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econ t4
| Question | Answer |
|---|---|
| The MRP curve for labor | is the firm's labor demand curve. |
| The demand for airline pilots results from the demand for air travel. This fact is an example of | the derived demand for labor. |
| Which of the following is equivalent to the costs that firms incur in acquiring economic resources? | income of the resources |
| Resource pricing is important because | of all these reasons. |
| All firms have to incur costs because of | the resources they use. |
| A farmer who has fix is 24 for the first worker hired, 32 when two workers are hired, 37 when tred, and 40 when four are hired. The farmer's product sells for $5 per unit, and the wage rate is $13 per worker. What is the farmer's profit-maximizing output? | 40 |
| To firms, resource prices are a major part of | costs. |
| The demand for a productive resource is said to be "derived" because the demand for the factor | depends on the demand for the product it helps to produce. |
| In the United States, professional football players earn much higher incomes than professional soccer players. This occurs because | U.S. consumers overall have a greater demand for football games than for soccer games. |
| If one worker can pick $10 worth of grapes and two workers together can pick $24 worth of grapes, the | marginal revenue product of the second worker is $14. |
| When economists say that the demand for labor is a derived demand, they mean that it is | related to the demand for the product or service labor is producing. |
| Holding revenues constant, cost minimization by firms is equivalent to | profit maximization. |
| Assume that a restaurant is hiring labor in an amount such that the MRC of the last worker is $12 and her MRP is $16. On the basis of this information, we can say that | profits will be increased by hiring additional workers. |
| If the wage rate is $12 and Manfred's only fixed input is capital, the total cost of which is $25, then what will be his economic profit? | 113 |
| The demand for a resource depends primarily on | the demand for the product or service that it helps produce. |
| An increase in the demand for HDTV sets leads to an increase in demand for LCD and LED TV screens. This situation arises because | the demand for LCD and LED screens is a derived demand. |
| Hiring the profit-maximizing combination of resources ensures that production costs will be minimized. | TRUE |
| Harry owns a barbershop and charges $8 per haircut. By hiring one barber at $11 per hour, the shop can provide 22 haircuts per eight-hour day. By a total of 42 haircuts per day. The MP of the second barber is | 20 haircuts. |
| The general rule for hiring any input (say, labor) in the profit-maximizing amount is MRC = MRP. This rule takes the special form W = MRP (where W is the wage rate) when the | firm is hiring labor under purely competitive conditions. |
| The product price is $10 per unit and the cost per worker is $540. How many workers will the firm employ? | 5 |
| In a monopsonistic labor market, the employer will maximize profits by employing workers up to that point at which | marginal revenue product equals marginal resource (labor) cost. |
| The consumer price index is 113 in Year 1 and 118 in Year 2. The nominal wage rate is $8 in Year 1 and $9 in Year 2. What is the approximate percentage change in the real wage rate from Year 1 to Year 2? | 8.1 percent |
| A major function of the National Labor Relations Board is to | investigate and rule on charges of unfair labor practices by either management or unions. |
| Marginal resource cost refers to the | amount by which a firm's total resource cost increases as the result of hiring one more unit of the resource. |
| The real wage will rise if the nominal wage | increases more rapidly than the general price level. |
| Inclusive unionism is practiced mostly by | industrial unions. |
| The market supply curve for labor is upsloping because | employers as a group must pay higher wage rates to obtain more workers. |
| Increases in the productivity of labor result partly from | improvements in technology. |
| A market where there is only a single buyer is called a(n) | monopsony. |
| If the price level falls by 1 percent in a year and nominal wages decrease by 4 percent, then real wages will | decrease by 3 percent. |
| The product price is $10 per unit and the cost per worker is $540. How many workers will the firm employ? | 5 |
| A firm can hire 6 workers at a wage rate of $12 per hour but must pay $13 per hour to all of its employees to attract a seventh worker. The marginal wage cost of the seventh worker is | $19. |
| Labor unions may attempt to raise wage rates by | forcing employers, under the threat of a strike, to pay above-equilibrium wage rates. |
| If the nominal wages of carpenters rose by 4 percent in 2019 and the price level increased by 1 percent, then the real wages of carpenters | increased by 3 percent. |
| Marginal revenue product (MRP) of labor refers to the | increase in total revenue resulting from hiring one more unit of labor. |
| The equilibrium wage rate in a bilateral monopoly labor market is | logically indeterminate within a certain range. |
| A firm operating in a purely competitive resource market faces a resource supply curve that is | perfectly elastic. |
| The long-run trend of real wages | has been upward. |
| The table shows labor demand data on the left and labor supply data on the right. How many workers will this profit-maximizing firm choose to employ? | 3 |
| Economic rent, or pure rent, is | the price paid for the use of land and other nonreproducible resources. |
| Interest rates of various loans vary over a wide range due to differences in all of the following, except | lender characteristics. |
| Refer to the table, in which the values for columns (2) through (5) are in acres. If the relevant columns are (1), (2), and (3), land rent will be | $200 per acre. |
| Landowners will not receive any rent so long as | the supply curve lies entirely to the right of the demand curve. |
| The prices paid to a productive resource usually perform an incentive function except with what resource? | land |
| Refer to the diagram. Land | would be a free resource if demand were D4 or less. |
| Refer to the table, in which the values for columns (2) through (5) are in acres. If the relevant columns are (1), (2), and (4), land rent will be | $200 per acre. |
| The rent paid for the pasture land used to graze cattle would increase if | any of these occurred. |
| The marginal revenue product (MRP) of land declines as more land is brought into use. As a result, the | demand curve for land is downsloping. |
| In a market system, private ownership of land does not lead to which of the following results? | Private owners will face no cost in using land for one purpose rather than another. |
| The "time-value of money" refers to the fact that | a given amount of money is more valuable the sooner it is obtained. |
| If the interest rate is 15 percent, what is the future value of $10,000 two years from now? | $13,225 |
| A decrease in the supply of loanable funds and an increase in the demand for loanable funds will | increase the interest rate, but the quantity of funds loaned may either increase or decrease. |
| The economist who advocated a single tax on land was | Henry George. |
| For all practical purposes, the supply of land is | almost perfectly inelastic. |
| Some economists advocate taxes on land because such taxes | do not affect the supply of land. |
| Refer to the table representing Kara's bank account. If the $5,000 was deposited into her account at the beginning of year 1 and no further deposits or withdrawals were made, the value for cell D | is $624.32. |
| As interest rates decrease, the | cost of current relative to future consumption decreases. |
| If the interest rate is 12 percent, what is the future value of $8,000 three years from now? | $11,239 |
| Other things equal, the interest rate on a loan will be smaller, | if the loan interest is exempt from taxation. |
| The average tax rate is | the ratio of total taxes paid to total taxable income. |
| An income tax is progressive if the | percentage of income paid as taxes increases as income increases. |
| Proprietary income refers to | revenue generated by government-run businesses. |
| The burden of a specific sales tax falls entirely on the consumer when the | price elasticity of demand is zero. |
| Government borrowing | may crowd out private sector investment. |
| Indy currently earns $70,000 in taxable income and pays $12,000 in taxes. Suppose that Indy faces a marginal tax rate of 25 percent and his boss offers him a raise of $4,000 per year. Indy should | accept the raise because his after-tax income will rise by $3,000. |
| Revenues flowing to the government from government-run or government-sponsored businesses, such as public utilities and state lotteries, are known as | proprietary income. |
| The efficiency loss of a tax is | the net value of sacrificed output caused by the tax. |
| The greater the elasticity of supply of and demand for a good, the | larger will be the efficiency loss of an excise tax on the good. |
| In the diagram, solid arrows reflect real flows, while broken arrows are monetary flows. Flow (1) might represent | government provision of highways for truck transportation. |
| Assume that in year 1 you pay an average tax rate of 20 percent on a taxable income of $30,000. In year 2, you pay an average tax rate of 25 percent on a taxable income of $40,000. Assuming no chr additional $10,000 of income is | 40 percent. |
| Taxes on commodities or on purchases are known as | sales and excise taxes. |
| If the marginal tax rate is 25 percent, by how much must income have increased if your tax bill increases by $200? | $800 |
| The ability-to-pay principle of taxation | suggests that taxes should vary directly with people's income and wealth. |
| The addition of government to the circular-flow model illustrates that government | does all of the things stated in the other possible answers. |
| The three most important sources of federal tax revenue in order of descending importance are | personal income, payroll, and corporate income taxes. |
| Refer to the personal income tax schedule given in the table. If your taxable income is $10,000, your average tax rate is | 30 percent; your marginal rate on the last $2,000 is 50 percent. |
| If you would have to pay $5,000 in taxes on $25,000 taxable income and $7,000 in taxes on $30,000 taxable income, then the marginal tax rate on the additional $5,000 of income is | 40 percent, and the average tax rate is about 23 percent at the $30,000 income level. |
| The tax rates embodied in the federal personal income tax are such that | the marginal tax rate is higher than the average tax rate, causing the average tax rate to rise as income rises. |
| The benefits-received principle of taxation is most evident in | excise taxes on gasoline. |
| Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes of $4,000, $3,200, $2,400, $1,600, and $800, respectively. What percentage of total income is received by the highest quintile? | 33.3 |
| Suppose the market wage rate for whites is $20 an hour and the monetary value a prejudiced employer attaches to the disutility of hiring African Americans is $4. This employer will be indifferent bets and whites only when the African-American wage rate is | $16. |
| The basic argument for income inequality is that | income inequality is essential to maintain incentives to produce. |
| In 2017, the official poverty line for a household of four in the United States was | $24,858. |
| Housing subsidies for low-income households | represent a noncash transfer. |
| In the quintile distribution of income, the term "quintile" represents | 20 percent of the income receivers. |
| If discrimination based on gender and race was eliminated, we would expect the | personal distribution of income to become more equal. |
| The term "growing income inequality" implies that the | upper quintiles of income receivers are getting relatively more of the total income than before and the lower quintiles are getting relatively less. |
| The Gini ratio of income inequality ranges between | 0 and 1. |
| Statistical discrimination refers to | making individual hiring decisions on the basis of the characteristics of the group to which a person belongs, rather than on his or her personal characteristics and productivity. |
| The Supplemental Nutrition Assistance Program (SNAP) | was previously known as the food-stamp program. |
| Suppose an employer is biased against African Americans. If his discrimination coefficient is $5, the employer will | hire only whites if the actual African-American–white wage differential is less than $5. |
| Which of the following Gini ratios indicates the highest degree of income inequality? | 0.78 |
| The Lorenz curve portrays | the personal distribution of income. |
| Income mobility | is the movement of individuals and households from one income quintile to another over time. |
| Differences in the amounts and quality of education and training | combine with differences in mental, physical, and aesthetic talents to produce income inequality. |
| The highest quintile of households in the income distribution (as of 2017) | receives about 3 percent of the total income. |
| The U.S. poverty rate for | children under 18 years of age is higher than for the overall population. |
| One cause of income inequality in the United States is | differences in preferences for market work relative to nonmarket activities as well as differences in preferences for types of work. |
| In 2017, a household with an annual income of $40,000 would find itself in the | second quintile of the household income distribution. |
| Hiring the least-costly combination of resources ensures that profits will be maximized. | FALSE |
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cohen.early