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Exam 18: The Markets for the Factors of Production

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Question 41

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Suppose that the wage paid to workers who detassel corn rises. What happens in the market for workers who weed soybean fields, given that workers who detassel corn can easily work weeding soybean fields?

A) The demand curve for soybean workers increases.
B) The demand curve for soybean workers decreases.
C) The supply curve for soybean workers increases.
D) The supply curve for soybean workers decreases.

E) All of the above
F) None of the above

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Question 42

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The value of the marginal product is

A) total revenue minus total cost.
B) the change in total output divided by the change in an input.
C) the marginal product of an input times the price of the output.
D) total output divided by total inputs.

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

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Question 43

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The inputs used to produce goods and services are called

Figure 18-2 The figure below shows the production function for a particular firm. -Refer to Figure 18-2. Suppose the firm pays a wage equal to $320 per unit of labor and sells its output at $15 per unit. How many units of labor should the firm hire to maximize profit?

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. Suppose that the firm suffers a loss of some of their technology such as the theft of their industrial mixers. After the theft, MadeFromScratch employees produce fewer cupcakes than they could before because they must mix the cupcake batter by hand rather than using the high-speed mixers. Because of this change, the firm's

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. Assuming MadeFromScratch is a competitive, profit-maximizing firm, how many workers will the firm hire?

Suppose the government designates certain areas within a community to be "wetlands," making it illegal to build on the land. What happens to land not classified as "wetlands" within the community? (i) The price of non-wetland land will rise.(ii) The marginal product of non-wetland land will fall. (iii) The marginal product of non-wetland land will rise.

To say that a firm is competitive in the labor market is to say that the firm can choose

Figure 18-1. 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 18-1. What is the marginal product of the second mechanic?

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. Based on the shape of the curve, the (i) Total product is increasing. (ii) Total product is decreasing. (iii) Marginal product is increasing. (iv) Marginal product is decreasing.

Describe the process by which the market for capital and the market for land reach equilibrium. As part of your description, elaborate on the role of the stock of the resource versus the flow of services from the resource.

A competitive firm will hire workers up to the point at which the value of the marginal product of labor equals the

Table 18-7 -Refer to Table 18-7. What is the value for the cell labeled BB?

Table 18-B Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. Suppose that there is a technological advance that allows MadeFromScratch employees to produce more cupcakes than they could before. Because of this change, the firm's

Table 18-2 -Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week by various numbers of workers. If the price per bracelet in a perfectly competitive product market is $5, how many workers would the firm employ if the weekly wage rate is $375?

Table 18-10 -Refer to Table 18-10. This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor. Each baseball sells for $5 in a competitive market. For which level of employment is the marginal product of labor greatest?

Assume all capital is owned by firms, rather than by households. Under this assumption, capital is paid according to the value of its marginal product

Figure 18-4 The graph below illustrates the market for nurses who work in doctors' offices. -Refer to Figure 18-4. If the supply of medical supplies that nurses use when performing sports physicals decreases, what happens in the market for nurses?

Which of the following is an example of a firm's derived demand?

Land, labor, and capital are examples of factors of production.