WorksheetsUnit 5: Factor Markets
Total questions: 15
Worksheet time: 8mins
To maximize profits a firm will employ workers up to the point at which for the last worker employed:
a) the value of the marginal product is equal to the wage rate.
b) the value of the marginal product is equal to the price per unit of output.
c) the value of the marginal product is as high as possible.
d) marginal product is equal to the nominal wage rate.
Factor demand is called derived demand because it:
a) requires the use of other factors
b) depends on demand for the product that the factor produces
c) has a downward sloping demand curve
d) has a constant marginal factor cost
The amount by which an additional unit of a factor increases a firm's total_________during a period is the____________.
a) revenue, value of the marginal product
b) revenue, marginal factor cost
c) cost, value of marginal product
d) cost, marginal product
Which factor is associated with production at a university?
a) the faculty
b) lab concentrations to use in experiments
c) electricity
d) Scan tron sheet
1. The demand for factors of production is called a derived demand because it is:
A) derived from the demand for the outputs that are produced by the factors ofproduction.
B) derived from the available supply of factors, such as land, that can beoverexploited.
C) not easy to determine and must be derived by a technical (and often complicated)process.
D) derived on the basis of questions posed to residents during the census.
Which of the following statements is true?
A) If W < VMPL, the firm should hire more labor.
B) If W > VMPL, the firm should hire more labor.
C) If W = VMPL, the firm should hire more labor.
D) If W > 0, the firm should shut down.
Which of the following examples of a wage disparity is an example of compensating differentials?
A) Tiger Woods gets paid more than a college professor.
B) A window washer working in a suburban residential subdivision gets paid less than one who is washing windows on the outside of a skyscraper.
C) A nuclear scientist gets paid more than a janitor working in the same building.
D) On average, white men get paid more than women of all ethnicities.
If a firm hires labour such that W>VMPL, then profit:
a) is maximized
b) can be increased by hiring less labour
c) can be increased by hiring more labour
d) can be increased by decreasing the price of the output.
Which factor will NOT shift the labour supply curve?
a) a change in attitude toward work
b) changes in spouse income
c) changes in expectations about future wealth
d) a change in the wage rate
If the demand for orange juice increases, the derived demand for orange grove workers will decrease
True
False
For the Blue Jays baseball team, the value of the marginal product curve is the team's labour___________curve. This means that the marginal product curve has a ____________slope.
a) demand;positive
b) supply;positive
c) demand;negative
d) supply;negative
A firm is producing the allocatively efficient level of output if
Price is equal to average cost
Price is greater than marginal cost
price is equal to marginal cost
Price is less than average cost
Assuming a linear downward-sloping demand curve, as a monopoly firm sells additional units of output, its marginal revenue will
Increase continuously
Remain Constant
Increase than decrease
Decrease continuously
Compared with a perfectly competitive market,a single-price monopoly with the same market demand and cost curves will
Increase output and decrease price
Increase output and increase price
decrease output and decrease price
Decrease output and increase price
Most economists argue that a monopoly is inefficient because it
Produces too little output and sets a price above marginal cost
Creates unfair competition
Produces too much output and sets a price below marginal cost
Increases consumer choice
