Trivia Quiz: The Laws Of Economics
There are some sets of rules governing a lot of things in our lives, and when it comes to different disciplines, some of these laws help us to understand some concepts. The quiz below is part 2 of a series of tests that are designed to help us see how well we know the laws of economics. Why don’t you try it out!
- 1.Resource pricing is important because:
- A.
Resource prices are a major determinant of money incomes.
- B.
Resource prices allocate scarce resources among alternative uses.
- C.
Resource prices, along with resource productivity, are important to firms in minimizing their costs
- D.
All of these reasons.
- 2.The demand for airline pilots results from the demand for air travel. This fact is an example of:
- A.
Resource substitutability.
- B.
Rising marginal resource cost.
- C.
Elasticity of resource demand.
- D.
The derived demand for labor.
- 3.Marginal revenue product measures the:
- A.
Amount by which the extra production of one more worker increases a firm's total revenue.
- B.
Decline in product price that a firm must accept to sell the extra output of one more worker.
- C.
Increase in total resource cost resulting from the hire of one extra unit of a resource.
- D.
Increase in total revenue resulting from the production of one more unit of a product.
- 4.The MRP curve for labor:
- A.
Intersects the firm's labor demand curve from above.
- B.
Is the firm's labor demand curve
- C.
Lies below the firm's labor demand curve.
- D.
Lies above the firm's labor demand curve.
- 5.A competitive employer should hire additional labor as long as:
- A.
The MRP exceeds the wage rate.
- B.
The wage rate is less than MP.
- C.
Average product exceeds MP.
- D.
MC exceeds MR.
- 6.Assume the Apex Manufacturing Company is purely competitive in both the hiring of labor and in the sale of its product. Apex's labor demand curve would be:
- A.
Vertical at the current level of employment.
- B.
Horizontal at the "going" wage rate.
- C.
Upward sloping.
- D.
Downward sloping
- 7.Answer the next question(s) on the basis of the following information for Manfred's Shoe Shine Parlor. Assume Manfred hires labor, its only variable input, under purely competitive conditions. Shoe shines are also sold competitively.Units Total Product Marginal Product Total Revenue0 0 1 14 14 422 103 30 904 355 39 1176 1267 44 2 132Refer to the above data. What is the marginal product of the sixth worker?
- A.
2 Units
- B.
3 Units
- C.
4 Units
- D.
5 Units
- 8.Assuming a firm is selling its output in a purely competitive market, its resource demand curve can be determined by:
- A.
Multiplying total product by product price.
- B.
Multiplying marginal product by product price.
- C.
Dividing total revenue by marginal product.
- D.
Comparing marginal product with various possible input prices.
- 9.Answer the next question(s) on the basis of the data contained in the following table. Assume that the firm is hiring labor in a purely competitive market.Units of Labor Total Product Product Price0 0 2.201 15 2.002 28 1.803 39 1.604 48 1.405 55 1.206 60 1.10
- A.
5
- B.
4
- C.
3
- D.
2
- 10.Other things equal, the resource demand curve of an imperfectly competitive seller will:
- A.
. lie below its marginal revenue product curve.
- B.
Be subject to increasing marginal productivity.
- C.
Be less elastic than that of a purely competitive seller.
- D.
Be more elastic than that of a purely competitive seller
- 11.The change in a firm's total revenue that results from hiring an additional worker is measured by:
- A.
. marginal product.
- B.
Marginal revenue
- C.
Marginal revenue product.
- D.
Average revenue product.
- 12.A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired; 32 when two workers are hired; 37 when three are hired; and 40 when four are hired. The farmer's product sells for $3 per unit and the wage rate is $13 per worker.Refer to the above information. The marginal product of the second worker is:
- A.
24
- B.
8
- C.
5
- D.
1
- 13.A firm is hiring the profit-maximizing amount of an input when:
- A.
AVC = MC.
- B.
MP = MRC.
- C.
MRC = MR.
- D.
MRP = MRC
- 14.Which of the following will not cause a shift in the demand for resource X?
- A.
A decline in the price of resource X
- B.
An increase in the price of the product resource X is producing
- C.
A decrease in the price of substitute resource Y
- D.
An increase in the productivity of resource X
- 15.A change in the price of an input will usually:
- A.
Shift a firm's cost curves.
- B.
Cause the firm to alter the combination of inputs it employs.
- C.
Induce the firm to change its level of output.
- D.
Do all of these.
- 16.If the nominal wages of carpenters rose by 5 percent in 2008 and the price level increased by 3 percent, then the real wages of carpenters:
- A.
Decreased by 2 percent.
- B.
Increased by 2 percent.
- C.
Increased by 3 percent.
- D.
Increased by 8 percent.
- 17.Which of the following is correct?
- A.
The nominal wage may fall, but the real wage can never decline.
- B.
The real wage may fall, but the nominal wage can never decline.
- C.
Both the nominal and the real wage must always rise.
- D.
The nominal and the real wage may both fall
- 18.Marginal revenue product (MRP) of labor refers to the:
- A.
Increase in total revenue resulting from the sale of an additional unit of output.
- B.
Amount by which a firm's total resource cost increases when it employs one more unit of labor.
- C.
Increase in total revenue resulting from the hire of one more unit of labor.
- D.
Price at which additional units of labor can be employed in a monopsonized labor market.
- 19.A profit-maximizing firm will:
- A.
Expand employment if marginal revenue product exceeds marginal resource cost.
- B.
Reduce employment if marginal revenue product exceeds marginal resource cost.
- C.
Expand employment if marginal revenue product equals marginal resource cost.
- D.
Reduce employment if marginal revenue product equals marginal resource cost.
- 20.Unit of Labor Wage Rate MRC MRP1 8 8 122 8 8 103 8 8 84 8 8 65 8 8 4
- A.
2 units of labor.
- B.
3 units of labor.
- C.
4 units of labor.
- D.
5 units of labor.
- 21.The individual firm in a purely competitive labor market faces:
- A.
A perfectly elastic labor supply curve and a downsloping labor demand curve.
- B.
A perfectly elastic labor demand curve and an upsloping labor supply curve.
- C.
Labor demand and labor supply curves both of which are perfectly elastic.
- D.
A downsloping labor demand curve and an upsloping labor supply curve.
- 22.Qty of Labor Total Product Total Revenue1 4 162 8 323 11 444 13 52 5 14 56
- A.
$2
- B.
$3
- C.
$4
- D.
$16
- 23.The economic term for a sole employer in a nonunion community is:
- A.
Monopsonist.
- B.
Monopolist.
- C.
Bilateral competitor.
- D.
Bilateral monopolist.
- 24.A monopsonist's wage cost in hiring an additional worker is the:
- A.
Worker's wage rate.
- B.
Worker's wage rate plus the wage increases paid to all workers already employed.
- C.
Worker's wage rate adjusted for the lower price that must be charged for the extra output.
- D.
Marginal wage cost less the wage rate.
- 25.The United Mine Workers is a good illustration of:
- A.
How unions have increased wages but reduced job opportunities by shifting the supply-of-labor curve to the left.
- B.
How unions have raised wages and increased job opportunities by increasing the demand for labor.
- C.
Inclusive unionism.
- D.
Exclusive unionism.
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