1) The idea that the demand for steel workers stems from the demand for steel is
ID: 1114383 • Letter: 1
Question
1) The idea that the demand for steel workers stems from the demand for steel is
A) the value of the marginal product of auto workers.
B) derived demand.
C) indirect demand.
D) output demand.
2) An increase in the wage rate will change
A) only the amount of labor hired.
B) the amount of labor employed, and it may also change the amount of other inputs employed.
C) the price the firm charges for the product, but it will not affect the demand for any of the inputs.
D) the firm's profit-maximizing level output, but not its usage of inputs.
3) When a small amount of output is produced per unit of the input, the input is said to exhibit
A) high productivity.
B) low productivity.
C) marginal productivity.
D) derived productivity.
4) The demand for inputs is a derived demand because it depends on the
A) supply of outputs.
B) demand for outputs.
C) supply of inputs.
D) cost of production.
5) Factors of production that can be used in place of other factors are said to be
A) substitutable inputs.
B) complementary inputs.
C) duplicate inputs.
D) proportionate inputs.
6) The ________ is the additional revenue a firm earns by employing one additional unit of labor.
A) marginal revenue product of labor
B) marginal labor cost
C) average labor revenue
D) per-worker net profit
7) Bonita's Braidworks hires workers to braid hair. The store sells the service for $25 per customer. The marginal revenue product of this store's fifth worker is $50. The marginal product of the fifth worker is
A) 0.5 braided customers.
B) 2 braided customers.
C) 25 braided customers.
D) indeterminate from this information.
8) A firm will reduce its quantity of labor as long as the MRP of labor ________ the market wage rate.
A) is greater than or equal to
B) is less than
C) is equal to
D) determines
9) The ________ of labor in a perfectly competitive labor market is the market wage rate.
A) total cost
B) marginal revenue from a unit
C) marginal cost of a unit
D) supply
10) Firms will employ an input up to the point where
A) the wage rate equals the productivity of capital.
B) its marginal cost equals its marginal product.
C) the input's price equals its marginal revenue product.
D) the input's price equals its marginal product.
11) The demand for any factor of production in a competitive industry depends on
A) its productivity and upon how its product is valued in the marketplace.
B) its productivity and the productivity of all other inputs.
C) the productivity of all the other inputs and how these inputs are valued in the marketplace.
D) the amount of the factor that is used and the amounts of all the other factors that are used.
12) A firm competing in a perfectly competitive labor market desires to
A) maximize marginal profit.
B) maximize total profit.
C) minimize marginal profit.
D) maximize average profit.
13) In theory, if a profit maximizing firm in a perfectly competitive labor market found it advantageous to hire one less worker, the firm should pay a
A) lower wage rate but only to the most recently hired workers.
B) higher wage rate but only to the most recently hired workers.
C) lower wage rate to all previous workers hired.
D) higher wage rate to all previous workers hired.
14) If a firm could increase profits by hiring more labor and less capital, then
A) the last dollar spent on labor must yield a smaller increase in output than the last dollar spent on capital.
B) the last dollar spent on labor must yield a larger increase in output than the last dollar spent on capital.
C) the price of capital exceeds the price of labor.
D) the optimal production technique must be labor intensive.
15) Assume that automobiles are a normal good. A decrease in income will
A) shift the marginal revenue product curve of auto workers to the left.
B) move a firm up the marginal revenue product curve of auto workers.
C) shift the marginal revenue product curve of auto workers to the right.
D) have no effect on the marginal revenue product curve of auto workers.
16) Related to the Economics in Practice on page 211: According to the Economics in Practice, firms where managers had more extensive training ________ than firms where managers had no training.
A) experienced more rapid diminishing returns
B) had a lower marginal product of labor.
C) became more productive.
D) had a lower marginal revenue product of labor.
17) To produce one unit of output, a firm must use one unit of capital with one unit of labor. In this case, capital and labor are
A) complementary inputs.
B) substitutable inputs.
C) both complementary and substitutable inputs.
D) unrelated inputs.
18) If labor productivity increases and the supply of labor decreases, the equilibrium wage rate
A) will increase.
B) will decrease.
C) will remain constant.
D) may increase, decrease, or remain constant.
19) Related to the Economics in Practice on page 215: A study discussed in the Economics in Practice found that NFL teams tend to ________ for the top pick in the annual player draft in terms of trades they make, ________ player productivity.
A) overpay; overestimating
B) underpay; overestimating
C) overpay; underestimating
D) underpay; underestimating
20) Related to the Economics in Practice on page 217: Because land is demand determined, an acre of land in downtown Harlingen, Texas ________ an acre of land in downtown Chicago, Illinois.
A) would most likely cost more than
B) would most likely cost less than
C) should cost approximately the same as
D) would cost exactly the same as
Explanation / Answer
1) Derived demand is nothing but the demand for a commodity or service in the demand for somethingelse.
There (B) derived demand is the answer
2) In order to balance the cost, there must be alterations both in the amount of labor as well as number of inputs and therefore
B) the amount of labor employed, and it may also change the amount of other inputs employed is the answer.
3) When low output is obtained when compared to thegiven input, the condition is called as low productivity
Therefore B) low productivity is the answer
4) When output demand is less, we produce less and therefore the input demand is also less which means the input demand is dependant on output demand.
Therefore B) demand for outputs is the answer
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