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ECON Exam 2 > chapter 18-20 > Flashcards

chapter 18-20 Flashcards

1
Q

Most of the total income earned in the U.S. economy is ultimately paid to

A

households in the form of wages and fringe benefits.

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2
Q

Along the horizontal axis of the production function we typically measure

A

the quantity of input.

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3
Q

A competitive firm sells its output for $30 per unit. The marginal product of the 10th worker is 20 units of output per day; the marginal product of the 11th worker is 16 units of output per day. The firm pays its workers a wage of $150 per day. For the 11th worker, the value of the marginal product of labor is

A

$480.

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4
Q

For maximum profit, a firm hires labor up to the point at which the wage equals
(i)
the value of the marginal product of labor.
(ii)
the marginal cost of an additional unit of output.
(iii)
output price multiplied by the marginal product of labor.

A

(i) and (iii)

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5
Q

graph
Refer to Figure 18-3. Suppose that the price of the output is $20. What is the value of the marginal product of the fourth worker?

A

$20

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6
Q

chart
Refer to Table 18-1. Suppose that the firm pays its workers $45 per day. Each unit of output sells for $10. How many days of labor should the firm hire?

A

4

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7
Q

chart
Refer to Table 18-2. The following table shows the number of calculators that can be assembled per week by various numbers of workers. If the price per calculator in a perfectly competitive product market is $8, how many workers would the firm employ if the weekly wage rate is $800?

A

3

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8
Q

chart
Refer to Table 18-6. What is the market price of the final good?

A

$10

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9
Q

chart
Refer to Table 18-6. What is the value for the cell labeled BB?

A

180 units

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10
Q

chart
Refer to Table 18-7. What is the marginal product of the third worker?

A

50 bushels

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11
Q

chart
Refer to Table 18-8. Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day. How many workers should this firm hire to maximize its profit?

A

4 workers

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12
Q

chart
Refer to Table 18-10. What is the marginal profit of the fourth worker?

A

$25

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13
Q

chart
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 $5 in a competitive market. For which level of employment is the marginal product of labor greatest?

A

2 workers

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14
Q

chart
Refer to Table 18-10. Suppose that there is a technological advance that allows Caroline’s employees to produce more cookies than they could before. Because of this change, the firm’s

A

demand for labor shifts right.

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14
Q

graph
Refer to Figure 18-4. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the price of breakfast pastries falls, what happens in the market for bakers?

A

Demand decreases from D2 to D1.

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14
Q

graph
Refer to Figure 18-4. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the supply of commercial-grade ovens in which the bakers bake their breads and pastries increases, what happens in the market for bakers?

A

Demand increases from D1 to D2.

15
Q

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

A

increase

16
Q

The term Luddite is used to describe

A

a person who opposes technological advance

17
Q

Wendy’s hourly wage decreases from $15 to $12. Which of the following describes a consequence of the decrease in Wendy’s wage?

A

The opportunity cost of Wendy’s leisure time has decreased.

Wendy may choose to work more hours due to the decrease in her wage.

Wendy may choose to work fewer hours due to the decrease in her wage.

All of the above are correct.

18
Q

Immigration is an important

A

source of shifts in labor supply.

19
Q

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

A

The labor supply will decrease.

20
Q

Which of the following could increase the labor-supply curve for computer-repair technicians?

A

an increase in immigration

20
Q

Which of the following is correct?

Any event that changes the supply or demand for labor must change the value of the marginal product.

A profit-maximizing firm hires workers so long as the wage rate exceeds the value of the marginal product of labor.

An increase in the supply of labor increases both employment and wages.

A decrease in the demand for labor decreases wages but increases employment.

A

Any event that changes the supply or demand for labor must change the value of the marginal product.

21
Q

Consider the market for university economics professors. Suppose the opportunity cost of going to graduate school to get a Ph.D. in economics decreases for many individuals. Suppose it generally takes about five years to get a Ph.D. in economics. Holding all else constant, in five years the equilibrium quantity of university economics professors will

A

increase

22
Q

Consider the market for medical doctors. Suppose the opportunity cost of going to medical school decreases for many individuals. Suppose it generally takes about ten years to become a practicing doctor. Holding all else constant, in ten years the equilibrium quantity of doctors will

A

increase.

23
Q

Consider the labor market for computer programmers. During the late 1990s, the value of the marginal product of all computer programmers increased dramatically. Holding all else equal, what effect did this process have on the labor market for computer programmers? The equilibrium wage

A

increased, and the equilibrium quantity of labor increased.

24
Q

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

A

increases, and the equilibrium quantity of labor increases

25
Q

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.

26
Q

A significant slowdown in the growth of productivity persisted in the U.S. economy between

A

1973 and 1995

27
Q
A

ECON Exam 2 (2 decks)

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