Reference no: EM131228763
1. A decrease in the demand for the final product will cause the firms short run labor demand curve to:
a. decrease
b. remain the same
c. change in an unpredictable manner
d. increase
2. The short run labor demand curve is downward sloping for a firm operating in a perfectly competitive output and labor market as a result of:
a. the law a diminishing returns.
b. the decrease in marginal revenue that occurs when output rises
c. both of the above are correct
d. none of the above are correct
3. Improvements in the productive technology that rise the marginal product of labor will cause a perfectly competitive firms short run labor demand curve to:
a. shift to the left
b. change in an unpredictable manner
c. become flatter
d. shift to the right
4. For a firm operating in a perfectly competitive labor market, but an imperfectly competitive output market, the short run labor demand curve is downward sloping due to:
a. the law of diminishing returns
b. the decrease in marginal revenue that occurs when output rises.
c. both of the above are correct
d. none of the above are correct
5. As the number of the firms in a labor market rises, the market labor demand will:
a. decrease
b. change in an unpredictable manner.
c. increase
d. remain the same
6. For a firm operating in a perfectly competitive output and labor markets, an optimal level of labor is used in the short run when:
a. MRP = W
b. MRP = MFC
c. P x MP = W
d. all of the above are correct
7. In a perfectly competitive labor market,
a. MFC > W
b. MFC < W
c. MFC = W
d. none of the above are correct
8. For a monopoly firm operating in a monopsony labor market, an optimal quantity of labor is hired in the short run when:
a. MRP = W
b. MRP= MFC
c. P x MP= W
d. all of the above are correct
9. In a monopsony labor market, MFC:
a. exceeds the wage.
b. may be greater than, less than, or equal to the wage.
c. is less than the wage.
d. equals the wage.
10. The introduction of an effective minimum wage law in a monopsony market will cause the optimal level of employment to:
a. decrease
b. change in a manner that cannot be determined without additional information
c. remain unchanged
d. increase
11. In a perfectly competitive labor market, the introduction of an effective minimum wage with complete coverage will cause the level of employment to:
a. decrease
b. change in a manner that cannot be determined without additional information.
c. remain unchanged
d. increase
12. In a long run equilibrium, a firm operating in a perfectly competitive output and labor markets will select an optimal combination of inputs at a level of input use at which:
a. the marginal product of each input equals the factor price.
b..the marginal product of any input equals the marginal product of any other input.
c. the marginal product per dollar spent on each input is equalized for all inputs.
d. none of the above is correct
13. As a result of an increase in the wage, each isoquant curve will:
a. shift to the left
b. remain unchanged
c. shift to the right
d. become flatter
e. become steeper
14. The law of diminishing MRTS implies that an isoquant curve will be:
a. concave
b convex
c. vertical
d. horizontal
15. At each point on an isoquant, the MRTS of labor for capital equals:
a. the negative ratio of the MP of labor to the MP of capital.
b. the additional amount of capital needed to replace a unit of labor, holding output constant (and assuming productive efficency)
c. the negative of a slope of a tangent line to the isoquant
d. all of the above are correct
e. none of the above are correct
16. When drawing isocost curves with k on the vertical axis and L on the horizontal axis, an increase in the wage will cause the absolute value of the slope of each isocost curve to:
a. increase
b. decrease
c. remain the same
d. change in an unpredictable manner
e. none of the above are correct
17. In the long run, a firm minimizes cost by selecting a mix of inputs at which the absolute value of the slope of the isocost curve:
a. is as small as possible
b. is as large as possible
c. is less than the MRTS
d. equals the MRTS
e. none of the above are correct
18. As a result of the substitution effect resulting from a wage increase:
a. L falls and K rises
b both L and K rise
c. both L and K fall
d. L rises and K falls
19. As a result of the scale effect resulting form a wage increase:
a. L falls and K rises
b. both L and K rise
c. L rises and K falls
d. both L and K fall
20. Adult and teenage workers are gross substitutes if :
a. the substitution effect is smaller than the scale effect.
b. the substitution effect is larger than the scale effect.
c. the substitution effect results in a decline in the use of both adult and teenage workers.
21. If adult workers and teenagers are gross complements, the elimination of the minimum wage for teenage workers would cause the demand for adult workers to:
a. increase
b. decrease
c. remain the same
d. none of the above is correct
22. As a result of the scale effect resulting from an increase in the price of capital:
a. both L and K rise
b L falls and K rises
c. both L and K decline.
d. L rises and K falls
23. As a result of the scale effect resulting from a reduction in the wage
a. output rises
b. output remains unchanged
c. this cannot be determined without additional information
d. output declines
24. As a result of the substitution effect resulting from an increase in the price of capital :
a. L falls and K rises
b. both L and K rise
c. L rises and K falls
d. both L and K decline