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ECO 365T Assignment Week 5 Practice The Microeconomics of Resource Markets and Trade Quiz
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ECO 365T Assignment Week 5 Practice The Microeconomics of Resource Markets and Trade Quiz

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ECO 365 Assignment Week 5 Practice: The Microeconomics of Resource Markets and Trade Quiz Note: You have unlimited attempts available to complete practice assignments. The highest scored attempt will be recorded. These assignments have earlier due dates, so plan accordingly. Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after the due date. Which of the following scenarios would lead to a decrease in the demand for labor at Stephanie’s earring shop? Labor productivity increases. The cost of capital (a substitute for labor) decreases. The price of earrings increases. The wage rate increases. Which of the following scenarios would lead to an increase in the demand for mixers at Henry’s bread bakery? The market price of mixers decreases. The productivity of mixers decreases. The wage rate of labor (a substitute for capital) decreases. The market price of bread increases. Instructions: Enter your answers as a whole number. Henry’s Bakery and Revenues Capital (mixers) Total Product (loaves of bread) Marginal Product (loaves of bread) Price (dollars) Total Revenue (dollars) Marginal Revenue Product (dollars) 0 0 — $4 $0 — 1 8 8 4 32 $ 32 2 20 12 4 80 48 3 28 8 4 112 32 4 34 6 4 136 24 5 38 4 4 152 16 6 40 2 4 160 8 7 41 1 4 164 4 The marginal revenue product schedule is rev: 06_21_2018 Multiple Choice upsloping. the same whether the firm is selling in a purely competitive or imperfectly competitive market. the firm’s resource demand schedule. the firm’s resource supply schedule. Marginal product is rev: 06_21_2018 Multiple Choice the output of the least skilled worker. the amount an additional worker adds to the firm’s total output. the amount any given worker contributes to the firm’s total revenue. a worker’s output multiplied by the price at which each unit can be sold. The change in a firm’s total revenue that results from hiring an additional worker is measured by the rev: 06_21_2018 Multiple Choice marginal product. average revenue product. marginal revenue. marginal revenue product. Marginal revenue product measures the rev: 06_21_2018 Multiple Choice increase in total revenue resulting from the production of one more unit of a product. increase in total resource cost resulting from the hire of one extra unit of a resource. amount by which the extra production of one more worker increases a firm’s total revenue. decline in product price that a firm must accept to sell the extra output of one more worker. If the marginal revenue product (MRP) of labor is less than the wage rate rev: 06_21_2018 Multiple Choice more labor should be employed. the firm is making profits. the firm is incurring losses. less labor should be employed. A profit-maximizing firm employs resources to the point where rev: 06_21_2018 Multiple Choice MRP = MRC. resource price equals product price. MRC = MP. MP = product price. The following is a total-product schedule for a resource. Assume that the quantities of other resources the firm employs remain constant. Units of Resource Total Product 1 24 2 42 3 54 4 64 5 72 If the firm’s product sells for a constant $2 and the price of the resource is a constant $16, the firm will employ how many units of the resource? rev: 06_21_2018 Multiple Choice 2 3 4 5 Marginal resource cost is rev: 06_21_2018 Multiple Choice the increase in total resource cost associated with the production of one more unit of output. total resource cost divided by the number of inputs employed. the change in total revenue associated with the employment of one more unit of the resource. the increase in total resource cost associated with the hire of one more unit of the resource. Daphne has received job offers in six different cities across the United States. The table below shows the nominal wage she is being offered in each city and the average monthly rent for an apartment in each city. Calculate Daphne’s real wage in terms of how many months of rent her wage could purchase in each city and complete the “Real Wage” column in the table below. Instructions: Enter your answers rounded to the nearest whole number. Daphne’s Nominal and Real Wages City Nominal Salary (dollars) Monthly Rent (dollars) Real Wage (months of rent) Atlanta $50,000 $1,200 42 ± 1% Austin 50,500 1,368 37 ± 1% Chicago 65,000 1,920 34 ± 1% Lincoln 45,000 840 54 ± 1% Madison 48,000 1,164 41 ± 1% New York 95,000 3,204 30 ± 1% In which city is the nominal wage highest? New York In which city is the real wage highest? Lincoln Which of the following scenarios would result in an increase in the wage rate of solar panel installers and a decrease in the quantity of solar panel installers employed in Billy’s town? A decrease in people’s income decreases the demand for solar panels. A solar panel company shuts down in another town and solar panel installers try to find jobs in Billy’s town. Wages of solar panel installers increase in another town and attract workers away from Billy’s town. An increase in the demand for solar panels raises the price of each installation. The marginal revenue product of an input tends to decrease as rev: 06_13_2018 Multiple Choice more of the input is used. productivity increases. the price of the input decreases. the price of output increases. Rising wages can be explained by which of the following? rev: 06_13_2018 Multiple Choice Labor demand increases more rapidly than labor supply. Labor supply is highly sensitive to changes in labor productivity. Labor supply increases more rapidly than labor demand. Labor demand is stable and predictable. Suppose two workers can harvest $46 and three workers can harvest $60 worth of apples per day. On the basis of this information we can say that the rev: 06_13_2018 Multiple Choice marginal revenue product of each of the first two workers is $23. marginal revenue product of the third worker is $14. marginal product of each of the first two workers is 23. third worker should not be hired. A characteristic of a competitive labor market is rev: 06_13_2018 Multiple Choice an overall reduction in employment due to firms having market power. an equilibrium wage and quantity supplied. high levels of unemployment. labor supply changing as the wage changes. Labor productivity and the price of the good being produced are two variables that contribute to rev: 06_13_2018 Multiple Choice the demand for the product. the wage rate. the marginal product. whether or not a union forms. As the real wage decreases, the quantity of labor demanded ______ and the quantity of labor supplied _______. rev: 06_13_2018 Multiple Choice increases; decreases decreases; increases increases; increases decreases; decreases An inclusive union rev: 06_13_2018 Multiple Choice organizes a wide range of workers in an industry to gain bargaining power. is most effective in a purely competitive industry. restricts supply of labor through licensing requirements. is most concerned with increasing the demand for workers in an industry. The supply curve for labor in a purely competitive market slopes upward because rev: 06_13_2018 Multiple Choice higher wages must be paid to bid workers away from other opportunities. marginal resource cost rises as productivity increases. the marginal product of labor falls as output increases. the wage rate paid to workers falls as more are hired. Compared to a competitive labor market, workers participating in an inclusive union will enjoy rev: 06_13_2018 Multiple Choice higher wages and more workers employed. higher wages and fewer workers employed. similar outcomes with respect to pay and employment. lower pay and more workers employed. The concept of “wages” does not include which of the following items? rev: 06_13_2018 Multiple Choice money spent by workers direct money payments, like salaries and commissions bonuses and royalties earned fringe benefits, like health insurance and paid leave Use the following graph (where L is the quantity of labor) to answer the next question. It shows a firm that buys its inputs and sells its output in competitive markets. If the firm develops a new technology that increases labor productivity, the equilibrium level of employment for this firm is expected to be rev: 06_13_2018 Multiple Choice lower than L0. L0. zero. higher than L0. The individual firm that hires labor under competitive conditions faces a labor supply curve that rev: 06_13_2018 Multiple Choice is horizontal, because individual firms have no control over wages. slopes upward to the right. is vertical, because workers need a job at any wage. slopes downward to the right. In a purely competitive labor market, a profit-maximizing firm will hire labor up to the point where the marginal revenue product of labor equals the rev: 06_13_2018 Multiple Choice marginal cost of one extra unit of output. price of the product. average cost of each unit of output. wage rate, or the price of labor. For each of the following scenarios, determine which benefit of international trade applies: lower-priced goods, increased variety of products, or access to scarce resources. Today most television sets bought in the United Stated are made in China; however, this was not the case twenty years ago. In large grocery stores in the United States, consumers can buy noodles from Asia, soups from France, pickled herring from Scandinavia, and beer from Germany. Increased variety of products The United States has become a prime location for producers of semiconductors, whose products are then exported to nations around the world. This choice to produce in the United States is largely due to the access to the high-skilled workforce that is required for this type of production. While many developed nations have at least one domestic car manufacturer, consumers in these nations also have access to cars produced in other nations. The United States has long been the world’s largest exporter of wheat. The access to vast, fertile, and highly productive soil combined with high-technology farming practices have made the United States a very cost-efficient producer of agricultural goods. In economics, goods, services, or resources produced domestically and sold abroad are known as: imports. net exports. exports. international trade. Domestic producers might oppose free trade agreements because rev: 06_20_2018 Multiple Choice there could be a decrease in consumer surplus. there could be an increase in consumer surplus. there could be a decrease in producer surplus. there could be an increase in producer surplus. The principal concept behind comparative advantage is that a nation should rev: 06_20_2018 Multiple Choice concentrate production on those products for which it has the lowest domestic opportunity cost. strive to be self-sufficient in the production of essential goods and services. maximize its volume of trade with other nations. use tariffs and quotas to protect the production of vital products for the nation. Use the following table for a certain product’s market in Marketopia to answer the next question. Quantity Demanded Domestically Price Quantity Supplied Domestically 1,400 $10 2,200 1,600 9 2,000 1,800 8 1,800 2,000 7 1,600 2,200 6 1,400 2,400 5 1,200 If Marketopia is entirely closed to international trade, the equilibrium price and quantity would be rev: 06_20_2018 Multiple Choice $6 and 1,400 units. $9 and 2,000 units. $7 and 2,000 units. $8 and 1,800 units. Benefits from international trade are not based on differences in rev: 06_20_2018 Multiple Choice resource availability. technological capabilities. product quality and other attributes. income levels. Limits on the quantity or total value of specific products imported to a nation are rev: 06_20_2018 Multiple Choice import quotas. nontariff barriers. protective tariffs. export subsidies. Governments often intervene in international trade and impose quotas to rev: 06_20_2018 Multiple Choice improve the performance of multinational corporations. shift a nation’s production possibilities frontier. increase revenues from export subsidies. protect domestic industries from foreign competition. An import quota on a product reduces the quantity of the product imported and rev: 06_20_2018 Multiple Choice will not affect the price of the product to the consumers. increases the total quantity of the product consumed. decreases the price of the product to the consumers. increases the price of the product to the consumers. Tariffs rev: 06_20_2018 Multiple Choice are excise taxes on goods exported abroad. are per-unit subsidies designed to promote exports. may be imposed either to raise revenue or to shield domestic producers from foreign competition. are also called import quotas. Which of the following is the most likely reason for countries to engage in international trade based upon specialization of production? rev: 06_20_2018 Multiple Choice Relative inflation rates Comparative advantage Relative exchange rates Relative levels of GDP The slopes of the production possibilities curves for two nations reflect the rev: 06_20_2018 Multiple Choice relative prices of the resources in the two nations. average income levels in the two nations. amounts of imports and exports of the two nations. opportunity costs of production in the two nations. If a nation imposes a tariff on an imported product, then that nation will experience a(n) rev: 06_20_2018 Multiple Choice decrease in quantity supplied and an increase in the price of the product. decrease in demand and a decrease in the price of the product. decrease in the supply of, and an increase in the quantity demanded of, the product. increase in the quantity supplied of, and a decrease in the price of the product. A tariff is a rev: 06_20_2018 Multiple Choice quantity limit. tax. price ceiling. subsidy. A tax imposed by the U.S. government on imported Chinese frozen shrimp would be an example of rev: 06_20_2018 Multiple Choice a voluntary restriction. a regulatory trade restriction. a tariff. a quota. A maximum limit set on the amount of a specific good that may be imported into a country over a given period of time is called a rev: 06_20_2018 Multiple Choice voluntary export restriction. tariff. quota. nontariff barrier. When a nation removes tariffs on imported products that nation will rev: 06_20_2018 Multiple Choice experience lower prices and consume lower quantities. experience higher prices and consume lower quantities. experience higher prices and consume higher quantities. experience lower prices and consume higher quantities. The ratio at which nations will exchange one product for another is known as the rev: 06_20_2018 Multiple Choice exchange rate. discount rate. terms of trade. balance of trade. The higher price of imported products due to trade barriers causes some consumers to shift their purchases to a domestically produced product that is now rev: 06_20_2018 Multiple Choice higher in price because import competition has risen. higher in price because import competition has declined. lower in price because import competition has declined. lower in price because import competition has risen. The use of tariffs and quotas for trade protection results in rev: 06_20_2018 Multiple Choice less rent-seeking activity. lower prices for domestic consumers. less efficiency in the economy. less revenue for the government. When a nation removes restrictions on imported products that nation will rev: 06_20_2018 Multiple Choice experience higher prices and consume lower quantities. experience lower prices and consume lower quantities. experience lower prices and consume higher quantities. experience higher prices and consume higher quantities. The benefit of saving some American jobs in specific industries protected from foreign competition rev: 06_20_2018 Multiple Choice is much greater than the costs to the whole American economy. has risen in recent years. is much less than the costs to the whole American economy. has fallen in recent years. Assume that a tariff is imposed on an imported product. The difference between the domestic price and the world price is captured by rev: 06_20_2018 Multiple Choice the government. domestic producers. foreign exporters. domestic consumers. Refer to the production possibility curve for Marketopia below. The graph indicates that with the resources and technology it has available, Marketopia rev: 06_20_2018 Multiple Choice can produce either 40 units of rye or 20 units of eggs. cannot produce both 20 units of rye and 5 units of eggs. cannot produce both 20 units of rye and 10 units of eggs. can produce both 40 units of rye and 20 units of eggs.

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