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Exam 18: The Markets for the Factors of Production

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Question 91

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Consider the labor market for short-order cooks. A labor-augmenting technological change such as a faster food processor will cause

A) both equilibrium wages and equilibrium employment to increase.
B) both equilibrium wages and equilibrium employment to decrease.
C) equilibrium wages to increase and equilibrium employment to decrease.
D) equilibrium wages to decrease and equilibrium employment to increase.

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Question 92

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When labor supply increases,

A) the marginal productivity of workers always increases.
B) profit-maximizing firms reduce employment.
C) wages increase as long as labor supply is upward sloping.
D) wages decrease as long as labor demand is downward sloping.

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Question 93

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Ellen receives a raise at her current part-time job from $8 to $10 per hour. If her labor supply curve is upward sloping, she will work fewer hours after receiving the pay raise.

As a result of a labeling mistake at the chemical factory, a farmer accidentally sprays weedkiller rather than fertilizer on half her land. As a result, she loses half of her productive farmland. If the property of diminishing returns applies to all factors of production, she should expect to see

Scenario 18-6 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 18-6. As a result of these two events, holding all else constant, the equilibrium quantity of university economics professors will

Figure 18-3 The figure shows a particular profit-maximizing, competitive firm's value-of-marginal-product (VMP) curve. ​ -Refer to Figure 18-3. The firm would choose to hire three workers if

For competitive firms, the curve that represents the value of marginal product of labor is the same as the demand for labor curve.

Suppose that workers immigrate to Minnesota from Canada. Which of the following correctly describes what would happen in the market for labor in Minnesota?

Which of the following statements is correct?

If the selling price of a bushel of cranberries rises, we would expect the demand for labor in the cranberry industry to

Figure 18-6 ​ -Refer to Figure 18-6. Which of the following events would most likely explain a shift of the labor demand curve from D₂ back to D₁?

The U.S. economy has been very successful in absorbing immigrants and putting them to work.

As the number of concrete workers in the United States falls, the wage paid to the remaining concrete workers will necessarily fall as well.

A competitive, profit-maximizing pays its workers a wage of $200 per day and it sells its output for $10 per unit. Determine the marginal product, on a daily basis, of the last worker hired.

Willie's wage increased, and he responded by enjoying more hours of leisure per day. Is Willie's behavior consistent with an upward-sloping labor-supply curve?

Does the movement of workers from other countries to the U.S. affect the demand for labor in the U.S., or does it affect the supply of labor in the U.S.?

The supply of labor in any one market depends on the opportunities available in other markets.

Suppose that the "Millennial" generation values leisure more than past generations. We can expect a decrease in the labor supply as the Millennials enter their prime working ages and a corresponding increase in wages.

Movements of workers from country to country can cause shifts in the labor supply curves for both countries.

How does technological advance affect the demand for labor?