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Exam 18: The Markets for the Factors of Production

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Question 81

True/False

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The opportunity cost of leisure is impossible to measure,since we can't measure leisure time in dollars.

A) True
B) False

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Question 82

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What do we know about the slope of an individual worker's labour supply curve

A) It cannot slope downward.
B) It slopes downward if that person responds to a higher wage by taking fewer hours of leisure per week.
C) It slopes downward if that person responds to a higher opportunity cost of leisure by working fewer hours per week.
D) It is horizontal if that person works the same number of hours per week, regardless of the opportunity cost of leisure.

E) A) and D)
F) None of the above

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Question 83

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Scenario 18-3 In 2015, Syria experienced civil unrest that sent thousands of refugees across the Aegean Sea to Greece where they sought relief from the fighting. -Refer to Scenario 18-3.When a labour market experiences a surplus of labour,what experiences downward pressure

When we consider all factors of production, such as labour, capital, and land, how can we find the market equilibrium? How do the changes of supply of one factor of production affect the use of other factors of production?

For a lawn mowing and yard maintenance business,the capital stock would include lawn mowers,rakes,shovels,and hoses.

A change in the supply of any one factor alters the earnings of all the other factors.

Explain how a firm values the contribution of workers to its profitability.How would a profit-maximizing competitive firm choose the optimal level of employment?

What is the equilibrium rental income paid to the owners of capital at any point in time

Figure 18-1 The figure represents the value of marginal product for a firm that sells its product in a competitive market. -Refer to Figure 18-1.The value of the marginal-product curve shown in this figure is the same as which of the following

Describe the difference between the purchase price of capital and the rental price of capital.If you know the value of marginal product from the flow of capital services,how would you determine the market price for the capital stock?

Figure 18-4 -Refer to Figure 18-4.Which factor could possibly explain the shift of the labour demand curve from D₁ to D₂

Capital owners are compensated according to the value of the marginal product of that capital.

What is the opportunity cost of an hour of leisure

Scenario 18-1 Madison Kelp owns three boats, which participate in commercial fishing for fresh Pacific salmon off the coast of British Columbia.As part of her business, she hires a captain and several crewmembers for each boat.In the market for fresh Pacific salmon, there are thousands of firms like Madison's.While Madison 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 18-1.In the fresh Pacific salmon product market,what does Madison control

Figure 18-3 -Refer to Figure 18-3.If the relevant labour supply curve is S₂ and the current wage is W₁ ,what do we know about the condition of this labour market

A profit-maximizing firm starts with 100 employees and then increases employment.What occurs when 100 more employees are hired

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

What factors of productions does the distinction between purchase price and rental price apply to

If one were to consider a university as a business,how would the economists regard the computers in the computer labs

What does the labour supply curve reflect