ECON 101 EXAMINATION QUESTIONS
WITH 100% CORRECT ANSWERS
What is the marginal revenue product of the fifth worker? (see table) - Answer--$800-
CORRECT
$400
$160
$2
Harry owns a barber shop and charges $6 per haircut. By hiring one barber at $10 per
hour, the shop can provide 24 haircuts per 8-hour day. By hiring a second barber at the
same wage rate, the shop can now provide a total of 42 haircuts per day. The MRP of
the second barber is - Answer-$126.
42 haircuts.
$108- CORRECT
18 haircuts.
How many more workers will the firm hire when the wage rate is $15 instead of $30?
(see table) - Answer-3 workers
2 WORKERS
1 worker
4 workers
The demand for airline pilots results from the demand for air travel. This fact is an
example of - Answer-resource substitutability.
THE DERIVED DEMAND FOR LABOR.
elasticity of resource demand.
rising marginal resource cost.
Assuming a firm is selling its output in a purely competitive market, its resource demand
curve can be determined by - Answer-MULTIPLYING MARGINAL PRODUCT BY
PRODUCT PRICE.
multiplying total product by product price.
dividing total revenue by marginal product.
comparing marginal product with various possible input prices.
The change in a firm's total revenue that results from hiring an additional worker is
measured by the - Answer-average revenue product.
marginal product.
MARGINAL REVENUE PRODUCT.
marginal revenue.
, Suppose the demand for strawberries rises sharply, resulting in an increased price for
strawberries. As it relates to strawberry pickers, we could expect the - Answer-MRC
curve to shift downward.
MRP curve to shift to the left.
MP curve to shift downward.
MRP CURVE TO SHIFT TO THE RIGHT.
Which of the following will not cause a shift in the demand for resource X? - Answer-a
decrease in the price of substitute resource Y
an increase in the productivity of resource X
A DECLINE IN THE PRICE OF RESOURCE X
an increase in the price of the product resource X is producing
If the nominal wages of carpenters rose by 5% in 2013 and the price level increased by
3%, then the real wages of carpenters - Answer-increased by 3%.
INCREASED BY 2%.
decreased by 2%.
increased by 8%.
The real wage will rise if the nominal wage - Answer-falls at the same rate as the
general price level.
increases at the same rate as labor productivity.
INCREASES MORE RAPIDLY THAN THE GENERAL PRICE LEVEL.
falls more rapidly than the general price level.
In a purely competitive labor market, a profit-maximizing firm will hire labor up to the
point where the marginal revenue product of labor equals the - Answer-marginal cost of
one extra unit of output.
average cost of each unit of output.
price of the product.
WAGE RATE OR PRICE OF LABOR.
A profit-maximizing firm will - Answer-expand employment if marginal revenue product
is less than marginal resource cost.
expand employment if marginal revenue product equals marginal resource cost.
reduce employment if marginal revenue product equals marginal resource cost.
REDUCE EMPLOYMENT IF MARGINAL REVENUE PRODUCT IS LESS THAN
MARGINAL RESOURCE COST.
The area 0abc represents (see graph) - Answer-total revenue of the firm.
TOTAL EARNINGS OF LABOR.
marginal revenue product of labor.
marginal labor cost.
Which of the following has not been a major factor contributing to the high productivity
of labor in the United States? - Answer-high levels of capital investment
WITH 100% CORRECT ANSWERS
What is the marginal revenue product of the fifth worker? (see table) - Answer--$800-
CORRECT
$400
$160
$2
Harry owns a barber shop and charges $6 per haircut. By hiring one barber at $10 per
hour, the shop can provide 24 haircuts per 8-hour day. By hiring a second barber at the
same wage rate, the shop can now provide a total of 42 haircuts per day. The MRP of
the second barber is - Answer-$126.
42 haircuts.
$108- CORRECT
18 haircuts.
How many more workers will the firm hire when the wage rate is $15 instead of $30?
(see table) - Answer-3 workers
2 WORKERS
1 worker
4 workers
The demand for airline pilots results from the demand for air travel. This fact is an
example of - Answer-resource substitutability.
THE DERIVED DEMAND FOR LABOR.
elasticity of resource demand.
rising marginal resource cost.
Assuming a firm is selling its output in a purely competitive market, its resource demand
curve can be determined by - Answer-MULTIPLYING MARGINAL PRODUCT BY
PRODUCT PRICE.
multiplying total product by product price.
dividing total revenue by marginal product.
comparing marginal product with various possible input prices.
The change in a firm's total revenue that results from hiring an additional worker is
measured by the - Answer-average revenue product.
marginal product.
MARGINAL REVENUE PRODUCT.
marginal revenue.
, Suppose the demand for strawberries rises sharply, resulting in an increased price for
strawberries. As it relates to strawberry pickers, we could expect the - Answer-MRC
curve to shift downward.
MRP curve to shift to the left.
MP curve to shift downward.
MRP CURVE TO SHIFT TO THE RIGHT.
Which of the following will not cause a shift in the demand for resource X? - Answer-a
decrease in the price of substitute resource Y
an increase in the productivity of resource X
A DECLINE IN THE PRICE OF RESOURCE X
an increase in the price of the product resource X is producing
If the nominal wages of carpenters rose by 5% in 2013 and the price level increased by
3%, then the real wages of carpenters - Answer-increased by 3%.
INCREASED BY 2%.
decreased by 2%.
increased by 8%.
The real wage will rise if the nominal wage - Answer-falls at the same rate as the
general price level.
increases at the same rate as labor productivity.
INCREASES MORE RAPIDLY THAN THE GENERAL PRICE LEVEL.
falls more rapidly than the general price level.
In a purely competitive labor market, a profit-maximizing firm will hire labor up to the
point where the marginal revenue product of labor equals the - Answer-marginal cost of
one extra unit of output.
average cost of each unit of output.
price of the product.
WAGE RATE OR PRICE OF LABOR.
A profit-maximizing firm will - Answer-expand employment if marginal revenue product
is less than marginal resource cost.
expand employment if marginal revenue product equals marginal resource cost.
reduce employment if marginal revenue product equals marginal resource cost.
REDUCE EMPLOYMENT IF MARGINAL REVENUE PRODUCT IS LESS THAN
MARGINAL RESOURCE COST.
The area 0abc represents (see graph) - Answer-total revenue of the firm.
TOTAL EARNINGS OF LABOR.
marginal revenue product of labor.
marginal labor cost.
Which of the following has not been a major factor contributing to the high productivity
of labor in the United States? - Answer-high levels of capital investment
