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Exam 18: The Market For the Factors of Production.

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Question 221

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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.If Gertrude is a price taker in the labor market,she can choose

A) the price at which she will sell the fish she catches.
B) how many crew members she will hire.
C) the wages that she will pay to her crew members.
D) All of the above.

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

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Question 222

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An increase in immigration will lower the equilibrium wage,all else held constant.

A) True
B) False

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Question 223

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If a firm experiences diminishing marginal productivity of labor,the marginal product

An increase in the output price will increase the firm's demand for labor,all else equal.

Figure 18-3 -Refer to Figure 18-3.What is the marginal product of the fourth worker?

The Black Death in fourteenth-century Europe resulted in

Suppose that a new invention increases the marginal productivity of labor,shifting labor demand to the right.Such an invention would be an example of

In general,less productive workers are paid less than more productive workers.

Suppose that the labor market for life guards is initially in equilibrium.Then a new television series debuts which glamorizes the social opportunities for life guards.What happens to the equilibrium wage and quantity of life guards?

The quantity available of one factor of production can affect the marginal product of other factors.

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

In economics,the term capital refers to

The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ.

Capital income does not include income paid to households for the use of their capital.

Table 18-9 -Refer to Table 18-9.This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor.Each baseball sells for $2.50 in a competitive market and the firm pays each unit of labor a wage equal to $225 per day.How many units of labor should the firm hire to maximize profit?

Which of the following would not shift a market labor supply curve to the right?

If the price of airline tickets falls,what will happen to the demand curve for flight attendants?

Suppose that a large lake in the middle of Minnesota evaporates,leaving more fertile farm land for growing corn available.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and rents earned by landowners?

Suppose that a competitive firm hires labor up to the point at which the value of the marginal product equals the wage and that labor is the only input that varies for the firm.If the firm pays a wage of $700 per week and the marginal product of labor equals 20 units per week,then the marginal cost of producing an additional unit of output is

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,in the labor market for health care employees the equilibrium wage