17-121
258.
Units of Labor
Total Output Per Day
Price of Good
2
10
$10
3
14
9
4
19
8
5
23
7
6
27
6
7
31
5
A firm‘s labor input, total output of labor, and product price schedules are given in the table.
Labor is the only variable input. What is the marginal revenue product of the fifth worker?
A. $6
259.
Units of Labor
Total Output Per Day
Price of Good
2
10
$10
3
14
9
4
19
8
5
23
7
6
27
6
7
31
5
A firm‘s labor input, total output of labor, and product price schedules are given in the table.
Labor is the only variable input. How many workers will the profit-maximizing firm hire if the
wage rate is $8 per day?
260. A firm operating in a purely competitive labor market has the marginal revenue product
schedule shown in the table.
Workers
MRP
1
$24
2
22
3
20
4
18
5
16
6
14
7
12
If the wage rate decreases from $17 to $13, by how much will the firm expand employment?
A. 5 workers
261.
The graph shows a firm that buys its inputs and sells its output in competitive markets. If the
firm develops a new technology that increases labor productivity, the equilibrium level of
employment for this firm is expected to be
A. L0.
17-124
262.
Refer to the graph. Suppose that a competitive firm in long-run equilibrium along MRP2 faces a
market wage rate of W0. If the price of the firm’s product increases, other things remaining the
same, the effect of this change in price would be to
D. move along MRP2 from point B to point A.
263. A firm pays the same wage rate to all its workers. At present, 10 workers are employed at
$50 per day. Wages are subsequently raised to $55 per day in order to attract an extra worker.
Thus, the marginal labor cost per day is
A. $5.
17-125
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written consent of McGraw-Hill Education.
B. $10.
C. $55.
D. $105.
264. A profit-maximizing firm operates in purely competitive product and resource markets,
with the resource and production schedules shown in the table.
Workers
Total
Production
8
440
7
410
6
370
5
320
4
260
3
180
2
110
1
55
The product price is $10 per unit and the cost per worker is $540. How many workers will the
firm employ?
A. 4
17-126
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written consent of McGraw-Hill Education.
Test Bank: II
Topic:
A Purely Competitive Labor Market
265.
Refer to the graph. The producer illustrated
A. is a monopsonist, since MR = P for every unit of output sold.
17-127
266.
Refer to the graph. The MRC being horizontal means that the firm
D. has perfectly elastic labor demand.
267. A firm‘s resource input, total output of labor, and product price schedules are given in the
table. If labor is the only variable input, how much labor should the firm employ if the wage
rate is $15 per day?
Units of Labor
Total
Price of Good
Output/Day
($)
2
20
$10
3
30
9
4
38
8
5
46
7
6
54
6
7
62
5
A. 3 units
268. Given the table for a competitive firm that is maximizing profits, if the marginal revenue
product of the last worker hired is $150 and three workers are employed per day, the price of a
unit of output must be
Number of Workers
Employed Per Day
Total Firm Output Per
Day
1
0
2
5
3
20
4
35
5
38
A. $1,000.
17-129
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written consent of McGraw-Hill Education.
Blooms: Understand
Dif f i c u l t y :
02 Medium
Learning Objective: 17–02 Show how wage rates and employment levels are determined in
competitive labor markets.
Test Bank: II
Topic:
A Purely Competitive Labor Market
269. Suppose two workers can harvest $46 worth of apples per day and three workers can
harvest $60 worth. On the basis of this information, we can say that the
A. marginal product of each of the first two workers is 23.
270. The individual firm that hires labor under competitive conditions faces a labor supply
curve that
A. slopes downward to the right.
271. The marginal cost of a productive resource is equal to the price of the resource if a firm is
A. a price taker in the output market.
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written consent of McGraw-Hill Education.
B. a price taker in the resource market.
C. able to influence the price of the product by producing more or less of it.
D. able to influence the price of the factor by buying more or less of it.
272.
Refer to the total product curve shown in the graph, and assume a competitive labor market. If
the firm can sell widgets for $12, then what is the maximum amount it will pay the fourth
worker each day?
D. $732
273.
The graph represents the supply and demand for labor in a purely competitive market. The area
0abc represents
C. marginal revenue product of labor.
D. marginal labor cost.
17-132
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written consent of McGraw-Hill Education.
competitive labor markets.
Test Bank: II
Topic:
A Purely Competitive Labor Market
274.
The graph represents the supply and demand for labor in a purely competitive market. The price
of labor that an individual firm in this market would take as given is
D. higher than 0c.
275. The reason that the supply curve for labor in a purely competitive market slopes upward is
because
A. the wage rate paid to workers falls as more are hired.
276.
Individual Firm
Market Supply
Number of Units of Labor
MRP of Labor
Wage Rate
Quantity of Labor Supplied
1
$12
$12
1,350
2
11
11
1,200
3
10
10
1,050
4
9
9
900
5
8
8
750
6
7
7
600
7
6
8
5
Suppose a single firm has the marginal revenue product schedule for a particular type of labor
given in the left table. Assume there are 150 firms with the same marginal-revenue-product
schedules for this particular type of labor. What will be the equilibrium wage rate?
A. $7
17-134
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written consent of McGraw-Hill Education.
Learning Objective: 17–02 Show how wage rates and employment levels are determined in
competitive labor markets.
Test Bank: II
Topic:
A Purely Competitive Labor Market
277.
Individual Firm
Market Supply
Number of Units of Labor
MRP of Labor
Wage Rate
Quantity of Labor Supplied
1
$12
$12
1,350
2
11
11
1,200
3
10
10
1,050
4
9
9
900
5
8
8
750
6
7
7
600
7
6
8
5
Suppose a single firm has the marginal revenue product schedule for a particular type of labor
given in the left table. Assume there are 150 firms with the same marginal-revenue-product
schedules for this particular type of labor. How many workers will be hired at equilibrium?
A. 300
278.
Individual Firm
Market Supply
Number of Units of Labor
MRP of Labor
Wage Rate
Quantity of Labor Supplied
1
$12
$12
1,350
2
11
11
1,200
17-135
3
10
10
1,050
4
9
9
900
5
8
8
750
6
7
7
600
7
6
8
5
Suppose a single firm has the marginal revenue product schedule for a particular type of labor
given in the left table. Assume there are 150 firms with the same marginal-revenue-product
schedules for this particular type of labor. What will be the marginal labor cost and wage rate
for the individual firm?
A. $6
279.
Individual Firm
Market Supply
Number of Units of Labor
MRP of Labor
Wage Rate
Quantity of Labor Supplied
1
$12
$12
1,350
2
11
11
1,200
3
10
10
1,050
4
9
9
900
5
8
8
750
6
7
7
600
7
6
8
5
Suppose a single firm has the marginal revenue product schedule for a particular type of labor
given in the left table. Assume there are 150 firms with the same marginal-revenue-product
schedules for this particular type of labor. How would the imposition of a $9 minimum wage
rate change the total amount of labor hired in this market?
D. Employment would increase by 150 to 900 workers total.
280. A market where there is only a single buyer is called a(n)
A. monopoly.
281. In a certain labor market, workers are required to have a certain skill-set. There are many
workers who have the skill-set, but they can only find employment in one company. That one
company is called a
D. natural monopoly.
17-137
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A c c e s s i b i l i t y :
Keyboard Navigation
Blooms: Understand
Dif f i c u l t y :
02 Medium
Learning Objective: 17–03 Demonstrate how monopsony a market with a single employer can
reduce wages below competitive levels.
Test Bank: II
Topic:
Monopsony Model
282. Which of the following is characteristic of a labor market that is a monopsony?
A. The type of labor available is relatively mobile from one industry to another.
283. The labor market for teachers in a small, isolated community that has one school district
would be best described as a(n)
A. natural monopoly.
284. For a monopsonist in the labor market, the marginal resource cost of labor is
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written consent of McGraw-Hill Education.
B. less than the wage rate or price of labor.
C. equal to the wage rate or price of labor.
D. inversely related to the wage rate or price of labor.
285. Professional sports leagues, like the NFL and the NBA, are good examples of monopsony
because
A. they are dominant providers of sports entertainment.
286. The monopsonistic power of a firm in a labor market tends to be enhanced by
A. entry of new firms in that market.
17-139
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written consent of McGraw-Hill Education.
Topic:
Monopsony Model
287.
Workers
MRP
Wage
5
$12
$5
6
13
6
7
14
7
8
15
8
9
16
9
10
17
10
A firm faces the labor productivity and cost schedule in the table. What is the marginal resource
cost of the seventh worker?
A. $11
288.
Workers
MRP
Wage
5
$12
$5
6
13
6
7
14
7
8
15
8
9
16
9
10
17
10
A firm faces the labor productivity and cost schedule in the table. How many workers will this
profit-maximizing firm employ?
A. 6
289.
Workers
MRP
Wage
5
$12
$5
6
13
6
7
14
7
8
15
8
9
16
9
10
17
10
A firm faces the labor productivity and cost schedule in the table. The wage rate schedule
suggests that the firm