1. In a market economy, the high salaries of some star baseball players such as Adrian Gonzalez, are determined by
Team owners, based on the total number of star athletes they plan to hire.
B
advertising companies, based on what they are willing to pay to advertise their products at baseball games.
C
the interaction of the demand for star athletes and the supply of star athletes.
D
consumers, based on their willingness to watch baseball games.
2. Demand in factor markets differs from demand in product markets in that
A
the demand for a factor of production is difficult to determine.
B
the demand for a factor of production is influenced by workers' productivity and by the producers' expected sales revenues, not by tastes and preferences of consumers.
C
demand for a factor of production is based on the tastes and preferences of firms.
D
demand for a factor of production is based on the tastes and preferences of resource owners.
3. The demand for labor is described as a derived demand because
A
it is derived by workers seeking to earn income to fund the consumption of goods and services.
B
it is derived by producers seeking to make profits by starting new businesses.
C
it is derived from the demand for products that use labor in the production process.
D
it is derived from government institutions that rely on labor markets for the purpose of raising tax revenue.
4. Which of the following is not an example of a derived demand?
A
Several of the animated films released between 1999 and 2001 failed to earn a profit, which caused some companies to stop making these films, thereby decreasing the demand for animators.
B
Seth Bullock, a personal injury attorney, complains that he is earning far less now than a few years ago largely because personal injury cases have been undercut by state laws limiting class-action suits and payouts on damages.
C
Millicent Manning, the owner of a furniture store, is concerned that her sales have fallen for the past six months. She attributes this to the downturn in the real estate market.
D
As advancements in medical technology increase the safety and success of laser eye surgery, the demand for opticians has decreased.
5. Marginal revenue product for a perfectly competitive seller is equal to
A
the output price multiplied by the total product of labor.
B
the output price multiplied by the number of workers hired.
C
the change in total revenue that results from hiring another worker.
D
the marginal cost of production.
6. What is the difference between labor's marginal product and marginal revenue product?
A
The marginal product of labor is the increase in output as a result of hiring an additional worker while the marginal revenue product of labor is the increase in profit as a result of hiring an additional worker.
B
The marginal revenue product of labor is the dollar value of hiring an additional worker while the marginal product of labor is the increase in the firm's physical output as a result of hiring an additional worker.
C
The marginal product of labor is the additional labor's contribution to the firm's total output while the marginal revenue product is the additional labor's contribution to the firm's total sales revenue.
D
Labor's marginal product is a measure of labor's productivity while labor's marginal revenue product is a measure of labor's ability to sell the firm's products.
7. What is the difference between a firm's marginal revenue and its marginal revenue product?
A
Marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the profit earned from hiring one more worker.
B
Marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the change in total revenue from hiring one more worker.
C
Marginal revenue is the increase in revenue when a firm raises its output price while marginal revenue product is the increase in the marginal product when a firm hires an additional worker.
D
There is no difference between the two terms.
1. In a market economy, the high salaries of some star baseball players such as Adrian Gonzalez, are determined by
|
Team owners, based on the total number of star athletes they plan to hire. |
||
| B |
advertising companies, based on what they are willing to pay to advertise their products at baseball games. |
|
| C |
the interaction of the demand for star athletes and the supply of star athletes. |
|
| D |
consumers, based on their willingness to watch baseball games. |
2. Demand in factor markets differs from demand in product markets in that
| A |
the demand for a factor of production is difficult to determine. |
|
|
B |
the demand for a factor of production is influenced by workers' productivity and by the producers' expected sales revenues, not by tastes and preferences of consumers. |
|
|
C |
demand for a factor of production is based on the tastes and preferences of firms. |
|
|
D |
demand for a factor of production is based on the tastes and preferences of resource owners. |
|
3. The demand for labor is described as a derived demand because
|
A |
it is derived by workers seeking to earn income to fund the consumption of goods and services. |
|
|
B |
it is derived by producers seeking to make profits by starting new businesses. |
|
|
C |
it is derived from the demand for products that use labor in the production process. |
|
|
D |
it is derived from government institutions that rely on labor markets for the purpose of raising tax revenue. |
4. Which of the following is not an example of a derived demand?
|
A |
Several of the animated films released between 1999 and 2001 failed to earn a profit, which caused some companies to stop making these films, thereby decreasing the demand for animators. |
|
|
B |
Seth Bullock, a personal injury attorney, complains that he is earning far less now than a few years ago largely because personal injury cases have been undercut by state laws limiting class-action suits and payouts on damages. |
|
|
C |
Millicent Manning, the owner of a furniture store, is concerned that her sales have fallen for the past six months. She attributes this to the downturn in the real estate market. |
|
|
D |
As advancements in medical technology increase the safety and success of laser eye surgery, the demand for opticians has decreased. |
5. Marginal revenue product for a perfectly competitive seller is equal to
|
A |
the output price multiplied by the total product of labor. |
|
|
B |
the output price multiplied by the number of workers hired. |
|
|
C |
the change in total revenue that results from hiring another worker. |
|
|
D |
the marginal cost of production. |
6. What is the difference between labor's marginal product and marginal revenue product?
|
A |
The marginal product of labor is the increase in output as a result of hiring an additional worker while the marginal revenue product of labor is the increase in profit as a result of hiring an additional worker. |
|
|
B |
The marginal revenue product of labor is the dollar value of hiring an additional worker while the marginal product of labor is the increase in the firm's physical output as a result of hiring an additional worker. |
|
|
C |
The marginal product of labor is the additional labor's contribution to the firm's total output while the marginal revenue product is the additional labor's contribution to the firm's total sales revenue. |
|
|
D |
Labor's marginal product is a measure of labor's productivity while labor's marginal revenue product is a measure of labor's ability to sell the firm's products. |
7. What is the difference between a firm's marginal revenue and its marginal revenue product?
|
A |
Marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the profit earned from hiring one more worker. |
|
|
B |
Marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the change in total revenue from hiring one more worker. |
|
|
C |
Marginal revenue is the increase in revenue when a firm raises its output price while marginal revenue product is the increase in the marginal product when a firm hires an additional worker. |
|
|
D |
There is no difference between the two terms. |
Related textbook solutions
Related questions
1
The following table shows the market demand schedule and supply schedule for notebooks.
|
Price ($/unit) |
Quantity Demanded (units) |
Quantity Supplied (units) |
|
1 |
20 |
4 |
|
2 |
16 |
6 |
|
3 |
14 |
10 |
|
4 |
12 |
12 |
|
5 |
10 |
14 |
|
6 |
7 |
17 |
|
7 |
4 |
20 |
|
8 |
2 |
22 |
|
9 |
1 |
25 |
Refer to the table above. Assume that the market for notebooks is in equilibrium.
1. Which of the following is likely to happen if there is an increase in the school enrollment rate, everything else remaining unchanged?
A. Both the equilibrium price and quantity of notebooks decrease.
B. The equilibrium price and quantity remain unchanged.
C. Both the equilibrium price and quantity of notebooks increase.
D. The equilibrium price increases, but the equilibrium quantity of notebooks decreases.
2. A shortage occurs in a market when:
A.price is lower than the equilibrium price.
B. price is higher than the equilibrium price.
C. supply exceeds demand.
D. the marginal utility of consumption is negligible.
3. A change in the quantity demanded of a good is:
A. the outcome of a change in income.
B. the outcome of a change in tastes and preferences.
C. represented by a shift to a new demand curve.
D. represented by a movement along the demand curve.
4. The following table shows the demand schedules of three consumers of wine. Assume that these three buyers constitute the entire market.
|
PRICE ($/Bottle) |
Sandra's Demand (Bottles) |
David's Demand (Bottles) |
Mary's Demand (Bottles) |
|
â$8 |
2 |
10 |
|
|
â$6 |
14 |
15 |
18 |
|
â$4 |
23 |
24 |
|
|
â$2 |
24 |
27 |
28 |
Refer to the table above. If the market price of wine is $8/bottle, and the market demand for wine is 19 bottles, David's consumption of wine is:
A. 12 bottles.
B. 9 bottles.
C. 4 bottles.
D. 7 bottles.
5. Which of the following factors will NOT cause a shift in the demand for a good?
A. A change in the number of consumers
B. A change in the market price of the good
C. A change in tastes and preferences
D. A change in consumer incomes
6. Are all markets perfectly competitive?
A. No, there are other market types where firms have considerable power to control the price.
B. Yes, any economic system with a market structure is by definition perfectly competitive.
C. No, there are also command and control markets that are run by a central government.
D. No, in other types of markets, sellers offer identical goods and simply accept the market price.
7. Assume that a seller in a perfectly competitive market charges more than the equilibrium price. It is likely that this seller will:
A. increase his profit.
B. lose only a few buyers.
C. increase his sales.
D. lose almost all of his buyers.
8. The willingness to pay for a commodity:
A. increases as the consumption of the commodity increases.
B. is always less than the market price of the commodity.
C. decreases as the consumption of the commodity increases.
D. is always greater than the market price of the commodity.
9. Which of the following is likely to lead to a right shift in the supply curve of cotton?
A. An increase in labor productivity due to training programs
B. A rise in labor costs due to wage demands by labor unions
C. An increase in the price of cotton
D. A decrease in the price of cotton
10. The buyers of a good will want to purchase it as long as their willingness to pay for the good is:
A. equal to zero.
B. greater than or equal to the price.
C. greater than zero.
D. less than the price.
