This quiz works best with JavaScript enabled. Home > Economics > Microeconomics > Factor Markets > Factor Markets – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Factor Markets Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. All of the following are shifters for the demand for labor EXCEPT: A) Price of an inferior good. B) Price of the product. C) Productivity of the worker. D) Change in price of substitute goods or complementary goods. . Show Answer Correct Answer: A) Price of an inferior good. 2. Factor Markets designate A) Productivity. B) Input. C) Price. D) Output. Show Answer Correct Answer: B) Input. 3. If hot dogs are an inferior good, an increase in income will result in A) An increase in the quantity demanded for hot dogs. B) An increase in the demand for hot dogs. C) A decrease in the quantity demanded for hot dogs. D) A decrease in the demand for hot dogs. Show Answer Correct Answer: D) A decrease in the demand for hot dogs. 4. In a perfectly competitive labor market. If all other factors remain constant, an increase in the demand for the firms' product will result in which of the following changes in the labor market? A) The demand curve for labor will shift to the right. B) The supply curve for labor will shift to the right. C) The supply curve for labor will shift to the left. D) The demand curve for labor will shift to the left. Show Answer Correct Answer: A) The demand curve for labor will shift to the right. 5. Dunder Mifflin is a perfectly competitive firm. The table shows their short-run output. What is the marginal revenue product of the third worker hired if the price of the product is $ 20? A) $ 40. B) $ 48. C) $ 160. D) $ 240. E) $ 300. Show Answer Correct Answer: C) $ 160. 6. Dunder Mifflin's demand for labor is known as derived demand because: A) Dunder Mifflin will benefit from hiring additional labor. B) Dunder Mifflin gains utility from hiring more labor. C) The amount of labor demanded depends on demand for Dunder Mifflin's product. D) The wage rate paid to workers depends on the demand for labor. E) The amount of labor demanded depends on the amount of capital invested. Show Answer Correct Answer: C) The amount of labor demanded depends on demand for Dunder Mifflin's product. 7. The marginal revenue product of labor is the: A) Produce price times the wage rate. B) Marginal revenue plus product price. C) Increase in the price of labor when the firm employs an additional unit of labor. D) Increase in the average product of labor when the firm employs an additional unit of labor. E) Additional revenue a firm earns when it employs an additional unit of labor. Show Answer Correct Answer: E) Additional revenue a firm earns when it employs an additional unit of labor. 8. What is the term for any amount above the minimum needed to bring a resource into use? A) Economic profit. B) Producer surplus. C) Consumer surplus. D) Economic rent. Show Answer Correct Answer: D) Economic rent. 9. Choose the correct factor payments for land, labor, capital, and entrepreneurship. A) Rent, wage, interest, and profit. B) Rent, pay, revenue, and money. C) Real estate, workers, interest, and cash. D) Rent, pay, interest, and capital . Show Answer Correct Answer: A) Rent, wage, interest, and profit. 10. Assume that capital and labor are the only two inputs used by Dunder Mifflin. To minimize costs at the current output level, Dunder Mifflin should change the hiring of capital and labor in which of the following ways? A) There should be no change to the quantity of capital or labor hired. B) The amount of capital hired should increase, and the amount of labor hired should increase. C) The amount of capital hired should decrease, and the amount of labor hired should decrease. D) The amount of capital hired should increase, and the amount of labor hired should decrease. E) The amount of capital hired should decrease, and the amount of labor hired should increase. Show Answer Correct Answer: D) The amount of capital hired should increase, and the amount of labor hired should decrease. 11. Compared to a competitive labor market a monopsony employs A) More workers at a higher wage. B) More workers at a lower wage. C) Less workers at a lower wage. D) Less workers at a higher wage. Show Answer Correct Answer: C) Less workers at a lower wage. 12. Assume a perfectly competitive labor market. Which of the following correctly describes the individual firm's demand curve for labor and the market demand curve for labor, respectively? A) Downward sloping; downward sloping. B) Horizontal; downward sloping. C) Horizontal; horizontal. D) Downward sloping; horizontal. Show Answer Correct Answer: A) Downward sloping; downward sloping. 13. If a large number of unskilled workers enter the labor market, which of the following is most likely to occur in the labor market for unskilled workers? A) The supply curve will shift to the right, pushing the wage down. B) The supply curve will shift to the left, pushing the wage up. C) The demand curve will shift to the right, pusing wage up. D) The demand curve will shift to the left, pushing the wage down. Show Answer Correct Answer: A) The supply curve will shift to the right, pushing the wage down. 14. Economics argue that most top-selling music artists earn economic rent because they: A) Work less than 40 hours per week when they are on tour. B) Perform at concerts only about six months during a year. C) Make additional income through commercial endorsements of products. D) Are able to make music for only a limited number of years before changing occupations. E) Earn far more as musicians than they could earn in their next-best occupation. Show Answer Correct Answer: E) Earn far more as musicians than they could earn in their next-best occupation. 15. In a perfectly competitive labor market, the individual firm's ..... is perfectly elastic. A) MRC. B) MRP. C) MP. D) Market supply. Show Answer Correct Answer: A) MRC. 16. Profit maximizing firms will hire additional units of an input until A) MRP=MFC. B) MRP=MC. C) MR=MFC. D) W=MFC. E) MR=MC. Show Answer Correct Answer: A) MRP=MFC. 17. The graph shows the marginal revenue product (MRP) and the market wage rate for Dunder Mifflin, a profit-maximizing firm. Which of the following is true of Dunder Mifflin's hiring of labor? A) It should hire 18 workers. B) It should hire between 8 and 18 workers. C) It should hire 8 workers. D) It should hire between 3 and 8 workers. E) It should hire 3 workers. Show Answer Correct Answer: A) It should hire 18 workers. 18. What are the three productive resources focused on in factor markets? A) Land, labor, and capital. B) Technology, labor, and land. C) Goods, services, and capital. D) Labor, capital, and goods. Show Answer Correct Answer: A) Land, labor, and capital. 19. A firm's desire to hire workers and to sell products is driven by: A) The desire of the firm to raise revenue. B) The desire of the firm to limit costs. C) The desire of the firm to maximize sales. D) The desire of the firm to maximize profit. Show Answer Correct Answer: D) The desire of the firm to maximize profit. 20. Dunder Mifflin, in a monopsonistic labor market, will continue to hire workers until the MRP of labor: A) Equals MRC, resulting in more workers being hired @ a lower wage. B) Equals MRC, resulting in fewer workers being hired @ a lower wage. C) Equals MRC, resulting in fewer workers hired @ a higher wage. D) Is less than MRC, resulting in more workers being hired @ a lowe rwage. E) Is less than MRC, resulting in fewer workers being hired @ a lower wage. Show Answer Correct Answer: B) Equals MRC, resulting in fewer workers being hired @ a lower wage. ← PreviousNext →Related QuizzesMicroeconomics QuizzesEconomics QuizzesFactor Markets Quiz 1Factor Markets Quiz 2Factor Markets Quiz 4 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books