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Exam 18: The Markets for the Factors of Production

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Question 251

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Which of the following statements is correct? An individual worker's labor supply curve

A) can never be backward sloping.
B) slopes backward if that person responds to a higher wage by taking fewer hours of leisure per week.
C) slopes backward if that person responds to a higher opportunity cost of leisure by working fewer hours per week.
D) slopes upward if that person works the same number of hours per week, regardless of the opportunity cost of leisure.

E) A) and B)
F) All of the above

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Question 252

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A household member's decision about how much labor to supply is most closely linked to

A) the supply of factors of production other than labor.
B) technological change.
C) the tradeoff between leisure and work.
D) immigration trends.

E) A) and D)
F) C) and D)

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Question 253

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The U.S. economy experienced a significant slowdown in productivity growth that lasted from about 1973 to about __________.

Carolyn's Pottery Shop produces vases that sell for $15 each. Assume that labor is the only input that varies for the firm. If Carolyn hires 10 workers, she can produce and sell 500 vases per week. If she hires 11 workers, she can produce and sell 560 vases per week. Carolyn pays each of her workers $400 per week. Which of the following is correct?

Suppose that the market for labor is initially in equilibrium. Suppose that workers' tastes change so that they choose to retire at age 55 rather than age 67. Then the equilibrium wage

Fiona's hourly wage increases from $8 to $10. Which of the following describes a consequence of the increase in Fiona's wage?

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, the equilibrium quantity of health care employees would

Table 18-7 -Refer to Table 18-7. The fact that the marginal product falls as the number of workers increases illustrates a property called

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 wage is to the labor market as the

When economists refer to a firm's capital, they are describing the

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. In the market for high school chemistry teachers, the equilibrium wage

Table 18-12 The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. -Refer to Table 18-12. Suppose the firm sells each box of envelopes that it produces for $6. The firm would not be interested in hiring a third worker unless the wage fell from its current level of $600 to what level?

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. When Gertrude participates in the labor market to hire crew members for her boats, she is most likely considered a

Table 18-12 The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. -Refer to Table 18-12. If the value of the marginal product of the first worker hired is $938, then how many workers does the firm employ?

Which of the following events would lead to an increase in the supply of labor?

Sonny's Surfer Shop produces and sells custom surf boards. Assume that labor is the only input that varies for the firm. The firm's owner has determined that if she hires 10 workers, the firm can produce 10 surf boards per day. If she hires 11 workers, the firm can produce 12 surfboards per day. The firm sells each surfboard for $2,000, and it pays each of its workers $200 per day. Which of the following is correct?

Figure 18-12. The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. -Refer to Figure 18-12. If the shop charges $150 per repair and pays each of its mechanics a wage of $700 per day, then what is the marginal profit of the second mechanic?

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

Sunshine's Organic Market sells organic produce. Assume that labor is the only input that varies for the firm. The store manager has determined that if she hires 12 workers, the store can sell 300 pounds of produce per day. If she hires 13 workers, the store can sell 370 pounds of produce per day. The store earns $4 for each pound of produce that it sells, and the manager pays each worker $80 per day. Assuming no changes in either the daily wages paid to store workers or the price at which the store sells its produce, what is the minimum number of sales that would allow the firm to increase its profits by hiring a 14th worker?