Markets for Factors of Production

2. 19 Markets for Factors of Production CLICKER QUESTIONS

3. Checkpoint 19.3 Checkpoint 19.1 Checkpoint 19.2 Question 8 Question 1 Question 4 Question 9 Question 2 Question 5 Question 10 Question 3 Question 6 Question 7

4. CHECKPOINT 19.1 Question 1 The value of the marginal product of labor is equal to the marginal product of labor ____. • divided by the price of the good produced • multiplied by the price of the good produced • minus the average total cost of producing the good • plus the marginal profit from selling the good • minus the wage rate

5. CHECKPOINT 19.1 Question 2 An increase in the price of a firm’s output leads to ______. • a decrease in the quantity of the labor demanded by the firm • an increase in the quantity of the labor demanded by the firm • an increase in the firm’s demand for labor • a decrease in the firm’s demand for labor • an increase in the supply of labor

6. CHECKPOINT 19.1 Question 3 When a firm maximizes profit, it hires the quantity of labor at which the value of marginal product of labor ____. • equals the wage rate • exceeds the wage rate • is less than the wage rate • is a mirror image of the wage rate • equals the price of the good produced by the firm

7. CHECKPOINT 19.2 Question 4 An individual’s labor supply curve eventually bends backward because at a high enough wage rate, _______. • people are willing to work more hours • employers are willing to hire more workers • people desire more leisure time • very few workers are hired • more people enter the labor market to search for jobs

8. CHECKPOINT 19.2 Question 5 The supply of labor increases if _______. • the adult population increases • the demand for labor increases • the price of the good produced increases • the wage rate rises • more people remain in school or college

9. CHECKPOINT 19.2 Question 6 If the supply of labor decreases, then the equilibrium wage rate ____ and equilibrium employment ____. • does not change; decreases • rises; increases • rises; decreases • falls; increases • falls; decreases

10. CHECKPOINT 19.2 Question 7 A union is least likely to support ________. • an increase in the minimum wage rate • laws that restrict immigration into the country • on-the-job training that makes their members’ more productive • a government policy to increase the quantity of imports • programs that boost the demand for the goods and services their members produce

11. CHECKPOINT 19.3 Question 8 The equilibrium quantity of capital is ________. • determined by only the supply of capital because the supply is perfectly inelastic • determined by only the demand for capital because the demand is perfectly inelastic • expected to increase at the same rate as the interest rate • determined by the supply of capital and the demand for capital • the only factor of production whose quantity is not determined in a market

12. CHECKPOINT 19.3 Question 9 The supply of each particular block of land is _____, so an increase in the demand for the block of land ____ its price. • perfectly elastic; doesn’t change • unit elastic; doesn’t change • elastic; decreases • perfectly inelastic; increases • inelastic but not perfectly inelastic; increases

13. CHECKPOINT 19.3 Question 10 The demand for a nonrenewable resource is ______. • determined by the value of its marginal product • fixed and cannot change • perfectly inelastic • perfectly elastic • not defined because the resource can be used only once