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Exam 18: The Market For the Factors of Production.

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Question 201

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Figure 18-4 -Refer to Figure 18-4.The graph above illustrates the market for bakers who make homemade breads and breakfast pastries.If bakeries adopt new labor-saving technologies,what happens in the market for bakers?

A) Demand increases from D1 to D2.
B) Demand decreases from D2 to D1.
C) Supply increases from S1 to S2.
D) Supply decreases from S2 to S1.

E) A) and B)
F) A) and C)

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Question 202

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The Black Death in fourteenth-century Europe resulted in

A) a lower marginal product of labor of surviving workers.
B) a higher marginal product of land.
C) economic hardship for surviving peasants.
D) economic hardship for surviving landowners.

E) B) and C)
F) None of the above

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Question 203

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Along the vertical axis of the production function we typically measure

Scenario 18-8 Suppose the following events occur in the market for university economics professors. Event 1: A recession in the U.S. economy lowers the opportunity cost of going to graduate school in economics to become a university economics professor. Event 2: A decreasing number of students in U.S. primary and secondary schools decreases the number of students entering college, decreasing the output price of university economics professors' services. -Refer to Scenario 18-8.As a result of these two events,holding all else constant,the equilibrium quantity of university economics professors will

The marginal product of land depends on the quantity of land that is available.

Consider the labor market for computer programmers.During the late 1990s,the value of the marginal product of all computer programmers increased dramatically.Holding all else equal,the equilibrium quantity in the labor market for computer programmers

Suppose that eight workers can manufacture 70 radios per day and that nine workers can manufacture 90 radios per day.If radios can be sold for $10 each,the value of marginal product of the ninth worker is

Figure 18-1. On the graph, L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1.Suppose the firm sells its output for $25 per unit,and it pays each of its workers $1,000 per week.Also,the firm's non-labor costs are fixed and they amount to $2,000.The firm maximizes profit by hiring

Omega Custom Cabinets produces and sells custom bathroom vanities.The firm has determined that if it hires 10 workers,it can produce 20 vanities per week.If it hires 11 workers,it can produce 22 vanities per week.It sells each vanity for $800,and it pays each of its workers $1,000 per week.Which of the following is correct?

Suppose that due to flooding in Louisiana,100,000 farmers relocate from Louisiana to Texas.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and the rents earned by landowners in Texas?

The accumulation of machinery and buildings used in the production of new goods and services is referred to as

Which of the following could increase the supply of labor in the market for cranberry pickers? (i) a change in the preferences of women toward full-time work (ii) an increase in the output price (iii) an increase in the wages paid to apple pickers (iv) a decrease in the wages paid to apple pickers

Value of marginal product is defined as the additional

Scenario 18-2 Gertrude Kelp owns three boats that participate in commercial fishing for fresh Pacific salmon off the coast of Alaska. As part of her business she hires a captain and several crew members for each boat. In the market for fresh Pacific salmon, there are thousands of firms like Gertrude's. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market. -Refer to Scenario 18-2.In the fresh Pacific salmon product market,Gertrude has some control over the

Labor-augmenting technology causes which of the following? (i) The marginal productivity of labor increases. (ii) The marginal productivity of labor decreases. (iii) Labor demand shifts to the right. (iv) Labor demand shifts to the left.

Labor markets are different from most other markets because labor demand is

Figure 18-1. On the graph, L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1.The shape of the curve suggests the presence of

Suppose that the labor market for high school chemistry teachers is initially in equilibrium.Chemistry teachers use laboratory chemicals as an important part of their jobs.New environmental regulations ban the use of many chemicals,which means that fewer laboratory chemicals are available for high school chemistry teachers to use in their jobs.What happens to the equilibrium wage and quantity of high school chemistry teachers?

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2.The marginal product of the fourth worker is

Scenario 18-7 Suppose the following events occur in the market for university economics professors. Event 1: A recession in the U.S. economy lowers the opportunity cost of going to graduate school in economics to become a university economics professor. Event 2: An increasing number of students in U.S. primary and secondary schools increases the number of students entering college, increasing the output price of university economics professors' services. -Refer to Scenario 18-7.As a result of these two events,holding all else constant,the equilibrium wages of university economics professors will