How Factor Markets Work

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Economic Issues and Concepts
Economic Theories,Data,and Graphs
Demand,Supply,and Price
Elasticity
Price Controls and Market Efficiency
Consumer Behaviour
Producers in the Short Run
Producers in the Long Run
Competitive Markets
Monopoly,cartels,and Price Discrimination
Imperfect Competition and Strategic Behaviour
Economic Efficiency and Public Policy
How Factor Markets Work
Labour Markets and Income Inequality
Interest Rates and the Capital Market
Market Failures and Government Intervention
The Economics of Environmental Protection
Taxation and Public Expenditure
What Macroeconomics Is All About
The Measurement of National Income
The Simplest Short-Run Macro Model
Adding Government and Trade to the Simple Macro Model
Output and Prices in the Short Run
From the Short Run to the Long Run: The Adjustment of Factor Prices
Long-Run Economic Growth
Money and Banking
Money,Interest Rates,and Economic Activity
Monetary Policy in Canada
Inflation and Disinflation
Unemployment Fluctuations and the Nairu
Government Debt and Deficits
The Gains From International Trade
Trade Policy
Exchange Rates and the Balance of Payments

All Questions

Question 1

Free

Multiple Choice

For any firm in any market structure,a factor's marginal revenue product is

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the average product of the factor multiplied by the price of the output.

the change in revenue caused by the sale of the product contributed by an additional unit of input.

the change in revenue caused by the sale of an additional unit of output.

the increase in output resulting from the use of an additional unit of the factor multiplied by the cost of that factor.

marginal revenue multiplied by total product.

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Question 2

Free

Multiple Choice

Suppose the last unit of a factor of production employed has a marginal product of 12.The factor's price is $8,and the product's competitive market price is $6.This factor's marginal revenue product is

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$6.

$36.

$48.

$72.

$96.

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Question 3

Free

Multiple Choice

The marginal revenue product of labour is the change in the value of the firm's output resulting from

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a change in the product's price.

an increase in the marginal physical product of labour.

a change in the wage rate paid to labour.

producing one more unit of output.

hiring one more unit of labour input.

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Question 4

Free

Multiple Choice

A condition for the profit-maximizing use of any factor of production is (where MP = marginal product,w = the price of a factor of production,p = price of one unit of the firm's output,MR = marginal revenue,MC = marginal cost,MRP = marginal revenue product):

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MRP = MP × p

MR =

MC = MR × w

w = MP × p

MRP = MR × MC

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Question 5

Free

Multiple Choice

Consider labour that is hired for $18 per hour.If the last hour of labour hired produces 8 units of output which sells for $10 per unit,that labour-hour's marginal revenue product is

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$1.20.

$4.44.

$64.

$80.

$144.

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Question 6

Multiple Choice

Consider labour that is hired for $18 per hour.If the last hour of labour hired produces 8 units of output which sells for $10 per unit,that labour-hour adds to the firm's profit and so labour should be hired.

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$80; more

-$80; less

$62; less

$62; more

$0; no

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Question 7

Multiple Choice

Consider labour that is hired for $18 per hour.If the last hour hired produces 8 units of output which sells for $2 per unit, labour should be hired in this situation since the wage is MRP.

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more; greater than

more; less than

less; greater than

less; less than

no; equal to

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Question 8

Multiple Choice

Consider labour that is hired for $18 per hour.If the last hour hired produces 8 units of output which sells for $2 per unit,that labour-hour adds to the firm's profit and so labour should be hired.

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-$128; more

-$2; less

$16; less

$16; more

$0; no

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Question 9

Multiple Choice

Consider labour hired for $18 per hour.If the last hour of labour hired produces 8 units of output which sells for $10 per unit, labour should be hired in this situation since the wage is MRP.

Choose correct answer/s

more; greater than

more; less than

less; greater than

less; less than

no; equal to

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Question 10

Multiple Choice

Consider labour hired for $1000 per week.If the last week of labour hired produces 0.25 units of output which sells for $5000 per unit, labour should be hired in this situation since the wage is MRP.

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more; greater than

more; less than

less; greater than

less; less than

no; equal to

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Question 11

Multiple Choice

Consider a small firm that is producing winter jackets.It can lease an additional sewing machine for one month for $750.With this additional machine,the firm can produce an additional 6 jackets during that time period that it sells for $125 each.Hiring the marginal machine adds to the firm's profit and so it should the machine.

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-$750; not lease

-$750; lease

$0; be indifferent as to whether to lease

$750; not lease

$750; lease

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Question 12

Multiple Choice

Consider a small firm that is producing winter jackets.It can lease an additional sewing machine for one month for $1200.With this additional machine,the firm can produce an additional 7 jackets during that time period that it sells for $250 each.Hiring the marginal machine adds to the firm's profit and so it should the machine.

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-$1200; not lease

$0; be indifferent as to whether to lease

$1200; lease

$550; lease

$1750; lease

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Question 13

Multiple Choice

Consider a small firm that is producing winter jackets.It can lease an additional sewing machine for one month for $2400.With this additional machine,the firm can produce an additional 4 jackets during that time period that it sells for $550 each.Hiring the marginal machine adds to the firm's profit and so it should the machine.

Choose correct answer/s

-$2400; not lease

-$200; not lease

$0; be indifferent as to whether to lease

$200; lease

$2400; lease

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Question 14

Multiple Choice

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm.
TABLE 13-1
-Refer to Table 13-1.The marginal product of the 15th unit of the factor of production is

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-2.

82.

84.

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Question 15

Multiple Choice

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10th unit only

11th unit only

12th unit only

13th unit only

all units shown in the table

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How Factor Markets Work

For any firm in any market structure,a factor's marginal revenue product is

Suppose the last unit of a factor of production employed has a marginal product of 12.The factor's price is $8,and the product's competitive market price is $6.This factor's marginal revenue product is

The marginal revenue product of labour is the change in the value of the firm's output resulting from

A condition for the profit-maximizing use of any factor of production is (where MP = marginal product,w = the price of a factor of production,p = price of one unit of the firm's output,MR = marginal revenue,MC = marginal cost,MRP = marginal revenue product):

Consider labour that is hired for $18 per hour.If the last hour of labour hired produces 8 units of output which sells for $10 per unit,that labour-hour's marginal revenue product is

Consider labour that is hired for $18 per hour.If the last hour of labour hired produces 8 units of output which sells for $10 per unit,that labour-hour adds ________ to the firm's profit and so ________ labour should be hired.

Consider labour that is hired for $18 per hour.If the last hour hired produces 8 units of output which sells for $2 per unit, ________ labour should be hired in this situation since the wage is ________ MRP.

Consider labour that is hired for $18 per hour.If the last hour hired produces 8 units of output which sells for $2 per unit,that labour-hour adds ________ to the firm's profit and so ________ labour should be hired.

Consider labour hired for $18 per hour.If the last hour of labour hired produces 8 units of output which sells for $10 per unit, ________ labour should be hired in this situation since the wage is ________ MRP.

Consider labour hired for $1000 per week.If the last week of labour hired produces 0.25 units of output which sells for $5000 per unit, ________ labour should be hired in this situation since the wage is ________ MRP.

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm. TABLE 13-1-Refer to Table 13-1.The marginal product of the 15th unit of the factor of production is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm. TABLE 13-1-Refer to Table 13-1.The marginal product of the 12th unit of the factor of production is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm. TABLE 13-1-Refer to Table 13-1.The total revenue of the output produced by 12 units of the factor is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm. TABLE 13-1-Refer to Table 13-1.The total revenue of the output produced by 15 units of the factor is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm. TABLE 13-1-Refer to Table 13-1.The marginal revenue product of the 14th unit of the factor is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm. TABLE 13-1-Refer to Table 13-1.The marginal revenue product of the 15th unit of the factor is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm. TABLE 13-1-Refer to Table 13-1.Diminishing marginal returns are present for which units of the factor of production?

Consider labour that is hired for $18 per hour.If the last hour of labour hired produces 8 units of output which sells for $10 per unit,that labour-hour adds to the firm's profit and so labour should be hired.

Consider labour that is hired for $18 per hour.If the last hour hired produces 8 units of output which sells for $2 per unit, labour should be hired in this situation since the wage is MRP.

Consider labour that is hired for $18 per hour.If the last hour hired produces 8 units of output which sells for $2 per unit,that labour-hour adds to the firm's profit and so labour should be hired.

Consider labour hired for $18 per hour.If the last hour of labour hired produces 8 units of output which sells for $10 per unit, labour should be hired in this situation since the wage is MRP.

Consider labour hired for $1000 per week.If the last week of labour hired produces 0.25 units of output which sells for $5000 per unit, labour should be hired in this situation since the wage is MRP.

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm.
TABLE 13-1
-Refer to Table 13-1.The marginal product of the 15th unit of the factor of production is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm.
TABLE 13-1
-Refer to Table 13-1.The marginal product of the 12th unit of the factor of production is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm.
TABLE 13-1
-Refer to Table 13-1.The total revenue of the output produced by 12 units of the factor is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm.
TABLE 13-1
-Refer to Table 13-1.The total revenue of the output produced by 15 units of the factor is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm.
TABLE 13-1
-Refer to Table 13-1.The marginal revenue product of the 14th unit of the factor is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm.
TABLE 13-1
-Refer to Table 13-1.The marginal revenue product of the 15th unit of the factor is

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm.
TABLE 13-1
-Refer to Table 13-1.Diminishing marginal returns are present for which units of the factor of production?