work.
C)  increase work and decrease leisure.
D)  increase both work and leisure.
E)  decrease both work and leisure.F) A) and B)
G) A) and C)

Question 6

The Hotelling Principle states that

Accepted Answer

A)  hotels will tend to be built next to major highways.
B)  equilibrium in natural resource markets occurs when the expected increase in the price of the resource over time is equal to the interest rate.
C)  the resource will be depleted at a rate equal to the rate of interest.
D)  natural resources should be depleted only for the production of goods that would help maintain environmental quality.
E)  we should conserve nonrenewable natural resources.F) B) and C)
G) A) and E)

Question 7

Table 18.3.1
-Refer to Table 18.3.1. Table 18.3.1 gives information about the labour market in Lantis, a community in which the labour market is perfectly competitive. If the price of the good that Lantis produces increases and the value of marginal product of labour changes by $10 an hour, the equilibrium wage rate ________ an hour and the quantity of labour employed ________.

Accepted Answer

A)  rises to $17.50; increases to 450 hours
B)  rises to $10; increases to 600
C)  rises to $20; increases to 500 hours
D)  remains at $15; decreases to 300 hours
E)  rises to $20; decreases to 300 hoursF) None of the above
G) A) and D)

Question 8

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

A)  $20
B)  $0
C)  $25
D)  $40
E)  $185F) C) and D)
G) A) and C)

Exam 18: Markets for Factors of Production

The present value of a future sum of money is the amount that, if invested today, will grow

Correct Answer
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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?

Correct Answer
verified

Correct Answer
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An example of a nonrenewable natural resource is

Correct Answer
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Use the figure below to answer the following questions. Figure 18.3.1 -Refer to Figure 18.3.1. This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve. If this labour market is controlled by a monopsony, the wage rate is

Correct Answer
verified

Use the figure below to answer the following questions. Figure 18.3.3 -Refer to Figure 18.3.3. Suppose the government passes a minimum wage law that prohibits anyone from hiring labour at less than $8 per hour. The monopsonist will hire

Correct Answer
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If the wage rate increases, the substitution effect gives a household the incentive to

Correct Answer
verified

The Hotelling Principle states that

Correct Answer
verified

Exam 18: Markets for Factors of Production

The present value of a future sum of money is the amount that, if invested today, will grow

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An example of a nonrenewable natural resource is

Correct AnswerverifiedShow Answer

Use the figure below to answer the following questions. Figure 18.3.1 -Refer to Figure 18.3.1. This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve. If this labour market is controlled by a monopsony, the wage rate is

Correct AnswerverifiedShow Answer

Use the figure below to answer the following questions. Figure 18.3.3 -Refer to Figure 18.3.3. Suppose the government passes a minimum wage law that prohibits anyone from hiring labour at less than $8 per hour. The monopsonist will hire

Correct AnswerverifiedShow Answer

If the wage rate increases, the substitution effect gives a household the incentive to

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The Hotelling Principle states that

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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