Microeconomics Unit 5: Factor Markets Quiz

What is the payment for the factor of production known as land?

• Rent

• Wages

• Profit

• Interest

What does the production function show?

• The total revenue a business generates from selling its products

• The total costs incurred by a business in the production process

• The relationship between the quantity of labor a business hires and the amount of output those workers can produce

• The relationship between the quantity of capital and the amount of output

What is the Marginal Revenue Product?

• The marginal revenue times the marginal product of those workers

• The additional revenue generated from selling one more unit of a product

• The additional cost incurred by producing one more unit of a product

• The additional revenue generated by hiring one more worker

What phase follows increasing marginal product according to the law of diminishing marginal returns?

• Negative marginal product

• No change in marginal product

• Decreasing marginal product

• Constant marginal product

What determines a firm's demand for labor?

• The marginal cost of labor

• The total revenue product of labor

• The marginal revenue product of those workers

• The average product of labor

What happens to the number of workers hired when the wage falls?

• It increases

• It fluctuates unpredictably

• It remains the same

• It decreases

What can cause the labor demand curve to shift?

• Changes in the interest rates only

• Changes in government policy only

• Changes in the product price, product demand, and productivity of workers

• Changes in the weather conditions

What is a monopsony?

• A market with many sellers

• A market with only one seller

• A market with only one buyer

• A market with many buyers

In a perfectly competitive factor market, firms are considered as what?

• Monopsonists

• Monopolists

• Wage takers

• Price setters

How do you find the least cost combination of resources?

• By selecting the resource with the highest marginal product regardless of price

• By calculating the total revenue generated from each resource

• By adding the total cost of all resources and selecting the cheapest

• By dividing the marginal product of a resource by its price and comparing across resources