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- 1. Multiple Choice
The four principal classes of factors of production are
money, capital, land, and labor
money, capital, labor, and entrepreneurship
money, labor, land, and entrepreneurship
land, labor, capital, and entrepreneurship
land, labor, entrepreneurship, and money
- 2. Multiple Choice
Because it results from the demand for automobiles, the demand for automobile workers is a/an
derived demand
shift in supply
elastic demand
inelastic demand
- 3. Multiple Choice
For a perfectly competitive firm in both the product market and the factor market, the demand curve for labor slopes downward due to
increasing marginal returns
economies of scale
diseconomies of scale
diminishing marginal returns
- 4. Multiple Choice
If marginal product is positive and falling as the firm hires more workers, then
total product is rising at a decreasing rate
total product is falling at a decreasing rate
average product must be falling
- 5. Multiple Choice
Which of the following would shift the demand curve for labor to the right?
a decrease in the wage rate
an increase in the wage rate
an increase in labor productivity
a decrease in the final price of the product produced
- 6. Multiple Choice
Suppose a firm produces coffee mugs in a perfectly competitive output market. Which of the following would shift the firm’s demand curve for labor to the left?
an increase in the demand for mugs
a decrease in the price of mugs
an increase in the price of mugs
an increase in the availability of physical capital per worker
- 7. Multiple Choice
The supply curve for labor may shift to the left due to
an increase in wealth
an increase in the wage rate due to the income effect
decreasing childcare costs
subsidy for additional education
- 8. Multiple Choice
According to marginal productivity theory, a factor of production will be paid based on the
increase in revenue generated by the last unit of the factor employed in the market
increase in output generated by the last unit of the factor employed in the market
average revenue generated by the factor of production employed in the market
average output generated by the factor of production employed in the market
- 9. Multiple Choice
If the price of a firm's product falls, the firm's demand for labor curve
shifts leftward.
does not shift and there is no movement along it.
does not shift and there is movement along it.
shifts rightward.
- 10. Multiple Choice
If the cost of input increases to create a product, this will impact the labor market by
shifting supply to the right
shifting supply to the left
shifting demand to the right
shifting demand to the left
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