Chapter 26

Question 1

The demand for goos and services is called ________ demand, while the demand for resources is called _______demand

Answer 1

C. final ;derived

Question 2

Which statement is true?
A. A change in derived demand brings about a change in final demand.
B. A change in final demand brings about a change in derived demand.
C. A rise in final demand is associated with a decline in derived demand.
D. None of these statement is true.

Answer 2

B. A change in final demand brings about a change in derived demand.

Question 3

The additional revenue obtained by selling the output produced by one more unit of a resource is its

Answer 3

B. Marginal revenue product

Question 4

In general, the MRP __________as output increases.

Answer 4

A. Declines

Question 5

Productivity is _______per unit of ________.

Answer 5

A. output; input

Question 6

The firm will rent more and more lnad until the rent and the __________ of the last unit of land hired are equal.

Answer 6

B. MRP

Question 7

Workers in one country are more productive than workers in another country because

Answer 7

B. they have more complementary factors to work with

Question 8

The demand for resources is based on

Answer 8

C. both the demand for the final product and the productivity of the resource.

Question 9

The additional ouput that one additional input of labor is responsible for is its

Answer 9

B. mraginal physical product

Question 10

A rise in the wage rate would lead to a movement

Answer 10

C. up the MRP curve and a decline in the number of workers hired.

Question 11

The firm’s demand schedule for a resource is its _______schedule.

Answer 11

B. MRP

Question 12

A firm will operate a that loin where ________is equal to 1.

Answer 12

B. the MRP of capital/price of capital

Question 13

A firm will keep hiring more and more of a resource up to the point where its MRP equals

Answer 13

C. its price

Question 14

If the MRP of the last worker hired is lower than the wage rate the firm has

Answer 14

A. hired too many workers

Question 15

The most effective way to increase the productivity of labor would be to

Answer 15

A. increase capital

Question 16

As output rises

Answer 16

B. both marginal revenue product and marginal physical products fall.

Question 17

How much of a resource a firm will purchase depends on

Answer 17

E. All of the choices are correct

Question 18

A fall in the demand for the final product brings about

Answer 18

B. a fall in derived demand

Question 19

A firm will continue hiring labor as long as the MRP of labor __________the amrket wage rate.

Answer 19

D. is greater than

Question 20

The maimum units of the input you would possibly hire would be

Answer 20

C. 5

Question 21

An increase in the price of crude oil, a basic input into the production of gasoline, is likely to

Answer 21

B. put upward pressure on the price of gasoline

Question 22

A decline in the wage rate would

Answer 22

A. raise the quantiy of labor demanded

Question 23

An increase in the demand for steel occurs. As a result, firms in the steel industry will

Answer 23

D.increase their demand for capital

Question 24

If the output per acre of land triples, then the productivity of an acre of lnad

Answer 24

E. has tripled

Question 25

Derived demand is a demand for

Answer 25

C. resources