If the _______ of labor is increased, ceteris paribus, eventually the _______ will ________ .

Question 12.5 pts

The amount by which an additional unit of a factor increases the firm's total revenue during a period is:

marginal revenue product.

average product.

marginal factor cost.

marginal physical product.

Question 22.5 pts

In perfect competition, marginal revenue product is equal to:

the product price.

marginal product.

marginal product multiplied by the product price.

the ratio of marginal product to the product price.

Question 32.5 pts

If the _______ of labor is increased, ceteris paribus, eventually the _______ will ________ .

price; supply of labor; increase

quantity; marginal product of labor; fall

quantity; marginal product of labor; rise

quantity; marginal revenue product of labor , rise

Question 42.5 pts

Marginal Revenue Product and Demand

Units of Variable Factor

Total Products

0

0

1

20

2

50

3

90

4

120

5

140

6

150

7

150

8

140

If the product price is $2 per unit, the marginal revenue product for the fifth unit of the variable input is:

$0.

$20.

$40.

$60.

Question 52.5 pts

A change in the quantity demanded of chocolate, a factor of production used to produce chocolate-covered peanuts, will occur if:

the price of chocolate increases.

the price of chocolate-covered peanuts increases.

the demand for chocolate-covered peanuts decreases.

a new, improved chocolate-covered-peanut-making machine is purchased by candy companies.

Question 62.5 pts

Which of the following statements is true?

The market demand curve for labor is found by adding the supply curves for labor of individual firms.

A firm's demand for labor is the upward-sloping portion of the MRP curve for labor.

The market demand for labor will change as a result of a change in the use of a complementary factor or a substitute factor.

The market demand curve for labor is vertical at the profit-maximizing wage.

Question 72.5 pts

If people expect to _______ and also expect that benefits from social security may not be forthcoming, the supply curve for labor will shift to the _______ .

live longer; left

live shorter lives; right

live longer; right

die soon; right

Question 82.5 pts

In general, a firm hires the quantity of a factor of production up to the point at which marginal factor cost equals marginal revenue product.

True

False

Question 92.5 pts

Suppose that the labor market for clerical workers in a major city includes 1 employer and 100,000 workers. The model that best fits this situation is:

monopoly.

bilateral monopoly.

perfect competition.

monopsony.

Question 102.5 pts

In a monopsony model of a labor market, as more labor is hired, the marginal factor cost of labor:

rises.

is constant.

is zero.

decreases.

Question 112.5 pts

Suppose that a monopsonist increases the number of workers hired from 10 to 11. If the market wage increases from $20 per worker to $21 per worker, the marginal factor cost for the eleventh worker is:

$20.

$21.

$31.

$231.

Question 122.5 pts

A firm buying factors of production in a perfectly competitive factor market will hire labor where:

the MR and MC curves cross.

MRP = MC.

MRP = MFC.

MRP = MP of labor times the price of output.

Question 132.5 pts

Under perfect competition in the product market, the price of a product will be ________ MC, and under perfect competition in the factor market, the price of a factor will be _______ MRP.

greater than; less than

less than; greater than

equal to; equal to

greater than; greater than

Question 142.5 pts

The monopsony model predicts that athletes facing monopsony employers will receive _______ that are ________ than their _______ .

wages; less; MRPs

MRPs; greater; MFCs

wages; greater; MRPs

MFCs; greater; MRPs

Question 152.5 pts

A firm that has monopoly power in the supply of a factor makes choices in same manner as any other monopoly firm by selling where _______ and selecting a price determined by the _______ curve.

MR = P; demand

MR = MC; supply

MR = MC; demand

MRP = MFC; supply

Question 162.5 pts

Barriers to entry into a craft union are likely to shift the:

labor demand curve to the right.

labor demand curve to the left.

labor supply curve to the right.

labor supply curve to the left.

Question 172.5 pts

An example of a government purchase is:

a Social Security payment to the elderly.

a Social Security payment to the disabled.

public school education.

expenditure on an unemployment compensation payment.

Question 182.5 pts

Since the 1960s, total government expenditures generally have:

been less than total government receipts.

been equal to total government receipts.

increased more slowly than government purchases.

increased more rapidly than government purchases.

Question 192.5 pts

Government activities include(s):

responding to market failure.

redistribution of incomes.

activities that encourage or discourage the consumption of some goods and services.

all of the above.

Question 202.5 pts

The tendency of people to avoid paying for a good's benefits when the benefits can be obtained free is the:

free-cost problem.

free-rider problem.

free-goods problem.

free-market problem.

Question 212.5 pts

If the marginal benefit received from a good is greater than the marginal opportunity cost of production, then:

society's well-being can be improved if production increases.

society's well-being can be improved if production decreases.

society's well-being cannot be improved by changing production.

the market is producing too much of the good.

Question 222.5 pts

The largest _______ transfer payment in the United States is _______.

non-means-tested; Medicaid

non-means-tested; Social Security payments to retired persons

means-tested; farmers aid

means-tested; Social Security payments to retired persons

Question 232.5 pts

Evidence suggests that, taken collectively, federal taxes in the U.S. economy are:

extremely regressive.

mildly regressive.

proportional.

mildly progressive.

Question 242.5 pts

A decision not to vote because the marginal costs outweigh the marginal benefits is called:

the "there is nothing so frightful as ignorance in action" effect.

the individual welfare criterion.

rational abstention.

the logical voting effect.

Question 252.5 pts

Attempts by the federal government to prevent the exercise of monopoly power in the United States are called _______ policy.

stabilization

antitrust

fiscal

government

Question 262.5 pts

Situations where whether or not a particular business practice is illegal depends on the circumstances surrounding the action are said to be subject to:

the rule of reason.

an unfair constraint.

monopolistic behavior.

oligopolistic behavior.

Question 272.5 pts

The consolidation of firms that compete in the same industry or product line is a(n):

vertical merger.

conglomerate merger.

monopoly merger.

horizontal merger.

Question 282.5 pts

Regulatory agencies attempt to:

limit the degree of competition between firms.

influence business decisions that affect consumer and worker safety.

guide businesses into the most profitable channels.

establish tariffs and quotas against foreign firms.

Question 292.5 pts

The tendency for a regulatory agency to promote the interests of the industry it regulates, rather than the public's interests, is explained by the:

theory of imperfect competition.

public interest theory of regulation.

capture theory of regulation.

market failure of externalities.

Question 302.5 pts

Consumer protection laws are based on:

the concept that consumers do not always know what is good for them.

the notion that consumers will benefit from being protected at no cost.

the belief that consumers have sufficient information to make decisions.

the idea that competitive markets always provide safe products.

Question 312.5 pts

Economists generally agree that if the ______ of consumer protection ______ the ________, the regulations should be _______.

costs; exceed; benefits; continued

benefits; exceed; costs; discontinued

costs; are less than; benefits; continued.

benefits; equal; costs; discontinued

Question 322.5 pts

According to the text authors, the more ________ airline industry today is most likely ________ the ________ industry that existed in the 1970s, and it is certainly ________ .

regulated; less efficient than; less regulated; less safe

competitive; an improvement over; more regulated; cheaper.

consolidated; less competitive; regulated; more expensive to fly now.

efficient; less competitive than; regulated; more expensive

Question 332.5 pts

The absolute value of the slope of the production possibilities curve at any point:

gives the price of the good on the vertical axis that must be given up to attain an additional unit of the good on the horizontal axis.

is found by dividing the horizontal change by a vertical change.

gives the quantity of the good on the vertical axis that must be given up to produce an additional unit of the good on the horizontal axis.

gives the price of the good on the horizontal axis relative to the price of the good on the vertical axis.

Question 342.5 pts

If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, the opportunity cost of producing 100 bicycles is _______ tractor(s).

1

4

25

100

Question 352.5 pts

Countries that engage in trade will tend to specialize in goods in which they have a(n)

_______ and will _______ those goods.

comparative advantage; import

absolute advantage; export

comparative advantage; export

economic profit; import

Question 362.5 pts

Which of the following statements is true?

If the opportunity costs differ between two countries, there is no opportunity for mutually advantageous trade.

International trade leads countries to specialize in the production of those goods for which they have an absolute, rather than a comparative, advantage.

Free international trade can increase the availability of all goods and services in the countries that participate in trade.

The potential costs of free trade generally outweigh the benefits.

Question 372.5 pts

Suppose that Brazil and Peru exchange coffee and leather. Brazil can produce both coffee and leather more efficiently than Peru, but Brazil can produce coffee more efficiently than leather. Comparative advantage states that:

Brazil should produce both coffee and leather and not trade.

Brazil should produce coffee, Peru should produce leather, and both countries should trade.

Brazil should produce leather, Peru should produce coffee, and both countries should trade.

Peru should produce both coffee and leather and not trade.

Question 382.5 pts

A tariff imposed on U.S. imports into Japan tends to:

penalize U.S. producers and benefit Japanese producers.

benefit U.S. producers and penalize Japanese producers.

penalize both U.S. producers and Japanese producers.

benefit both U.S. producers and Japanese producers.

Question 392.5 pts

In the importing country, the most likely effects of tariffs and/or import quotas is to _______ prices and ________ consumption of the protected goods.

raise; reduce

raise; raise

raise; not affect

reduce; reduce

Question 402.5 pts

Protectionist policies:

restrict the importation of foreign goods and services.

shift the supply curves for the protected goods and services to the right in the country imposing the restriction.

generally result in increased benefits in the long run in all countries.

are no longer advocated by powerful interests.