Quiz 17: Markets for Factors of Production

The four factors of production are A)productive factors,neutral factors,entrepreneurial factors,and nonproductive factors. B)men,women,animals,and capital. C)labour,capital,entrepreneurship,and land. D)machines,factories,buildings,and farms. E)labour,money,profits,and land.

Consider the factors of production.The price in ________ market is a rental rate. A)a capital B)a housing C)an entrepreneurship D)a labour E)a capital services

Coal is an example of A)a nonrenewable natural resource. B)a renewable natural resource. C)a public resource. D)a common resource. E)capital.

Water from the Mackenzie River is an example of A)a nonrenewable natural resource. B)a natural resource that can be used repeatedly. C)capital. D)a static resource. E)a capital service.

Natural resources that are depleted as they are used A)should not be used. B)are called nonrenewable natural resources. C)should be used for only highly valued purposes. D)should be conserved for future generations. E)are called renewable natural resources.

An example of a nonrenewable natural resource is A)oil. B)Lake Erie. C)rain. D)sunshine. E)the St.Lawrence River.

Choose the statement that is incorrect. A)Capital consists of the tools,instruments,machines,buildings,and other constructions that have been produced in the past and that businesses now use to produce goods and services. B)A market for capital services is a rental market. C)The services of the capital that a firm owns and operates have an implicit price that arises from depreciation and interest costs. D)Capital is a factor of production. E)Most capital services are traded in a market.

Choose the statement that is incorrect. A)Labour services are the physical and mental work effort that people supply to produce goods and services. B)A labour market is a collection of people and firms who trade labour services. C)The price of labour services is the wage rate. D)Most labour services are traded on a job contract. E)All labour markets are competitive.

Tim is opening a new online store.He is considering buying or leasing some new computers.The purchase price of a computer is $900 and after three years it is worthless.The annual cost of leasing a computer is $450.The price of capital equipment is ________.The rental rate of capital is ________. A)$900;$450 B)$450;$450 C)$900;$900 D)$450;$900 E)100 percent;50 percent

Firms hire labour A)to minimize the average cost of the employment of labour. B)to exploit workers. C)to maximize profit. D)because capital is more expensive. E)to minimize costs.

To maximize profit,a firm hires labour until A)there is no more labour available at the market wage rate. B)they can sell that labour for no more than what they paid for it. C)the wage rate paid to the labour equals the marginal cost of production. D)the additional benefit from hiring the labour is equal to the additional revenue the labour generates. E)the value of marginal product equals the wage rate.

To maximize profit,the firm must equate the A)wage rate to the price of the good. B)wage rate to the marginal product of labour. C)value of marginal product to the factor price. D)marginal factor cost to the price of the output. E)marginal cost of the factor to the marginal product of the factor.

The value of marginal product of labour is the revenue A)generated by selling an additional unit of output. B)needed to hire an additional unit of labour. C)generated by employing an additional unit of labour. D)needed to cover the cost of producing an additional unit of output. E)generated to cover the cost of hiring an extra unit of labour.

If marginal product of a restaurant employee is 10 customers per hour,and the price of a meal is $15,the restaurant employee's value of marginal product is A)$15. B)$7.5. C)$12.5. D)$10. E)$150.

Suppose a gift shop in Corner Brook,Newfoundland,hires workers to personalize ornaments for Christmas.The store sells the personalized ornaments for $6 each.The value of marginal product of this store's fourth worker is $60.The marginal product of the fourth worker is A)6 ornaments. B)10 ornaments. C)60 ornaments. D)360 ornaments. E)90 ornaments.

If the marginal product of a baker is 10 loaves of bread,and the price of a loaf of bread is $2,the baker's value of marginal product is A)$2.00. B)$20.00. C)$0.20. D)$5.00. E)$12.00.

The Brown's Egg store in Lethbridge,Alberta hires workers to paint eggs.The price of an egg is $2.50.The value of marginal product of this store's fifth worker is $25.The marginal product of the fifth worker is A)62.5 eggs. B)25 eggs. C)2 eggs. D)10 eggs. E)0.1 eggs.

Use the table below to answer the following questions. Table 17.2.1 -Refer to Table 17.2.1.If the firm can sell all the output it wants for the price of $5 a unit,what is the value of marginal product of the 6th worker? A)$20 B)$0 C)$25 D)$40 E)$185

Use the table below to answer the following questions. Table 17.2.1 -Refer to Table 17.2.1.If the firm can sell all the output it wants for the price of $4 a unit,what is the profit-maximizing number of workers if the wage rate is $12? A)zero B)10 C)4 D)8 E)6

Use the table below to answer the following questions. Table 17.2.1 -Refer to Table 17.2.1.If the firm can sell all the output it wants for the price of $5 a unit,what is the profit-maximizing number of workers if the wage rate is $30? A)1 B)3 C)5 D)6 E)7

Use the table below to answer the following questions. Table 17.2.1 -Refer to Table 17.2.1.If the firm can sell all the output it wants for the price of $10 a unit,what is the profit-maximizing number of workers if the wage rate is $30? A)1 B)5 C)6 D)8 E)9

If the price of the firm's output decreases,the value of marginal product curve A)remains unchanged. B)becomes more elastic. C)becomes more inelastic. D)shifts leftward. E)shifts rightward.

Mr.Shaw has a small factory in Estevan,Saskatchewan.He will continue hiring labour as long as the value of marginal product of labour ________ the wage rate. A)is greater than B)is less than C)is less than or equal to D)determines E)maximizes

A profit-maximizing firm will continue to hire labour until the A)wage rate equals the marginal product of the last worker hired. B)value of marginal product of the last worker hired is maximized. C)value of marginal product of the last worker hired is negative. D)wage rate equals the value of marginal product of the last worker hired. E)value of marginal product of the last worker hired equals zero.

A firm's demand curve for labour shifts when there is a change in the A)wage rate. B)opportunity cost of labour. C)price of the firm's output. D)number of workers. E)marginal cost of labour.

A firm's demand curve for labour shifts for all of the following reasons except a change in A)the prices of other factors of production. B)technology. C)the price of the firm's output. D)wage rate. E)marginal product of labour.

Suppose a profit-maximizing firm hires labour in a competitive labour market.If the value of marginal product of labour is greater than the wage rate,the firm A)increases the wage rate. B)decreases the wage rate. C)increases the quantity of labour it hires. D)decreases the quantity of labour it hires. E)shifts to a more labour-intensive production process.

When the price of a firm's output increases, A)the supply of labour increases. B)the firm hires less labour. C)the marginal product of labour increases. D)the firm's demand for labour curve shifts leftward. E)the value of marginal product of labour increases.

A technological change that increases the value of marginal product of labour shifts the labour A)demand curve leftward. B)demand curve rightward. C)supply curve leftward. D)supply curve rightward. E)demand curve rightward and the labour supply curve rightward.

A decrease in the price of factors of production that are substitutes for labour shifts the labour A)demand curve leftward. B)demand curve rightward. C)supply curve leftward. D)supply curve rightward. E)demand curve leftward and the labour supply curve leftward.

Mr.Smith's firm competes in a perfectly competitive market.The firm is currently hiring 30 workers.The value of marginal product of the last worker is $7.00 per hour.The wage rate is $8.00 per hour.To increase profit,Mr.Smith A)continues hiring 30 workers because the firm earns a surplus of $1.00 on each worker hired. B)increases the price of the firm's product so that the value of marginal product of the last worker hired increases to $8.00 per hour. C)decreases the price of the firm's product so that the value of marginal product of the last worker hired increases to $8.00 per hour. D)decreases the number of workers until the value of marginal product of labour of the last worker hired equals $8.00. E)increases the number of workers until the value of marginal product of labour of the last worker hired equals $8.00.

Suppose a profit-maximizing firm hires labour in a competitive labour market.If the value of marginal product of labour of the last worker hired is less than the wage rate,the firm A)increases the wage rate. B)decreases the wage rate. C)increases the quantity of labour it hires. D)decreases the quantity of labour it hires. E)shuts down.

A decrease in the price of a firm's output A)decreases the supply of labour. B)increases the supply of labour. C)increases the value of marginal product of labour. D)decreases the quantity of labour demanded. E)decreases the value of marginal product of labour.

Use the table below to answer the following questions. Table 17.2.2 Wendy owns an apple orchard and she employs students to pick the apples.In an hour they can pick the following amounts: -Refer to Table 17.2.2.If the price of apples is $0.50 per kilogram,the value of marginal product of the 5th student is A)$0.50 an hour. B)$72.50 an hour. C)$14.50 an hour. D)$12.50 an hour. E)$10 an hour.

Use the table below to answer the following questions. Table 17.2.2 Wendy owns an apple orchard and she employs students to pick the apples.In an hour they can pick the following amounts: -Consider Table 17.2.2.If the price of apples is $0.50 per kilogram,and the wage rate for apple pickers is $7.50 per hour,then the number of pickers that Wendy will hire is A)1. B)3. C)5. D)7. E)8.

A firm's value of marginal product of labour curve is also its A)marginal cost curve of labour. B)demand curve for labour. C)supply curve of labour. D)supply curve of output. E)marginal product curve.

The demand curve for labour will shift rightward as a result of A)a decrease in the price of the firm's output. B)an increase in the wage rate. C)a decrease in the price of a substitute factor of production. D)an increase in the price of a substitute factor of production. E)a decrease in the wage rate.

The demand curve for labour will shift leftward as a result of A)a decrease in the wage rate. B)an increase in the wage rate. C)a decrease in the price of a substitute factor of production. D)an increase in the price of a substitute factor of production. E)an increase in the price of the firm's output.

The demand for a factor of production is A)a determined demand. B)a derived demand. C)a kinked demand. D)an insatiable demand. E)a desperate demand.

The demand for labour is a derived demand because it is derived from A)the demand for the output the labour produces. B)the supply of labour. C)union pressure. D)natural law. E)years of accumulated capital and technological advances.

The demand for the services of labour ________ a derived demand and the demand for the services of land ________ a derived demand. A)is not;is not B)is not;is C)is;is not D)is;is E)sometimes is and sometimes is not;sometimes is and sometimes is not

The value of marginal product is A)the value to the firm of hiring one more unit of a factor of production. B)the maximum marginal product of the factor of production. C)calculated as total revenue divided by the total quantity employed. D)calculated as marginal product divided by marginal benefit. E)calculated as marginal product divided by the price of a unit of output .

A firm can sell its output for $40 per unit.When the firm increases its labour force from 4 workers to 5 workers,its output increases from 15 to 17 units.The value of marginal product of the 5th worker is A)$80. B)$40. C)$600. D)$680. E)$136.

Use the table below to answer the following questions. Table 17.2.3 -Emperor Spring Rolls produces spring rolls.The market for spring rolls is perfectly competitive,and the price of a spring roll is $3.50.The labour market is competitive,and the wage rate is $28 a day.Table 17.2.3 shows the workers' total product schedule.To maximize its profit,Emperor hires ________ workers a day. A)2 B)3 C)4 D)5 E)6

Use the table below to answer the following questions. Table 17.2.3 -Emperor Spring Rolls produces spring rolls.The market for spring rolls is perfectly competitive,and the price of a spring roll is $3.50.The labour market is competitive,and the wage rate is $28 a day.Table 17.2.3 shows the workers' total product schedule.To maximize its profit,Emperor produces ________ spring rolls a day. A)32 B)44 C)54 D)62 E)66

Use the information below to answer the following questions. Fact 17.2.1 Wanda's is a fish store that hires students to pack the fish.The fish market is competitive.Originally the price is 50¢ a kilogram.The market for packers is competitive and their market wage rate is $7.50 an hour.Then the market price of fish falls to 33.33¢ a kilogram but the wage rate of fish packers remains at $7.50 an hour. -Refer to Fact 17.2.1.As a result,the students' marginal product ________ and the students' value of marginal product ________. A)decreases;does not change B)does not change;does not change C)decreases;decreases D)does not change;decreases E)decreases;increases

Use the information below to answer the following questions. Fact 17.2.1 Wanda's is a fish store that hires students to pack the fish.The fish market is competitive.Originally the price is 50¢ a kilogram.The market for packers is competitive and their market wage rate is $7.50 an hour.Then the market price of fish falls to 33.33¢ a kilogram but the wage rate of fish packers remains at $7.50 an hour. -Refer to Fact 17.2.1.As a result, A)Wanda's demand for labour curve shifts rightward and the firm hires more students. B)the value of marginal product decreases,but Wanda's still continues to hire the same number of students. C)Wanda's demand for labour curve shifts leftward and the firm hires fewer students. D)marginal product increases so Wanda's hires more students. E)Wanda's demand for labour curve shifts leftward and the students' supply of labour curve shifts leftward,and the firm hires fewer students.

If the supply of labour decreases,which of the following events will occur? A)The wage rate will decrease and firms will increase the number of workers to the point at which the value of marginal product equals the new wage rate. B)The wage rate will decrease and firms will decrease the number of workers to the point at which the value of marginal product equals the new wage rate. C)The wage rate will increase and firms will decrease the number of workers to the point at which the value of marginal product equals the new wage rate. D)The wage rate will increase and firms will decrease the number of workers to the point at which the value of marginal product is greater than the new wage rate. E)The wage rate will increase and firms will decrease the number of workers to the point at which the value of marginal product is less than the new wage rate.

The reservation wage rate is the wage rate A)below which the labourer will be willing to work. B)above which the worker would be willing to retire. C)at which the firm would find it profitable to hire labour. D)that makes it necessary for the firm to shut down rather than pay this wage to labour. E)above which the worker would be willing to supply labour to the market.

The substitution effect on labour supply refers to the degree to which A)the firm can substitute other factors of production for labour. B)buyers can substitute other products for the products that are made by organized labour. C)a firm is willing to substitute nonlabour income for wages. D)workers prefer to substitute nonmonetary payments for money wages. E)a worker is willing to substitute work for leisure.

The income effect on labour supply refers to A)the fact that at higher wages the worker earns more income. B)the fact that as the wage rate increases and income increases,labourers demand more of all normal goods,including leisure activities. C)the increase in the income of firms that is necessary to pay higher wages. D)the fact that as workers become more productive,they earn more income. E)the fact that as the wage rate increases and income increases,labourers demand more of all normal goods,including labour.

The labour supply curve may eventually become "backward bending" at high wages because A)the substitution effect on the demand β₁ leisure dominates the income effect. B)the income effect on the demand β₁ leisure dominates the substitution effect. C)firms demand added productivity from the workers as the wage reaches very high levels. D)at high wage rates,the reservation wage rate rises. E)people get tired of working so many hours and refuse to increase their labour supply.

If the wage rate increases,the substitution effect gives a household the incentive to A)raise its reservation wage. B)increase leisure and decrease work. C)increase work and decrease leisure. D)increase both work and leisure. E)decrease both work and leisure.

If the wage rate decreases,the substitution effect gives a household the incentive to A)raise its reservation wage. B)increase leisure and decrease work. C)increase work and decrease work. D)increase both work and leisure. E)decrease both work and leisure.

If the wage rate increases,the income effect gives a household the incentive to A)raise its reservation wage. B)increase leisure and decrease work. C)increase work and decrease leisure. D)increase both work and leisure. E)decrease both work and leisure.

If the wage rate decreases,the income effect gives a household the incentive to A)raise its reservation wage. B)increase leisure and decrease work. C)increase work and decrease leisure. D)increase both work and leisure. E)decrease both work and leisure.

As the wage rate rises,a household will have a backward-bending supply of labour curve if A)the income effect reinforces the substitution effect. B)the wage rate rises above the reservation wage. C)the substitution effect dominates the income effect. D)the income effect dominates the substitution effect. E)leisure is an inferior good.

If the desire for leisure increased,the wage rate would A)rise and employment would fall. B)rise and employment would rise. C)fall and employment would fall. D)fall and employment would rise. E)fall and employment would rise or fall.

The income effect of a higher wage is A)the increased income workers must be paid to be willing to work more. B)the increased prices of consumer goods that result from increased worker incomes. C)the increased demand for leisure that results from increased worker incomes. D)the increased workers' purchasing power that results from increased worker incomes. E)the desire for workers to purchase more normal goods and fewer inferior goods as income rises.

A labour union is A)an illegal conspiracy of workers formed to strike against employers. B)a legal organization of workers with a goal to dominate employers. C)an organized group of workers that aims to increase the wage rate and influence other job conditions. D)an organized group of crime syndicates. E)a group of workers,working in the same industry,but in different jobs.

A union is formed to restrict labour supply in a previously perfectly competitive labour market.If the union succeeds in raising the wage rate,everything else remaining the same, A)employment will fall. B)employment will rise. C)employment will not change. D)firms will lock out the union workers. E)the demand β₁ union labour will increase.

For a monopsonist facing an upward-sloping supply curve of labour,the marginal cost of labour curve A)intersects the value of marginal product curve of labour at the equilibrium wage rate. B)is below and parallel to the supply of labour curve. C)is identical to the supply of labour curve. D)is above and parallel to the supply of labour curve. E)is above the supply curve of labour.

Unions try to raise the demand for their labour by A)raising wages. B)encouraging imports. C)supporting less restrictive immigration laws. D)sponsoring training for union members. E)lobbying against minimum wage laws.

A constraint on union effectiveness is A)the downward-sloping labour demand curve. B)the minimum wage law. C)the Fair Labour Standards Practices Act. D)increasing export competitiveness. E)the competition of other unions.

To increase the demand for union labour,unions do all of the following except A)support increases in the minimum wage. B)support increases in import restrictions. C)encourage people to buy goods made by unionized workers. D)support an increase in the supply of foreign workers. E)support training schemes and apprenticeship programs.

Which of the following would unions be least likely to support? A)an increase in the minimum wage B)immigration restrictions C)increasing the value of marginal product of their workers D)increasing demand for the goods their workers produce E)reducing barriers to imports

Unions support increasing the minimum wage rate because A)they want to encourage employment among the poor. B)they believe in a living wage rate. C)this will decrease the supply of labour in their industry. D)this will increase the demand for union labour in their industry. E)all of society gains from a higher minimum wage rate.

When compared to a monopsony labour market with the same value of marginal product curve and labour supply curve,a perfectly competitive labour market will pay a A)lower wage and employ fewer workers. B)lower wage and employ more workers. C)higher wage and employ fewer workers. D)higher wage and employ more workers. E)higher wage and employ the same amount of workers.

A monopsony exists when there is A)a single buyer in a market. B)a single seller in a market. C)a small number of large buyers in a market. D)a small number of large sellers in a market. E)an agreement among sellers in a market to set prices.

If a strike or lockout occurs in a bilateral monopoly situation,it is usually because A)the demand for labour is relatively inelastic. B)the demand for labour is relatively elastic. C)the supply of labour is relatively inelastic. D)the supply of labour is relatively elastic. E)one party has misjudged the costs each party can inflict on the other.

Which one of the following would unions be most likely to support? A)increased barriers to imports B)eased immigration restrictions C)a decrease in the minimum wage D)the elimination of tariffs on imports E)decreasing the marginal product of its workers

Use the figure below to answer the following questions. Figure 17.3.1 -Refer to Figure 17.3.1.This figure shows the value of marginal product of labour curve,the labour supply curve,and the marginal cost of labour curve.If this labour market is competitive,the wage rate is A)$12.50 an hour. B)$11 an hour. C)$12 an hour. D)$13 an hour. E)greater than $13 an hour.

Use the figure below to answer the following questions. Figure 17.3.1 -Refer to Figure 17.3.1.This figure shows the value of marginal product of labour curve,the labour supply curve,and the marginal cost of labour curve.If this labour market is competitive,the quantity of labour employed is A)zero hours. B)50 hours. C)75 hours. D)100 hours. E)greater than 100 hours.

Use the figure below to answer the following questions. Figure 17.3.1 -Refer to Figure 17.3.1.This figure shows the value of marginal product of labour curve,the labour supply curve,and the marginal cost of labour curve.If this labour market is controlled by a monopsony,the wage rate is A)$13 an hour. B)$12.50 an hour. C)$12 an hour. D)$11 an hour. E)zero,because the market would shut down.

Use the figure below to answer the following questions. Figure 17.3.1 -Refer to Figure 17.3.1.This figure shows the value of marginal product of labour curve,the labour supply curve,and the marginal cost of labour curve.If this labour market is controlled by a monopsony,then the monopsonist hires A)zero hours of labour. B)50 hours of labour. C)75 hours of labour. D)100 hours of labour. E)more than 100 hours of labour.

Use the figure below to answer the following questions. Figure 17.3.1 -Refer to Figure 17.3.1.This figure shows the value of marginal product of labour curve,the labour supply curve,and the marginal cost of labour curve.If a union and the monopsonist in Figure 17.3.1 are equally strong,the outcome will be an hourly wage A)of $13. B)between $11 and $12. C)between $11 and $13. D)between $12 and $13. E)of $12.

Use the figure below to answer the following questions. Figure 17.3.1 -Refer to Figure 17.3.1.This figure shows the value of marginal product of labour curve,the labour supply curve,and the marginal cost of labour curve.Suppose the government passes a minimum wage law that prohibits anyone from hiring labour at less than $12.50 per hour.The monopsonist will hire A)50 hours of labour. B)75 hours of labour. C)62.5 hours of labour. D)100 hours of labour. E)125 hours of labour.

Use the figure below to answer the following questions. Figure 17.3.1 -Refer to Figure 17.3.1.This figure shows the value of marginal product of labour curve,the labour supply curve,and the marginal cost of labour curve.If this labour market is controlled by a monopsony,then the monopsonist A)pays a wage rate that is greater than the value of marginal product of labour. B)pays a wage rate exactly equal to the value of marginal product of labour. C)pays a wage rate that is less than the value of marginal product of labour. D)employs more labour hours per week than a competitive labour market. E)pays a wage equal to the marginal cost of labour.

Use the figure below to answer the following questions. Figure 17.3.2 -Refer to Figure 17.3.2.This figure illustrates a monopsonist in the labour market.The profit-maximizing wage rate is ________ and the quantity of labour hired is ________. A)$11 per hour;800 hours B)$11 per hour;400 hours C)$14 per hour;600 hours D)$17 per hour;400 hours E)$14 per hour;400 hours.

Use the figure below to answer the following questions. Figure 17.3.2 -Refer to Figure 17.3.2.If the labour market illustrated in this figure is competitive,the equilibrium wage rate is ________ and the quantity of labour hired is ________. A)$11 per hour;800 hours B)$11 per hour;400 hours C)$14 per hour;600 hours D)$17 per hour;400 hours E)$14 per hour;800 hours.

Use the figure below to answer the following questions. Figure 17.3.2 -Refer to Figure 17.3.2.Suppose this labour market is initially in a monopsony situation and then the government introduces a minimum wage of $16 per hour.Choose the correct statement. A)The wage rate does not change,but employment decreases. B)The wage rate does not change,and employment stays the same. C)The wage rate rises to $16 per hour,and employment increases. D)The wage rate rises to $16 per hour,and employment decreases. E)The wage rate rises to $16 per hour,and employment does not change.

If a union forms to face the monopsonist in Figure 17.3.2,the situation is one of A)binding arbitration. B)derived demand. C)duopoly. D)collusive oligopoly. E)bilateral monopoly.

If a union and the monopsonist in Figure 17.3.2 agree to bargaining,the outcome is an hourly wage rate A)of $14. B)between $11 and $14. C)between $11 and $17. D)between $14 and $17. E)of $17.

Use the figure below to answer the following questions. Figure 17.3.3 -Refer to Figure 17.3.3.For the monopsonist employer illustrated in this figure,the profit-maximizing wage rate is ________ and the quantity of labour hired is ________. A)$18 per hour;300 hours B)$16 per hour;350 hours C)$16 per hour;500 hours D)$14 per hour;400 hours E)$12 per hour;300 hours

Use the figure below to answer the following questions. Figure 17.3.3 -Refer to Figure 17.3.3.Suppose the government passes a minimum wage law that prohibits anyone from hiring labour at less than $16 per hour.The monopsonist will hire A)250 hours of labour. B)300 hours of labour. C)350 hours of labour. D)400 hours of labour. E)450 hours of labour.

During the past year,Teddy had a part-time job at which he is willing to work 30 hours each week.During Teddy's annual review,his boss grants him an 8 percent increase in his wage.As a result of the wage increase,Teddy is now willing to work 25 hours each week.Teddy's opportunity cost of ________ has risen and for Teddy the substitution effect of the wage hike is ________ the income effect. A)leisure;less than B)leisure;more than C)labour;less than D)labour;more than E)leisure;equal to

Table 17.3.1 -Table 17.3.1 gives information about the labour market in Lantis,a community in which the labour market is perfectly competitive.The equilibrium wage rate is ________ an hour and the quantity of labour employed is ________ hours per day. A)$25;600 B)$25;200 C)$15;400 D)$5;200 E)$5;600

Table 17.3.1 -Table 17.3.1 gives information about the labour market in Lantis,a community in which the labour market is perfectly competitive.If the price of the good that Lantis produces increases and the value of marginal product of labour changes by $10 an hour,the equilibrium wage rate is ________ an hour and the quantity of labour employed is ________. A)$17.50;450 hours B)$10;600 hours C)$20;500 hours D)$15;300 hours E)$20;300 hours

If the value of marginal product of capital decreases as more capital is employed,then the A)supply curve of capital is upward sloping. B)supply curve of capital is downward sloping. C)demand curve for capital is horizontal. D)demand curve for capital is downward sloping. E)demand curve for capital is upward sloping.

If the market for a nonrenewable natural resource is currently in equilibrium,the price of the resource A)is determined only by the value of marginal product of the resource. B)is expected to rise at a rate equal to the interest rate. C)is expected to fall at a rate equal to the interest rate. D)will actually rise at a rate equal to the interest rate. E)will actually fall at a rate equal to the interest rate.

Equilibrium occurs in the market for oil when the A)price of the oil equals the interest rate. B)increase in the price of oil equals the expected increase in the interest rate. C)expected increase in the price of oil over time is equal to the interest rate. D)stock of oil is eventually depleted. E)price of oil today equals the expected future price.

The Hotelling Principle states that A)hotels tend to be built next to major highways. B)equilibrium in natural resource markets occurs when the expected increase in the price of the resource over time is equal to the interest rate. C)the resource will be depleted at a rate equal to the rate of interest. D)natural resources should be depleted only for the production of goods that would help maintain environmental quality. E)we should conserve nonrenewable natural resources.

Which of the following is a nonrenewable natural resource? A)coal B)land C)water D)trees E)rain

The supply of each particular block of land is A)relatively elastic. B)relatively inelastic. C)perfectly elastic. D)perfectly inelastic. E)either elastic or inelastic depending on the productivity of the land.

The supply of a nonrenewable natural resource is determined by all of the following factors except A)the value of marginal product. B)the known reserves of the natural resource. C)the scale of current production facilities. D)the expected future price. E)the marginal cost of extraction.

The Hotelling Principle is the idea that the price of a ________ is expected to rise at a rate equal to the ________. A)nonrenewable natural resource;inflation rate B)unit of capital;interest rate C)nonrenewable natural resource;interest rate D)unit of capital;inflation rate E)nonrenewable natural resource;percentage increase in demand

If the price of a natural resource is expected to rise at a rate that exceeds the interest rate,demand ________ and supply ________. A)decreases;increases B)increases;decreases C)increases;increases D)decreases;decreases E)increases;does not change

The Internet is ________ natural resource.Power generated by wind turbines is ________ natural resource. A)not a;a nonrenewable B)a renewable;a renewable C)a renewable;a nonrenewable D)not a;a renewable E)not a;not a

Coal in an Alberta coal mine is a ________ natural resource.Algonquin Park is ________ natural resource. A)nonrenewable;a nonrenewable B)renewable;a renewable C)nonrenewable;a renewable D)renewable;a nonrenewable E)nonrenewable;not a

All of the following statements are correct except A)the supply of capital is derived from the value of marginal product of capital. B)the lower the rental rate of capital,other things remaining the same,the greater is the quantity of capital demanded. C)the higher the rental rate,other things remaining the same,the greater is the quantity of capital supplied. D)profit-maximizing firms hire the quantity of capital services that makes the value of marginal product of capital equal to the rental rate of capital. E)if the present value of the future rental payments of an item of capital equipment is less than the cost of buying the capital,the firm will rent or lease the equipment.

Choose the correct statement. A)The quantity of land demanded cannot be changed by people's decisions. B)The supply of each particular block of land is perfectly inelastic. C)The lower the rental rate,other things remaining the same,the smaller is the quantity of land demanded. D)Profit-maximizing firms rent the quantity of land at which the value of marginal product of land is equal to the quantity of land demanded. E)The supply of land is based on the value of marginal product of land.

The value of marginal product of oil is the ________ influence on demand.The greater the quantity of oil used,the ________ is the value of marginal product of oil. A)speculative;greater B)fundamental;greater C)fundamental;smaller D)speculative;smaller E)none of the above

All of the following statements are correct except A)if the price of oil is expected to rise at a rate equal to the interest rate,demand increases and supply increases. B)the interest rate is the opportunity cost of holding an oil inventory. C)if the price of oil is expected to rise at a rate that exceeds the interest rate,demand increases and supply decreases. D)according to the Hotelling Principle,the price of a nonrenewable natural resource is expected to rise at a rate equal to the interest rate. E)the marginal cost of extraction of oil is the fundamental determinant of supply.

Use the information below to answer the following questions. Fact 17.4.1 Water is a natural resource that is plentiful in Canada but not plentiful in Arizona and southern California.Suppose Canadians start to export bulk water to Arizona and southern California. -Refer to Fact 17.4.1.The price of bulk water in Arizona and southern California will ________.Water is a ________ natural resource. A)fall;renewable B)rise;nonrenewable C)rise;renewable D)fall;nonrenewable E)not change;nonrenewable

Use the information below to answer the following questions. Fact 17.4.1 Water is a natural resource that is plentiful in Canada but not plentiful in Arizona and southern California.Suppose Canadians start to export bulk water to Arizona and southern California. -Refer to Fact 17.4.1.The Hotelling Principle ________ apply to Canada's water because the Hotelling Principle ________. A)does;applies to renewable resources and water is a renewable resource B)does;only applies when the interest rate is falling C)does not;applies to nonrenewable resources but water is a renewable resource D)does not;only applies when the interest rate is rising E)does;applies when interest rates are relatively low

Suppose the interest rate is 5 percent per year.What is the present value of the $210 that will be received two years from today? A)$210 B)$190.48 C)$231.53 D)$200 E)$42

The present value of the $50 that will be received next year is $40.What is the interest rate? A)10 percent B)8 percent C)20 percent D)50 percent E)25 percent

What will be the value in one year of $25 invested today at an annual interest rate of 5 percent? A)$25 B)$26.25 C)$27.50 D)$30 E)$23.81

The ________ of a future amount of money is the amount that,if invested today,will grow to be as large as that future amount when the interest it earns is taken into account. A)current value B)future value C)present value D)market value E)profit value

What is the most an investor would be willing to pay for a stock that will pay $210 next year and nothing before or after? A)$200 regardless of the interest rate. B)$200 if the interest rate is 5 percent per year. C)$190.91 if the interest rate is 10 percent per year. D)B and C. E)None of the above.

The present value of a future payment of money will be higher the A)higher the interest rate or the further in the future the payment. B)lower the interest rate or the further in the future the payment. C)higher the interest rate or the nearer the date of the future payment. D)lower the interest rate or the nearer the date of the future payment. E)lower the interest rate,independent of the date of the future payment.

The present value of a future payment of money will be lower the A)higher the interest rate or the further in the future the payment. B)lower the interest rate or the further in the future the payment. C)higher the interest rate or the nearer the date of the future payment. D)lower the interest rate or the nearer the date of the future payment. E)lower the interest rate,independent of the date of the future payment.

If the annual rate of interest is 10 percent per year,what is the present value of $100 received one year from now? A)$90.00 B)$90.91 C)$95.45 D)$100.00 E)$110.00

If the interest rate is 10 percent per year,the present value of $100 in two years is A)$80.00. B)$82.64. C)$90.91. D)$120.00. E)$121.00.

If the present value of $500 to be received in one year is $463,the interest rate is A)5 percent per year. B)8 percent per year. C)10 percent per year. D)20.8 percent per year. E)37 percent per year.

If the rate of interest is 15 percent per year,the present value of the $200 to be received in two years is A)$170.00. B)$185.00. C)$173.91. D)$264.50. E)$151.23.

If the present value of the $1,000 to be received in one year is $800,the interest rate is A)25 percent per year. B)8 percent per year. C)10 percent per year. D)12 percent per year. E)125 percent per year.

If the present value of $100 received one year from now is $80,what is the annual interest rate? A)8 percent B)10 percent C)20 percent D)25 percent E)50 percent

The present value of a future sum of money is the amount that,if invested today,will grow A)as large as that future sum,given the interest rate. B)as large as that future sum,if the time period is equal to one year. C)as large as that future sum,less taxes payable. D)as large as that future sum,if the rate of interest is zero. E)at a constant rate forever.

Given that r is the rate of interest,the present value of a dollar to be received a year from today equals A)$1 × r. B)$1 ÷ (1 - r). C)$1 × (1 + r). D)$1 ÷ r. E)$1 ÷ (1 + r).

Use the information below to answer the following questions. Fact 17.5.1 The Burning Belly Taco Stand is considering buying some new special ovens.Each oven will cost $1,000,and will last for 2 years before it wears out.The ovens will be used to make the Taco Stands famous "Burning Ring of Fire" tacos,and will generate a value of marginal product of $600 for the first oven,$570 for the second oven,and $530 for the third oven.(Assume all revenues are earned at the end of the year. ) -Refer to Fact 17.5.1.If the rate of interest is 5 percent,how many ovens will the Burning Belly Taco Stand buy? A)zero B)1 C)2 D)3 E)as many as it can afford

Use the information below to answer the following questions. Fact 17.5.1 The Burning Belly Taco Stand is considering buying some new special ovens.Each oven will cost $1,000,and will last for 2 years before it wears out.The ovens will be used to make the Taco Stands famous "Burning Ring of Fire" tacos,and will generate a value of marginal product of $600 for the first oven,$570 for the second oven,and $530 for the third oven.(Assume all revenues are earned at the end of the year. ) -Consider Fact 17.5.1.If the rate of interest is 10 percent,how many ovens will the Burning Belly Taco Stand buy? A)zero B)1 C)2 D)3 E)as many as it can afford