quiz 1 the demand for resources factor market and firm graphs

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Factor Market Quiz 1 The Demand for Resources Factor Market and Firm Graphs

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Which of the following statements best illustrates the concept of derived demand? A decline in the price of margarine will reduce the demand for butter. A decline in the demand for shoes will cause the demand for leather to decline. As income goes up the demand for farm products will increase by a smaller relative amount. When the price of gasoline goes up, the demand for motor oil will decline.

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Page 1: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Factor Market

Quiz 1The Demand for Resources

Factor Market and Firm Graphs

Page 2: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Which of the following statements best illustrates the concept of derived demand?

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25% 25%25%25%1. A decline in the price of margarine will reduce the demand for butter.

2. A decline in the demand for shoes will cause the demand for leather to decline.

3. As income goes up the demand for farm products will increase by a smaller relative amount.

4. When the price of gasoline goes up, the demand for motor oil will decline.

Page 3: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

T he demand for labor is derived from:

1. the demands for other variable inputs.

2. consumer demand for the product or service it is helping to produce.

3. the cost-minimization rule.

4. the supply of related inputs.

1 2 3 4

25% 25%25%25%

Page 4: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Fastest RespondersSeconds Participant Seconds Participant

Page 5: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Marginal revenue product measures the:

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1. amount by which the extra production of one more worker increases a firm's total revenue.

2. decline in product price that a firm must accept to sell the extra output of one more worker.

3. increase in total resource cost resulting from the hire of one extra unit of a resource.

4. increase in total revenue resulting from the production of one more unit of a product

Page 6: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

The purely competitive employer of resource A will maximize the profits from A by equating

the:

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25% 25%25%25%1. price of A with the MRC of A.2. marginal productivity of A with

the MRC of A. 3. marginal productivity of A with

the price of A.4. price of A with the MRP of A.

Page 7: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

The MRP curve for labor:

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25% 25%25%25%1. intersects the firm's labor demand curve from above.

2. is the firm's labor demand curve. 3. lies below the firm's labor

demand curve. 4. lies above the firm's labor

demand curve.

Page 8: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Fastest RespondersSeconds Participant Seconds Participant

Page 9: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Marginal product is:

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25% 25%25%25%1. the output of the least skilled worker.

2. a worker's output multiplied by the price at which each unit can be sold.

3. the amount any given worker contributes to the firm's total revenue.

4. the amount an additional worker adds to the firm's total output.

Page 10: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

If one worker can pick $30 worth of grapes and two workers together can pick $50 worth of

grapes, the: 1. marginal revenue product of each

worker is $25. 2. marginal revenue product of the

first worker is $20.3. marginal revenue product of the

second worker is $20. 4. data given do not permit the

determination of the marginal revenue product of either worker. 1 2 3 4

25% 25%25%25%

Page 11: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Fastest RespondersSeconds Participant Seconds Participant

Page 12: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

A competitive employer should hire additional

labor as long as:

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1. the MRP exceeds the wage rate.2. the wage rate is less than MP.3. average product exceeds MP.

4. average product exceeds MP.

Page 13: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

A firm will find it profitable to hire workers up

to the point at which their:

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25% 25%25%25%1. marginal resource cost equals

their wage rate.2. wage rate equals product price.3. MP is equal to their MRP. 4. marginal resource cost is equal

to their MRP.

Page 14: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

The MRP curve is the resource demand curve for:

1. neither the purely competitive nor the imperfectly competitive seller.

2. the imperfectly competitive seller, but not the purely competitive seller.

3. the purely competitive seller, but not the imperfectly competitive seller.

4. both the purely competitive and imperfectly competitive seller.

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Page 15: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Fastest RespondersSeconds Participant Seconds Participant

Page 16: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Employers will hire more units of a resource if:

1. the price of the resource increases.

2. the productivity of the resource increases.

3. the price of the good being produced declines.

4. the price of a complementary resource rises.

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25% 25%25%25%

Page 17: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

If a firm is hiring a certain type of labor under

purely competitive conditions: 1. its labor demand curve will be

perfectly elastic at the market-determined wage rate.

2. the labor supply curve will lie above the marginal labor cost curve.

3. the labor supply and marginal labor (resource) cost curves will coincide and be upsloping.

4. the labor supply and marginal labor (resource) cost curves will coincide and be perfectly elastic.

1 2 3 4

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Page 18: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Fastest RespondersSeconds Participant Seconds Participant

Page 19: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Which of the following describes a purely competitive labor market?

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25% 25%25%25%1. MRP = Wage Rate.2. MRP > Wage Rate.3. Wage Rate > MRC.4. Wage Rate < MRC.

Page 20: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

The labor supply curve facing a purely competitive employer is __________ whereas the

labor supply curve facing a monopsonist is ___________.

1. upward sloping; horizontal2. downward sloping; vertical3. vertical; upward sloping4. horizontal; upward sloping

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Page 21: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

The economic term for a sole employer in

a nonunion community is:

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1. monopsonist.2. monopolist. 3. bilateral competitor.4. bilateral monopolist.

Page 22: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Fastest RespondersSeconds Participant Seconds Participant

Page 23: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Which of the following is most likely to be an example of monopsony?

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25% 25%25%25%

1. the market for fast-food workers in a large summer resort town

2. the market for card dealers in Las Vegas.

3. the market for major league baseball umpires.

4. the market for retail sales clerks in a major city.

Page 24: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

A monopsonist:

1. boosts the wage rate above the competitive level to attract more workers.

2. reduces the number of workers it employs so that it can pay each worker a lower wage rate.

3. is a "wage taker." 4. pays a wage rate equal to MR

1 2 3 4

25% 25%25%25%

Page 25: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

"Player drafts" of professional athletes:

1. increase the competitiveness of the labor market for professional athletes.

2. reduce the profitability of professional sports franchises.

3. promote monopsony in the hire of professional athletes.

4. increase salaries of professional athletes. 1 2 3 4

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Page 26: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Fastest RespondersSeconds Participant Seconds Participant

Page 27: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

If the diagram to the left was relevant to an

individual firm, we could conclude that

the firm is:

1. a pure competitor in the hire of labor.

2. a monopsonist in the hire of labor.

3. selling its product in an imperfectly competitive market.

4. selling its product in a purely competitive market.

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Page 28: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Refer to the above diagrams.

The firm:

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1. is a monopsonist in the hire of labor.

2. must be selling its product in an imperfectly competitive market.

3. is a "wage taker."4. must pay a higher marginal

resource cost for each successive worker.

Page 29: Quiz 1 The Demand for Resources Factor Market and Firm Graphs

Participant LeadersPoints Participant Points Participant