MCQOPTIONS
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MCQOPTIONS
This section includes 15 Mcqs, each offering curated multiple-choice questions to sharpen your Economics knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Which of the following is not true with regard to workers who have a high value of marginal product? These workers ? |
| A. | have skills that are in relatively scarce supply |
| B. | produce output for which there is great demand |
| C. | usually have little capital with which to work |
| D. | are usually highly paid |
| Answer» D. are usually highly paid | |
| 2. |
When capital is owned by the firm as opposed to being directly owned by household capital income may take any of the following forms except ? |
| A. | interest |
| B. | dividends |
| C. | increases in stocks of goods |
| D. | retained earnings |
| Answer» D. retained earnings | |
| 3. |
What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry ? |
| A. | increase the demand for fishing boats and decrease rental rates on fishing boats |
| B. | decreases the demand for fishing boats and increase rental rates on fishing boats. |
| C. | decreases the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry |
| D. | increase the demand for fishing boats and increase rental rates on fishing boats |
| Answer» D. increase the demand for fishing boats and increase rental rates on fishing boats | |
| 4. |
The value of the marginal product of labor is ? |
| A. | the price of the output times wage of labor |
| B. | the price of the output times the marginal product of labor |
| C. | none of these answers |
| D. | the wage of labor times the quantity of labor |
| E. | the wage of labor times the marginal product of labor |
| Answer» C. none of these answers | |
| 5. |
The most important factors of production are ? |
| A. | labor, land, and capital |
| B. | water, earth and knowledge |
| C. | money, stocks and bonds. |
| D. | management finance and marketing |
| Answer» B. water, earth and knowledge | |
| 6. |
If both input and output markets are competitive and firms are profit maximizing, then in equilibrium each factor of production earns ? |
| A. | an amount equal to the price of output times total output |
| B. | the amount allocated by the political process |
| C. | an equal share of output |
| D. | the value of its marginal product |
| Answer» E. | |
| 7. |
If a factor exhibits diminishing marginal product, hiring additional units of the factor will ? |
| A. | cause a reduction is output |
| B. | have no effect on output |
| C. | increase the marginal product of the factor |
| D. | generate ever smaller amounts of output |
| Answer» E. | |
| 8. |
For a competitive profit-maximizing firm, the value-of-the-marginal-product curve for capital is the firm’s ? |
| A. | supply curve of capital |
| B. | demand curve for capital |
| C. | production function |
| D. | marginal cost curve |
| Answer» C. production function | |
| 9. |
An individual firm’s demand for a factor of production ? |
| A. | Slopes downward because an increase in the production of output reduces the price at which the output can be sold in a competitive market, thereby red |
| B. | Slopes downward due to the factor’s diminishing marginal product |
| C. | slopes upward due to the factor’s increasing marginal product |
| D. | is perfectly elastic (horizontal) if the factor market is perfectly competitive |
| Answer» C. slopes upward due to the factor’s increasing marginal product | |
| 10. |
An increase in the price of automobiles shifts the demand for autoworkers to the ? |
| A. | left and decreases the wage |
| B. | right and decreases the wage |
| C. | right and increases the wage |
| D. | left and increases the wage |
| Answer» D. left and increases the wage | |
| 11. |
An increase in the demand for apples will cause all but which of the following ? |
| A. | a decrease in the number of apple pickers employed |
| B. | an increase in the value of the marginal product of apple pickers |
| C. | an increase in the price of apples |
| D. | an increase in the wage of apple pickers |
| Answer» B. an increase in the value of the marginal product of apple pickers | |
| 12. |
An increase in the demand for a firm’s output ? |
| A. | decrease the prosperity of the firm but increases the prosperity of the factors hired by the firm |
| B. | decreases the prosperity of both the firms and the factors hired by the firm. |
| C. | increases the prosperity of both the firm and the factors hired by the firm. |
| D. | increases the prosperity of the firm but decreases the prosperity of the factors hired by the firm. |
| Answer» D. increases the prosperity of the firm but decreases the prosperity of the factors hired by the firm. | |
| 13. |
A decrease in the demand or fish ? |
| A. | decrease the value of the marginal product of fishermen reduces their wage, and reduces employment in the fishing industry |
| B. | increase the value of the marginal product of fishermen increase their wage, and increase employment in the fishing industry. |
| C. | decrease the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry |
| D. | increase the value of the marginal product of fishermen increase their wage and decreases employment in the fishing industry |
| Answer» D. increase the value of the marginal product of fishermen increase their wage and decreases employment in the fishing industry | |
| 14. |
A decrease in the supply of farm tractors will cause all but which of the following ? |
| A. | an increase in the rental rate for tractor |
| B. | a decrease in the rental rate of farmland |
| C. | a decrease in the value of the marginal product of tractors |
| D. | an increase in the wage of farm workers |
| Answer» E. | |
| 15. |
A competitive profit-maximizing firm should hire workers up to the point where ? |
| A. | the wage, the rental price of capital and the rental price of land are all equal |
| B. | the marginal product of labor equals zero and the production function is maximized |
| C. | the value of the marginal product of labor equals the wage |
| D. | the marginal product of labor equals the wage |
| Answer» D. the marginal product of labor equals the wage | |