CHAPTER 18 - Chapter18 TheMarkets fortheFactorsofProduction...

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Chapter 18 The Markets for the Factors of Production 1. The demand  for labor by a particular firm is ultimately derived  from a. the productivity of labor. b. the productivity of the firm’s other inputs. c. demand  for the firm’s output. d. the market supply  of labor. ANSWER: c the demand  for the firm’s output. SECTION: INTRO OBJECTIVE: 1 2. If the demand  for automobiles increases, which of the following markets would  also experience an  increase in demand? a. automobile workers b. bicycle manufacturers c. bus drivers d. financial analysts ANSWER: a automobile workers SECTION: INTRO OBJECTIVE: 1 3. Which of the following  is an assumption  made  about  a competitive labor market? a. A firm must  offer a higher wage rate to attract more labor. b. A firm must  offer a lower wage rate to attract more labor. c. A firm cannot influence the market wage rate. d. The labor supply  curve facing a firm is relatively inelastic. ANSWER: c A firm cannot influence the market wage rate. SECTION:1 OBJECTIVE: 1 4. If eight workers can manufacture  70 tables per day and  nine workers can manufacture  90 tables per  day, and  if tables can be sold for $10 each, the value of marginal product  of the ninth  worker is a. 20 tables. b. 90 tables. c. $200. d. $900. ANSWER: c $200. SECTION:1 OBJECTIVE: 1 5. An increasing marginal product  of labor would  be most commonly found a. at high levels of employment. b. in perfect competition. c. at low levels of employment. d. when  prices are rising. ANSWER: c at low levels of employment. SECTION:1 OBJECTIVE: 1 105
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106   Chapter 18/The Markets for the Factors of Production 6. If a firm is a price taker in the labor market, then the value of the marginal product  of labor equals  labor’s marginal a. product. b. product  multiplied  by the price of the final product. c. product  times the wage rate. d. product  divided  by the wage rate. ANSWER: b product  multiplied  by the price of the final product. SECTION:1 OBJECTIVE: 1 7. Value of marginal product  is defined  as the additional  a. output  a firm would  receive after hiring one more unit of resource. b. cost of hiring one more unit of resource. c. revenue  earned  by selling one more unit of product. d. revenue  earned  by hiring one more unit of resource.
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This note was uploaded on 10/22/2010 for the course BUSINESS BAIU09 taught by Professor Mr.ken during the Spring '10 term at American InterContinental University Dunwoody.

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CHAPTER 18 - Chapter18 TheMarkets fortheFactorsofProduction...

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