This quiz works best with JavaScript enabled. Home > Economics > Microeconomics > Factor Markets > Factor Markets – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Factor Markets Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A firm employs 4 workers and produces 360 units of output. Its selling price is $ 4. When it hires a 5th worker, its total output rises to 400. The MRP of the 5th worker is A) $ 4. B) $ 60. C) $ 160. D) $ 400. E) $ 0. Show Answer Correct Answer: C) $ 160. 2. A toy company has just built an assembly line which includes robots and machinery to make dolls. They begin to hire humans to maintain the machines. As more workers get hired, an economist will expect A) Marginal product will increase sharply and then rise at a reduced rate as more people are hired. B) Marginal product will be negative as more people are hired. C) Marginal product will decrease at first and then rebound to equilibrium as more people are hired. D) Marginal product will increase at first and then decrease as more people are hired. . Show Answer Correct Answer: D) Marginal product will increase at first and then decrease as more people are hired. . 3. A monopsony pays ..... & hires ..... than a P.C. Firm A) Much more & tons of workers. B) More & more. C) Less & less. D) The same & fewer. Show Answer Correct Answer: C) Less & less. 4. The demand for labor will decrease due to:i:a decrease in the demand for the good being produced decreasesii:level of human capital decreasesiii:physical capital stock decreasesiv:a technology that increased worker productivity is banned. A) I only. B) Ii only. C) Ii and iii only. D) I, iii, and iv only. E) All of the above. Show Answer Correct Answer: E) All of the above. 5. What is the impact of a minimum wage on a competitive labor market? A) Decreases unemployment. B) Increases wages without affecting employment. C) No impact on unemployment. D) Increases unemployment. Show Answer Correct Answer: D) Increases unemployment. 6. There is ..... relationship between wage and the quantity of labor demanded. A) Not a. B) A contentious. C) A direct. D) An inverse. Show Answer Correct Answer: D) An inverse. 7. The two types of factor markets are A) Monopoly. B) Oligopoly. C) Monopolistic Competition. D) Perfect Competition & Monopsony. Show Answer Correct Answer: D) Perfect Competition & Monopsony. 8. What is MRC? A) Marginal Revenue Cost. B) Marginal Resource Counting. C) Marginal Resource Cost. D) Mad, Risky, Customers. Show Answer Correct Answer: C) Marginal Resource Cost. 9. A business's demand for labor is known as derived demand because A) A worker's pay depends on how much human capital has been invested by the business. B) Workers want to work and try to keep their wages low to attract businesses. C) The business gains more total revenue through hiring more workers. D) The number of workers needed depends on the products demanded by consumers in the product market. . Show Answer Correct Answer: D) The number of workers needed depends on the products demanded by consumers in the product market. . 10. The cost-minimizing input combintation is found when A) MPL/MFCL=MPK/MFCK. B) MPL/MFCL>MPK/MFCK. C) MPL/MFCL D) MRPL/MFCL=MRPK/MFCK=1. E) MRPL/MFCL=MRPK/MFCK=3. Show Answer Correct Answer: A) MPL/MFCL=MPK/MFCK. 11. What is the term for the demand for a resource that comes from the demand for the product itself? A) Derived demand. B) Supply and demand. C) Market demand. D) Consumer demand. Show Answer Correct Answer: A) Derived demand. 12. Dunder Mifflin is a monopsonistic employer of sales reps. What wage quantity combination does Dunder Mifflin choose in order to maximize its profits? A) W1 and Q1. B) W1 and Q3. C) W2 and Q2. D) W2 and Q4. E) W3 and Q3. Show Answer Correct Answer: B) W1 and Q3. 13. MFC in a perfectly competitive labor market is A) Equal to the market wage rate. B) Equal to the price of the good. C) Greater than the market wage rate. D) Less than the market wage rate. E) Less than the price of the good. Show Answer Correct Answer: A) Equal to the market wage rate. 14. Which of the following will shift the demand curve for a factor of production to the right? A) An increase in the price of the factor of production. B) An increase in the price of a substitute factor of production. C) A decrease in the price of the product produced by the factor. D) A decrease in the marginal product of the factor. E) A decline in technology used by the factor of production. Show Answer Correct Answer: B) An increase in the price of a substitute factor of production. 15. Firms in perfectly competitive labor markets have a perfectly elastic S=MFC curve because A) Firms are wage takers, so they can hire as many or as few workers as they would like at the market wage. B) MFC>W. C) W>MFC. D) This is a trick question, firms in perfectly competitive labor markets have an downward sloping S=MFC curve. E) This is a trick question, firms in perfectly competitive labor markets have an upward sloping S=MFC curve. Show Answer Correct Answer: A) Firms are wage takers, so they can hire as many or as few workers as they would like at the market wage. 16. Which of the following is a firm's demand for labor? A) The firm's marginal factor cost (MFC) curve. B) The firm's long-run average total cost (LRATC) curve. C) The firm's marginal revenue product of labor curve. D) The firm's marginal revenue (MR) curve. E) The firm's marginal revenue product of capital (MRPK) curve. Show Answer Correct Answer: C) The firm's marginal revenue product of labor curve. 17. If the government sets a minimum wage above equilibrium wage in a perfectly competitive factor market, which of the following is most likely to happen: A) The quantity of labor demanded will far exceed the supply of labor. B) Unemployment will rise because companies will reduce hiring low wage workers. C) There will be a shortage of workers in the factor market. D) Wages will fall for company CEOs. . Show Answer Correct Answer: B) Unemployment will rise because companies will reduce hiring low wage workers. 18. Dunder Mifflin employs paper sales reps in a perfectly competitive market. Which of the following will happen in the market for paper sales reps in the short run if the demand for paper increases? A) The supply curve of paper sales reps will shift to the right. B) The supply curve of paper sales reps will shift to the left. C) The demand curve for paper sales reps will shift to the right. D) The demand curve for paper sales reps will shift to the left. E) Neither the demand curve nor the supply curve of paper sales reps will shift. Show Answer Correct Answer: C) The demand curve for paper sales reps will shift to the right. 19. The profit a firm receives from an additional unit of labor is: A) The workers's wage plus the workers' contributions to revenues. B) The workers's contributions to revenue minus the worker's wages. C) The workers' contributions to revenue minus the workers' benefits. D) The workers' wages minus the workers' contributions to costs. Show Answer Correct Answer: B) The workers's contributions to revenue minus the worker's wages. 20. The least cost rule is ..... A) MPx/Px = MPy/Py. B) MPx + MPy =1. C) MPx/MPy. D) MPx-MPy/Mpy. Show Answer Correct Answer: A) MPx/Px = MPy/Py. ← PreviousNext →Related QuizzesMicroeconomics QuizzesEconomics QuizzesFactor Markets Quiz 1Factor Markets Quiz 3Factor Markets Quiz 4 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books