ECON 252 Final Exam Questions with Verified Solutions Graded A+
Refer to the scenario above. If the wage rate in this market is equal to $18, this firm will hire
________ workers. - Answers 3
Refer to the scenario above. What is the value of the marginal product of labor when the first
worker is hired? - Answers 30
The value of the marginal product of labor is the ________. - Answers firms labor demand
schedule
Which of the following is true of the market for labor? - Answers Workers are the suppliers of
labor.
The value of the marginal product of labor for a firm is the ________. - Answers firm's product
price multiplied by the marginal product of labor
When a firm hires 10 units of labor, 20 pens are produced. When it hires another unit of labor,
the total output increases to 23 pens. If the price of one pen is $2, the value of the marginal
product of the eleventh unit of labor is ________. - Answers $6
The profit-maximizing rule for a competitive firm is to hire labor until ________. - Answers Value
of marginal product of labor = Wage
A factor of production refers to any good or service that is ________. - Answers used to produce
other goods and services
Refer to the figure above. If firm B wants to hire 6 employees and pay a wage of $6, what is the
market price of its output? - Answers $2
Refer to the figure above. If the price of the output is $5.00 per unit and the wage is $10 per
worker, the firm's optimal choice in the short run is to hire ________ workers. - Answers 6
Refer to the figure above. If the price of the output is $5.00 per unit and the wage is $30 per
worker, the firm's optimal choice in the short run is to hire ________ workers. - Answers 3
Non-paying activities in economics are referred to as ________. - Answers leisure
If leisure is a normal good, how will an increase in the wage rate affect an individual's desired
quantity supplied of hours worked? - Answers t may increase or decrease, depending on the
relative magnitudes of the income and substitution effects.
The following table shows the demand and supply of labor in an industry. The equilibrium
employment in this market is ________ hours per week and those workers are paid ________ per
hour. - Answers 22; $11
Refer to the figure above. If the market price of the output is $4 and the firm hires 4 employees,
, what is the wage rate such that the fourth employee hired brings in profits that exactly equal the
marginal cost to the firm? - Answers $60
If workers are optimizing their total benefit, they will consume leisure until their ________. -
Answers marginal benefit of leisure equals their wage
Refer to the scenario above. Lydia contends that the increase in female labor force participation
was caused by a change in tastes for working among women in the United States after World
War II. According to Lydia, ________. - Answers labor supply increased
Which of the following is likely to lead to a leftward shift in the demand curve for labor in the
petroleum extraction industry? - Answers An increase in the price of cars
Other things remaining the same, which of the following is likely to happen if an industry
introduces labor-saving technology in production? - Answers Both the wage rate and the
employment level will decrease in the industry.
The condition determining the optimal amount of leisure is that the ________. - Answers marginal
benefit of leisure should equal the wage rate
Which of the following is likely to cause a decrease in both the wage rate and the level of
employment in an industry? - Answers A leftward shift in the demand curve for labor, without
any change in the supply curve of labor
Other things remaining the same, which of the following is likely to increase both the wage rate
and the number of workers hired on a rice farm? - Answers An increase in the price of rice
Other things remaining the same, which of the following is likely to increase both the wage rate
and the number of workers hired in a steel-producing factory? - Answers The introduction of
labor-complementary technology in the factory
Other things remaining the same, which of the following is likely to decrease both the wage rate
and the number of workers hired on a tea estate? - Answers A decrease in the price of tea
Meryl works 10 hours a day in an hourly job that pays $15 per hour. Suppose her wage rate
increases to a really high rate of $10,000 per hour. In this case, Meryl will ________. - Answers
both A and B apply at the same time, and Meryl's supply will depend of their relative strengths
Which of the following would NOT cause the labor supply schedule to increase (shift right)? -
Answers An increase in the firm's product price
Other things remaining the same, which of the following is likely to cause a leftward shift in the
supply curve of labor? - Answers A decrease in population
Refer to the scenario above. After this migration, the wage rate in Delaware will equal ________. -
Answers $6
Refer to the scenario above. If the wage rate in this market is equal to $18, this firm will hire
________ workers. - Answers 3
Refer to the scenario above. What is the value of the marginal product of labor when the first
worker is hired? - Answers 30
The value of the marginal product of labor is the ________. - Answers firms labor demand
schedule
Which of the following is true of the market for labor? - Answers Workers are the suppliers of
labor.
The value of the marginal product of labor for a firm is the ________. - Answers firm's product
price multiplied by the marginal product of labor
When a firm hires 10 units of labor, 20 pens are produced. When it hires another unit of labor,
the total output increases to 23 pens. If the price of one pen is $2, the value of the marginal
product of the eleventh unit of labor is ________. - Answers $6
The profit-maximizing rule for a competitive firm is to hire labor until ________. - Answers Value
of marginal product of labor = Wage
A factor of production refers to any good or service that is ________. - Answers used to produce
other goods and services
Refer to the figure above. If firm B wants to hire 6 employees and pay a wage of $6, what is the
market price of its output? - Answers $2
Refer to the figure above. If the price of the output is $5.00 per unit and the wage is $10 per
worker, the firm's optimal choice in the short run is to hire ________ workers. - Answers 6
Refer to the figure above. If the price of the output is $5.00 per unit and the wage is $30 per
worker, the firm's optimal choice in the short run is to hire ________ workers. - Answers 3
Non-paying activities in economics are referred to as ________. - Answers leisure
If leisure is a normal good, how will an increase in the wage rate affect an individual's desired
quantity supplied of hours worked? - Answers t may increase or decrease, depending on the
relative magnitudes of the income and substitution effects.
The following table shows the demand and supply of labor in an industry. The equilibrium
employment in this market is ________ hours per week and those workers are paid ________ per
hour. - Answers 22; $11
Refer to the figure above. If the market price of the output is $4 and the firm hires 4 employees,
, what is the wage rate such that the fourth employee hired brings in profits that exactly equal the
marginal cost to the firm? - Answers $60
If workers are optimizing their total benefit, they will consume leisure until their ________. -
Answers marginal benefit of leisure equals their wage
Refer to the scenario above. Lydia contends that the increase in female labor force participation
was caused by a change in tastes for working among women in the United States after World
War II. According to Lydia, ________. - Answers labor supply increased
Which of the following is likely to lead to a leftward shift in the demand curve for labor in the
petroleum extraction industry? - Answers An increase in the price of cars
Other things remaining the same, which of the following is likely to happen if an industry
introduces labor-saving technology in production? - Answers Both the wage rate and the
employment level will decrease in the industry.
The condition determining the optimal amount of leisure is that the ________. - Answers marginal
benefit of leisure should equal the wage rate
Which of the following is likely to cause a decrease in both the wage rate and the level of
employment in an industry? - Answers A leftward shift in the demand curve for labor, without
any change in the supply curve of labor
Other things remaining the same, which of the following is likely to increase both the wage rate
and the number of workers hired on a rice farm? - Answers An increase in the price of rice
Other things remaining the same, which of the following is likely to increase both the wage rate
and the number of workers hired in a steel-producing factory? - Answers The introduction of
labor-complementary technology in the factory
Other things remaining the same, which of the following is likely to decrease both the wage rate
and the number of workers hired on a tea estate? - Answers A decrease in the price of tea
Meryl works 10 hours a day in an hourly job that pays $15 per hour. Suppose her wage rate
increases to a really high rate of $10,000 per hour. In this case, Meryl will ________. - Answers
both A and B apply at the same time, and Meryl's supply will depend of their relative strengths
Which of the following would NOT cause the labor supply schedule to increase (shift right)? -
Answers An increase in the firm's product price
Other things remaining the same, which of the following is likely to cause a leftward shift in the
supply curve of labor? - Answers A decrease in population
Refer to the scenario above. After this migration, the wage rate in Delaware will equal ________. -
Answers $6
