Ch. 12 Practice MC 1.When financial experts say that the demand also for labor is a obtained demand, they intend that it is: A. dependent on government expenditures for public goods and services. B. regarded the demand for the product or service labor is developing. C. based on the desire of businesses to manipulate labor by paying below equilibrium wage prices. D. based upon the presumption that employees are trying to maximize their money incomes.2.The demand also for airline pilots outcomes from the demand also for air travel. This fact is an instance of: A. resource substitutability. B. rising marginal resource expense. C. elasticity of resource demand. D. the acquired demand for labor.3.The pucount competitive employer of reresource A will maximize the profits from A by equating the: A. price of A via the MRP of A. B. marginal efficiency of A with the MRC of A. C. marginal productivity of A with the price of A. D. price of A via the MRC of A.4.The labor demand also curve of a pudepend competitive seller: A. slopes downward because the elasticity of demand also is constantly much less than unity. B. slopes downward because of diminishing marginal performance. C. is perfectly elastic at the going wage price. D. slopes downward bereason of diminishing marginal energy.5.Assume labor is the only variable input and that a second input of labor increases complete output from 72 to 78 devices. If the product sells for $6 per unit in a pudepend competitive sector, the MRP of this added worker is: A. $6. B. $12. C. $36. D. $72.6.A firm will certainly discover it profitable to hire workers approximately the point at which their: A. marginal reresource price amounts to their wage price. B. wage price amounts to product price. C. MP is equal to their MRP. D. marginal reresource price is equal to their MRP.Answer the question on the basis of the following information: Harry owns a barber shop and also charges $6 per hairreduced. By hiring one barber at $10 per hour the shop have the right to provide 24 haircuts per 8-hour day. By hiring a 2nd barber at the very same wage rate the shop deserve to now provide a complete of 42 haircuts per day. 7.Refer to the over indevelopment. Harry should: A. hire the second barber bereason he will add $28 to earnings. B. hire the second barber bereason he will include $108 to earnings. C. not hire the second barber bereason he is much less fertile than the initially barber. D. not hire the second barber because he will certainly diminish revenues.Answer the question on the basis of the adhering to indevelopment for Manfred"s Shoe Shine Parlor. Assume Manfred hires labor, its just variable input, under pucount competitive conditions. Shoe shines are alsomarketed competitively. 8.Refer to the over information. What is the marginal product of the sixth worker? A. 2 devices B. 3 units C. 4 devices D. 5 units9.Refer to the over data. If the wage price is $11 and also Manfred"s just solved input is capital, the full cost of which is $30, then what will be his financial profit? A. $62 B. $42 C. $28 D. $3210. Assume that a restaurant is hiring labor in an amount such that the MRC of the last worker is $16 and her MRP is $12. On the basis of this information we can say that: A. profits will certainly be enhanced by hiring extra employees. B. profits will be raised by hiring fewer workers. C. marginal revenue product must exceed average revenue product. D. the restaurant is maximizing profits. Answer the question on the basis of the indevelopment offered in the complying with table:11. Refer to the above data. If the firm is hiring employees under purely competitive conditions at a wage rate of $22, it will employ: A. 1 worker. B. 2 employees. C. 3 employees. D. 4 employees. 12. Refer to the above data. If the firm is hiring workers under pudepend competitive conditions at a wage price of $10, it will employ: A. 2 employees. B. 3 employees. C. 4 employees. D. 5 employees.13. Marginal reresource price is: A. the boost in total reresource cost associated with the production of an additional unit of output. B. the rise in total reresource price associated via the hire of another unit of the resource. C. total reresource cost divided by the variety of inputs employed. D. the adjust in full revenue linked through the employment of one more unit of the resource. Answer the question on the basis of the data consisted of in the following table. Assume that the firm ishiring labor in a pudepend competitive industry. 14. The above information reveal that: A. the firm is selling its product in a purely competitive industry. B. the firm is offering its product in an imperfectly competitive industry. C. tright here is no level of output at which this firm deserve to run at a profit. D. the regulation of diminishing retransforms is not applicable to this firm. 15. The MRP curve is the resource demand also curve for: A. neither the pucount competitive nor the imperfectly competitive seller. B. the imperfectly competitive seller, yet not the pucount competitive seller. C. the pucount competitive seller, but not the imperfectly competitive seller. D. both the pucount competitive and also imperfectly competitive seller. 16. If a firm is selling in an imperfectly competitive product sector, then: A. average product will be less than marginal product for any type of number of employees hired. B. the marginal commodities of successive workers need to be marketed at lower prices. C. the marginal assets of successive workers can be offered at greater prices. D. the marginal products of successive employees can be marketed at a continuous price. 17. For a firm marketing its product in a purely competitive industry, the marginal revenue product of labor deserve to be discovered by: A. including marginal product to total product as one more unit of labor is employed. B. adding marginal revenue to complete product as an additional unit of labor is employed. C. multiplying marginal product by product price. D. dividing marginal product by product price.18. Refer to the over graph. Other points equal, a rise in the price of a complementary reresource would reason a: A. relocate from a to b on D1. B. shift from D2 to D3. C. change from D3 to D2. D. move from b to a on D1.19. Refer to the over graph. Other points equal, an increase in the price of substitute reresource would reason a: A. transition from D2 to D3 assuming the substitution effect exceeds the output effect. B. relocate from a to b on D1. C. move from b to a on D1. D. shift from D3 to D2 assuming the substitution effect exceeds the output result. 20. A decrease in the price of reresource A will: A. boost the demand also for complementary resource B. B. transition the demand curve for A to the left. C. shift the demand also curve for A to the appropriate. D. alleviate the demand also for complementary reresource B. 21. Assume the price of funding drops family member to the price of labor and also, as a result, the demand for labor increases. Therefore: A. resources is exceptionally extremely substitutable for labor. B. the output result is better than the substitution effect. C. the income effect is better than the output effect. D. the substitution effect is higher than the output effect. 22. Which of the complying with will not transition the demand curve for labor? A. the usage of a larger stock of capital via the labor pressure B. a change in the wage rate C. a rise in the price of the product which labor is helping to develop D. the fostering of a more effective technique of combining labor and resources in the production process 23. The substitution impact suggests that a profit-seeking firm will use: A. even more of an input whose price has fallen and much less of other inputs in producing a given output. B. even more of all inputs if production expenses loss. C. even more of those inputs whose marginal performance is the biggest. D. much less of an input whose price has actually fallen and even more of various other inputs in producing a given output. 24. Assume the price of capital doubles and, as an outcome, firms make no adjust in the family member amounts of capital and labor they employ. This means that: A. labor is not conveniently substitutable for resources. B. the legislation of diminishing returns is not applicable. C. the firms are producing an inferior good. D. the demand also for capital is extremely price elastic. 25. A change in an input price will certainly alter both production prices and the profit-maximizing output. Thus a decrease in the price of resources will mitigate production costs, increase the profit-maximizing output, and thereby boost the demand for labor. This explains the: A. output impact. B. substitution result. C. principle of obtained demand also. D. regulation of diminishing retransforms. 26. Suppose tbelow is a decrease in the demand for the product labor is developing. Furthermore, the price of resources, which is complementary to labor, boosts. Thus the demand also for labor: A. will increase. B. will decrease. C. may either increase or decrease. D. will certainly not change.27. Which of the complying with occupations is one of the ten projected a lot of swiftly decreasing U.S. occupations in terms of percentage increases? A. clinical assistants B. veterinarians C. college professors D. postal organization employees 28. When the elasticity coefficient for resource demand is greater than one, reresource demand also is: A. inelastic. B. elastic. C. unit-elastic. D. perfectly inelastic.29. Refer to the over data. For the $16 to $14 variety of wage rates, labor demand also is: A. perfectly elastic. B. elastic. C. perfectly inelastic. D. inelastic. 30. Other points equal, if wage prices rise by 20 percent, the biggest decrease in employment will happen once labor costs are a: A. large propercent of complete prices and product demand also is elastic. B. small proportion of total costs and product demand also is elastic. C. big proportion of full prices and also product demand also is inelastic. D. little propercent of complete prices and also product demand is inelastic. 31. Suppose that the labor cost-total cost ratio in industry A is 82 percent while in sector B it is 21 percent. Other points equal, labor demand will be: A. more elastic in industry A than in B. B. relatively inelastic in both industry A and B. C. even more elastic in sector B than in A. D. reasonably elastic in both industry A and also B. 32. Assuming a competitive resource market, a firm is hiring sources in the profit-maximizing quantities when the: A. firm"s full outlay on resources is minimized. B. marginal revenue product of each reresource is equal to its price. C. price of each reresource employed is the very same. D. marginal revenue product of the last unit of each resource hired is the same. 33. A firm is hiring sources X, Y, and Z in the profit-maximizing quantities when: A. MRPx/Px equates to MRPy/Py equates to MRPz/Pz equates to 1. B. the amount of the MRPs of the three sources is at a minimum. C. the marginal revenue productivity of all 3 resources is the very same. D. the marginal revenue product of the last dollar invested on each of the three sources is the very same.Answer the question on the basis of the complying with marginal product data for resources a and also b. The output of these independent resources sells in a purely competitive sector at $1 per unit.34. Refer to the over information. Assume currently that the prices of a and b are $15 and $20 respectively. To maximize profits what combination of a and also b must the employer hire? A. 3 of a and also 5 of b B. 5 of a and also 7 of b C. 7 of a and also 7 of b D. 6 of a and also 2 of b 35. The equation MPL/PL = MPC/PC: A. designates the MR = MC level of output. B. assumes imperfect competition in the hiring of labor and also funding. C. is a adequate condition for the maximization of revenues. D. is a necessary, but not sufficient, problem for the maximization of revenues. 36. Suppose a firm is hiring sources l and m under purely competitive conditions to create product Y that sells for $2 in a purely competitive sector. The prices of l and m are $10 and $4 respectively. In equilibrium the MPs of l and also m, respectively, are: A. 1 and also 1. B. 2 and also 5. C. 10 and also 4. D. 5 and also 2. Answer the question on the basis of the adhering to data:37. Refer to the above data. This firm is selling its product in: A. an imperfectly competitive market at prices that decline as sales boost. B. a pucount competitive industry at $3 per unit. C. a purely competitive sector at $2 per unit. D. an imperfectly competitive industry at $3 per unit. 38. Refer to the over information. If the prices of labor and funding are $9 and $15 respectively, the profitmaximizing firm will hire: A. 5 units of labor and also 3 of capital. B. 5 devices of labor and also 2 of resources. C. 4 systems of labor and also 4 of resources. D. 3 systems of labor and also 4 of capital.39. Refer to the above information. If the prices of labor and funding are $9 and also $15 respectively, at the profitmaximizing level of output the firm"s total revenue will be: A. $114. B. $180. C. $129. D. $192. 40. Refer to the above information. If the prices of labor and also funding are $9 and also $15 respectively, and labor and resources are the just inputs, the firm"s financial revenues will certainly be: A. $102. B. $82. C. $67. D. $28. 41. The profit-maximizing and also the least-cost combination of inputs are: A. the outcome of unrelated decisions. B. always similar. C. such that the minimization of expenses constantly results in profit maximization. D. such that the maximization of revenues always requires the least-price combicountry of inputs. Answer the question on the basis of the complying with information: Suppose a firm hires both labor (L) and also capital (C) under purely competitive problems. The price of labor is PL and also that of funding is PC. The marginal product of labor is MPL and that of capital is MPC. The firm sells its product competitively at a price of PX. 42. Refer to the above indevelopment. In competitive labor industries, the marginal price of a secondary unit of labor: A. is equal to PL × MPL. B. is equal to MPL/PL. C. is equal to PL. D. cannot be determined from the information provided.43. Refer to the over diagram. If a firm produces output Q1 at a unit expense of b, then the: A. firm is not fulfilling the least-expense ascendancy in employing sources. B. firm may or might not be maximizing earnings. C. marginal product per dollar"s worth of each reresource employed is not the exact same. D. firm has actually achieved minimum reliable scale. 44. The marginal productivity theory of income distribution says that: A. government must subsidize the many abundant employees with a system of carry payments. B. each individual have to receive revenue based upon his contribution to total output. C.reresource owners must obtain income based on the principle of "from each according to his capacity, to each according to his wants." D. reresource owners must receive income based upon their requirements.45. It will be profitable for a firm to hire extra units of any resource as much as the point at which its MRP is equal to its MRC. True False 46. The demand for a source relies on its efficiency and also the industry worth of the product it is developing. True False 47. If two sources are complementary, a decrease in the price of one will reduce the demand also for the other. True False 48. The demand for labor is a acquired demand whereas the demand for capital is not. True False 49. The MRP of labor curve is the firm"s labor demand curve. True False 50. Elasticity of reresource demand is measured by splitting "percentage readjust in resource price" by "percent readjust in reresource amount." True FalseCh. 12 Practice MC Key 1. B 2. D 3. A 4. B 5. C 6. D 7. A 8. B 9. D 10. B 11. C 12. D 13. B 14. B 15. D 16. B 17. C 18. C 19. A 20. A 21. B 22. B 23. A 24. A 25. A 26. B 27. D 28. B 29. B 30. A 31. A 32. B 33. A 34. A 35. D 36. D37. B 38. A 39. D 40. A 41. D 42. C 43. B 44. B 45. TRUE 46. TRUE 47. FALSE 48. FALSE 49. TRUE 50. FALSECh. 12 Practice MC Synopsis Classification AACSB: Analytic AACSB: Reflective Thinking Blooms: Level 1 Remember Blooms: Level 2 Understand also Blooms: Level 3 Apply Blooms: Level 4 Analyze Difficulty: 1 Easy Difficulty: 2 Medium Difficulty: 3 Hard Learning Objective: 12-01 Exordinary the meaning of reresource pricing. Learning Objective: 1202 Convey how the marginal revenue efficiency of a resource relates to a firms demand for that reresource. Learning Objective: 12-03 List the determinants that rise or decrease resource demand. Learning Objective: 12-04 Discuss the determinants of elasticity of resource demand also.
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Learning Objective: 12-05 Determine how a competitive firm selects its optimal combicountry of resources. McConnell - Chapter 12 Status: New Topic: Determinants of reresource demand Topic: Elasticity of reresource demand Topic: Marginal performance theory of income circulation Topic: Marginal productivity concept of resource demand also Topic: Optimal combination of sources Type: Graph Type: Table# of Questions 25 25 8 21 8 13 8 29 13 1 13 11 5 20 60 1 11 5 1 21 12 3 9