Question 1

Exhibit 11-10
 
-In Exhibit 11-10, the marginal revenue product of the fourth unit of the variable resource is

Accepted Answer

A)   $14
B)   $24
C)   $168
D)   $84
E)   $756

Question 2

Gooey Flakes is the only ready-to-eat cereal that has chocolate syrup injected into each flake. The machine that injects the syrup into the flakes can do nothing else. Which of the following is true?

Accepted Answer

A)   All of the machine's earnings are economic rent.
B)   All of the machine's earnings are opportunity cost.
C)   The supply curve for this machine is horizontal.
D)   The demand curve for this machine is horizontal.
E)   The demand curve for this machine is vertical.

Question 3

The smaller the quantity and quality of complementary resources used in production,

Accepted Answer

A)   the greater the demand for labor
B)   the greater the marginal resource cost of labor
C)   the lower the marginal resource cost of labor
D)   the lower the marginal productivity of labor
E)   the greater the marginal productivity of labor

Question 4

If a firm is experiencing diminishing marginal returns,

Accepted Answer

A)   total output decreases as all resources are increased
B)   total output decreases as all resources are decreased
C)   total output decreases as one variable resource is increased, other things constant
D)   additional increments of output diminish as one variable resource is increased, other things constant
E)   additional increments of output diminish as all variable resources are increased

Question 5

The demand for labor is likely to increase when

Accepted Answer

A)   the supply of the good it produces falls
B)   the demand for the good it produces rises
C)   the supply of the good it produces rises
D)   the demand for the good it produces falls
E)   the real wage rate rises

Question 6

The division of a resource's earnings between economic rent and opportunity cost depends on the resource owner's

Accepted Answer

A)   elasticity of labor supply
B)   price elasticity of labor demand
C)   income elasticity of labor demand
D)   cross-price elasticity of demand
E)   marginal revenue product

Question 7

Marginal revenue product is obtained by multiplying the price of the product by the marginal resource cost.

Accepted Answer

A) True 
 B)False

Question 8

Other things equal, similar resources in alternative uses will be paid

Accepted Answer

A)   different amounts based on their different uses
B)   different amounts based on the alternative uses
C)   different amounts if resources are mobile
D)   similar amounts if resources are not mobile
E)   similar amounts if resources are mobile

Question 9

Which of the following would not explain why academic economists earn less than corporate economists?

Accepted Answer

A)   more freedom in daily schedules
B)   less restrictions on attire
C)   less freedom in choice of research topics
D)   less control over their public statements
E)   None of the answers is correct.

Question 10

Marginal resource cost is defined as the

Accepted Answer

A)   total cost of producing a unit
B)   total cost of adding one more unit of a resource, other things constant
C)   cost of adding one more unit of a resource, other things constant
D)   marginal cost divided by the quantity of a resource
E)   price of labor

Question 11

If the marginal revenue product of the fifth worker is $15, the price of the last unit of output produced is $5, and the firm sells as a price searcher, then the marginal product of the fifth worker is

Accepted Answer

A)   3 units of output
B)   45 units of output
C)   fewer than 3 units of output
D)   greater than 3 units of output
E)   greater than 75 units of output

Question 12

A game show host who gave up his job as a teacher brags about his salary, saying "the rest is pure gravy." Here, "the rest" refers to

Accepted Answer

A)   opportunity cost
B)   implicit cost
C)   explicit cost
D)   the height of his labor supply curve
E)   economic rent

Question 13

A profit-maximizing firm will hire extra units of a resource when

Accepted Answer

A)   marginal resource cost exceeds marginal revenue product
B)   marginal resource cost is equal to marginal revenue product
C)   marginal resource cost is less than marginal revenue product
D)   temporary resource price differentials exceed the marginal resource cost
E)   the average resource cost and marginal resource cost curves are equal

Question 14

Exhibit 11-5 
-In Exhibit 11-5, opportunity cost in equilibrium equals

Accepted Answer

A)   $0
B)   $120
C)   $1,000
D)   $300
E)   $1,300

Question 15

Exhibit 11-2 
-In Exhibit 11-2, opportunity cost at equilibrium is represented by area

Accepted Answer

A)   a
B)   b
C)   c
D)   a + b
E)   b + c

Question 16

Exhibit 11-9
 
-In Exhibit 11-9, marginal revenue product begins to decline with the second worker hired.

Accepted Answer

A) True 
 B)False

Question 17

In the resource market, firms demand resources in order to

Accepted Answer

A)   maximize profit
B)   maximize total revenue
C)   maximize marginal revenue
D)   maximize utility
E)   minimize cost

Question 18

The price paid to a resource in totally fixed supply is called

Accepted Answer

A)   economic rent
B)   economic profit
C)   wages
D)   interest
E)   opportunity cost

Question 19

Along the supply curve of lifeguards at local public pools,

Accepted Answer

A)   the wage paid to lifeguards is held constant
B)   the number of lifeguards is held constant
C)   the wage paid to lifeguards at private clubs is held constant
D)   the demand for lifeguards is assumed constant
E)   the admission price to these public pools rises as the wage rate for lifeguards increases

Question 20

Exhibit 11-7
 
-In Exhibit 11-7, diminishing returns first becomes evident with the addition of the __________ machine.

Accepted Answer

A)   first
B)   second
C)   third
D)   fourth
E)   fifth

Exam 11: Resource Markets

Exhibit 11-9 -In Exhibit 11-9, marginal revenue product begins to decline with the second worker hired.

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Exhibit 11-2 -In Exhibit 11-2, opportunity cost at equilibrium is represented by area

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Other things equal, similar resources in alternative uses will be paid

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If a firm is experiencing diminishing marginal returns,

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Which of the following would not explain why academic economists earn less than corporate economists?

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Exhibit 11-7 -In Exhibit 11-7, diminishing returns first becomes evident with the addition of the __________ machine.

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The division of a resource's earnings between economic rent and opportunity cost depends on the resource owner's

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A game show host who gave up his job as a teacher brags about his salary, saying "the rest is pure gravy." Here, "the rest" refers to

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Exhibit 11-10 -In Exhibit 11-10, the marginal revenue product of the fourth unit of the variable resource is

Correct AnswerverifiedShow Answer

Marginal resource cost is defined as the

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The demand for labor is likely to increase when

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If the marginal revenue product of the fifth worker is $15, the price of the last unit of output produced is $5, and the firm sells as a price searcher, then the marginal product of the fifth worker is

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The price paid to a resource in totally fixed supply is called

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Along the supply curve of lifeguards at local public pools,

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Marginal revenue product is obtained by multiplying the price of the product by the marginal resource cost.

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In the resource market, firms demand resources in order to

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Gooey Flakes is the only ready-to-eat cereal that has chocolate syrup injected into each flake. The machine that injects the syrup into the flakes can do nothing else. Which of the following is true?

Correct AnswerverifiedShow Answer

The smaller the quantity and quality of complementary resources used in production,

Correct AnswerverifiedShow Answer

Exhibit 11-5 -In Exhibit 11-5, opportunity cost in equilibrium equals

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A profit-maximizing firm will hire extra units of a resource when

Correct AnswerverifiedShow Answer

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