16-101
A.
is constant at all levels of production.
212.
Units of Resource
0
1
2
3
4
5
Total Product
0
6
11
15
18
20
Total Revenue ($)
0
36
55
60
54
40
Refer to the table. How many units of a resource would the profit-maximizing firm use if the
price of this resource was $19.00?
A. 1
213.
If the price of a resource is greater than its marginal revenue product, the firm should
A.
charge a higher price for its product.
16-102
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written consent of McGraw-Hill Education.
C.
increase the units of the resource used in order to increase profits.
D.
decrease the units of the resource used in order to increase profits.
214.
In a given labor market, the demand for labor by employers will shift to the right or left
with changes in all of the following, except
A. the demand for the products produced by the employers.
215.
Schedule A
Schedule B
Number of
Workers
Total
Product
Number of
Workers
Total
Product
1
30
1
35
2
40
2
47
3
48
3
57
4
54
4
65
5
59
5
71
6
63
6
76
A firm operating in competitive input and output markets purchases new technology, which
shifts the total product schedule from A to B, as shown in the data in the table.
At the
market wage rate of $30 and product price of $5, this firm will
A.
hire the same number of laborers in both situations.
216.
A firm’s demand curve for labor
A. is its marginal product curve.
217.
Which of the following increases in labor demand is due to a change in the product
demand?
A. Access to computers increases the productivity of mail order businesses, thus increasing
the demand for their workers.
16-104
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written consent of McGraw-Hill Education.
Blooms: Remember
Di ff icu lt y:
01 Easy
Learning Objective: 16–03 List the factors that increase or decrease resource demand.
Test Bank: II
To p i c:
Determinants of Resource Demand
218.
Which of the following increases in labor demand is due to a change in the price of a
related resource?
A.
Software sales rise, thus increasing the demand for software developers.
219.
Which of the following decreases in labor demand is due to a change in the price of a
related resource?
A.
A decline in the demand for computers in Europe reduces the demand for workers in the
domestic computer industry.
220.
Which of the following decreases in labor demand is due to a change in product
demand?
A. An increase in the price of paper increases the cost of making books, thus decreasing the
demand for bookbinders.
221.
Use the graph to answer the question about the labor resource market faced by producers of
good X. What will shift D1 to D2?
A.
a decrease in the price of labor
16-106
222.
Use the graph to answer the question about the labor resource market faced by producers of
good X. What will shift D1 to D2?
A.
an increase in the price of a substitute input (if output effect > substitution effect)
223.
Use the graph to answer the question about the labor resource market faced by producers of
good X. What will shift D2 to D1?
D.
a decrease in the price of a substitute input (if the output effect > substitution effect)
224.
Use the graph to answer the question about the labor resource market faced by producers of
good X. What will shift D2 to D1?
A.
A decrease in the price of a substitute input (if the output effect > substitution effect)
225.
As the baby boomers in America grow old, the demand for health care workers
increases. This would be an example of which determinant of labor demand?
A. an increase in labor productivity
16-109
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written consent of McGraw-Hill Education.
Blooms: Remember
D i ff ic ul ty :
01 Easy
Learning Objective: 16–03 List the factors that increase or decrease resource demand.
Test Bank: II
Topic:
Determinants of Resource Demand
226.
If the price of a good increases, then in the market for the type of labor needed to
produce this good,
A.
employment will decrease.
227.
A decrease in the price of a productive resource will result in each of the following
except a(n)
A.
downward shift in the average-cost curves for all products that use the resource.
228.
A technological improvement that causes an increase in the marginal product of a
resource will
A. decrease the demand for the resource.
16-110
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written consent of McGraw-Hill Education.
D.
increase the marginal resource cost.
229.
The demand for a resource will increase if the
A.
price of the resource decreases.
230.
In a competitive resource market, a decrease in the demand for a productive resource,
ceteris paribus, will cause all of the following except a(n)
A. decrease in the price of the resource.
231.
If two inputs are complementary and employed in fixed proportions, an increase in the
price of one input will
16-111
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written consent of McGraw-Hill Education.
A.
decrease the demand for the other input.
B.
increase the demand for the other input.
C.
increase the quantity demanded for the other input.
D.
have no effect on the demand for the other input.
232.
If the price of labor falls relative to the price of capital, and as a result the quantity of
capital employed decreases, then it can be concluded that
D.
labor cannot be easily substituted for capital.
233.
Suppose capital is readily substitutable for labor and that the price of capital falls. We
can conclude that the
D.
demand for labor will necessarily increase.
234.
The demand curve for labor will most likely increase when the price of a
A. complementary input increases, provided the substitution effect is greater than the output
effect.
235.
Other things being equal, how would the market for tablet computers be affected by a
large increase in productivity in the tablet-computer industry?
A. a decrease in price and a leftward movement along the supply curve
236.
Two resource inputs, capital and labor, are complementary and used in fixed
proportions. An increase in the price of capital will
A. increase the demand for labor.
16-113
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Di ff icu lt y:
01 Easy
Learning Objective: 16–03 List the factors that increase or decrease resource demand.
Test Bank: II
To p i c:
Determinants of Resource Demand
237.
In percentage terms, which of the following occupations is expected by the U.S. Bureau
of Labor Statistics to be the fastest growing from 2014 to 2024?
D.
postal service sorters and processors
238.
Which type of occupation is expected by the U.S. Bureau of Labor Statistics to be the
fastest growing from 2014 to 2024 ?
A. manufacturing
239.
The rising demand for health-care industry workers is due to the following factors,
except
A.
aging of the U.S. population.
16-114
240.
From 2014 to 2024, the U.S. Bureau of Labor Statistics expects that there will be a fall
in demand for
D.
occupational therapy assistants.
241.
The demand for sewing machine operators is expected by the U.S. Bureau of Labor
Statistics to decline sharply from 2014 to 2024, largely due to
D.
weakening demand for machine-sewn products.
242.
The U.S. Bureau of Labor Statistics expects demand for labor in the textile and apparel
sector to decline, largely because of
A.
decreasing demand for textiles and apparel.
243.
The more inelastic the demand for a resource, the
D.
greater the productivity of the resource.
244.
Other things being equal, a firm’s demand for labor is likely to be more elastic than its
demand for capital if
A. labor costs are a smaller proportion of total costs than capital costs.
245.
A firm is both hiring labor and selling output in purely competitive markets and is
maximizing profits. It is currently operating in the elastic range of its MRP curve. If the
wage rate increases, its total spending on wages at the new equilibrium will
A. be larger.
246.
Which would result in a decrease in the elasticity of demand for a particular resource?
A.
a decrease in the rate at which the marginal product of that resource declines
247.
The demand for labor would most likely become less inelastic as a result of
A.
a decrease in the elasticity of the demand for the product that the labor produces.
16-117
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written consent of McGraw-Hill Education.
Learning Objective: 16–04 Discuss the determinants of elasticity of resource demand.
Test Bank: II
Topic:
Elasticity of Resource Demand
248.
What will the elasticity of resource demand be if unit wages rise by 8 percent and the
number of employed workers falls by 5 percent?
D. 4.00
249.
If a factor of production has many close substitutes, we would expect that its price
elasticity of demand would be
D. less than one, but greater than zero.
250.
Which will not be a determinant of the price elasticity of demand for an input?
D.
the total cost of an input as a proportion of the total cost of producing units of output
16-118
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written consent of McGraw-Hill Education.
A cc e s s i b i l i t y :
Keyboard Navigation
Blooms: Understand
Difficulty:
02 Medium
Learning Objective: 16–04 Discuss the determinants of elasticity of resource demand.
Test Bank: II
Topic:
Elasticity of Resource Demand
251.
A union representative observed that if the union members‘ wages were increased by
some proportion, the workers would eventually suffer a greater than proportional
decline in
employment. This statement could best be explained if
A. the new wages are to take effect immediately.
252.
A firm is observed using 15 units of input X when the price of X is $2. If the price of X
increases to $4, the firm uses only 6 units of it. What is the price elasticity of
demand for
input X? (Use the simple formula for percentage change: [(new# − old#)/old#] × 100%.)
A. 1/2 = 0.5
253.
Other things being equal, if a once-competitive firm attains a high degree of monopoly
power in its product market, then its resource demand will
A.
become perfectly inelastic.
254.
A change in a factor’s price will have a greater effect on the quantity of the factor
demanded the
A.
smaller the change in the factor‘s price.
255.
Other things being equal, the elasticity of demand for labor will be greater the
A.
smaller the proportion of total costs accountable for by labor costs.
256.
Other things being the same, if the demand for labor is inelastic,
A. decreases in wage rates will result in greater payrolls.
257.
If labor costs are 60 percent of production costs, then a 15 percent increase in wage
rates would increase production costs by
A.
60 percent.
258.
In which of the cases given below will the elasticity of demand for workers who
produce yo–yos be most inelastic? The price elasticity of demand for yo–yos is
A.
5, and labor’s share of total costs is 20 percent.