04 Jun Question 11. If the firm and union agreed to a wage of w , the firm would employ 1a. 0Q . 2b. 0Q . 3c. 0Q . 4d. 0Q .
Question
11. If the firm and union agreed to a wage of w , the firm would employ 1a. 0Q . 2b. 0Q . 3c. 0Q . 4d. 0Q .
12. The firm in the diagram sells its output in a. a competitive market. b. a monopolistic market. c. a monopsonistic market d. it is impossible to determine.
ECON 3070 Intermediate Microeconomic Theory: Practice Multiple-Choice Questions 46
13. That the perfectly competitive firm will pick a combination of inputs where the ratio of each input’s marginal product to its price is equal follows from a. the need to use inputs in fixed proportions. b. the backward bending supply curve of labor. c. cost minimization. d. the attempt to achieve a target rate of return. e. the interaction of demand and supply.
14. The profit-maximizing, perfectly competitive firm will employ each input in an amount such that a. the marginal product of each input is equal. b. the marginal product of each input is zero. c. the input price equals the input’s marginal product divided by the product price. d. the marginal product of the input equals the input price multiplied by the firm’s marginal revenue. e. the input price equals the input’s marginal product multiplied by the product price.
15. Sam’s Furniture Manufacturing Company is producing rocking chairs and wishes to expand. It is currently selling these chairs at $45 wholesale. The marginal product of adding another worker is 2 per week. What is the value of marginal product of adding another worker? a. $22.50 b. $45 c. $90 d. $2 e. Cannot be determined from the information provided.
16. If an additional worker costs you $15 per hour, and that person can add 25 units of output to the firm, you should hire that person as long as a. 25 remains above $15. b. 25/$15 is greater than zero. c. $15/25 is great than zero. d. the value of the marginal product is above $15. e. None of the above.
17. Which of the following would cause the demand curve for an input to shift? a. A change in technology. b. A change in demand for the product being produced. c. An increase in the number of firms in the industry. d. All of the above.
18. When a firm has several variable inputs, the demand for any one of them is a. the value of marginal product curve. b. composed of two points along a shifting VMP curve. c. undefined for a single input. d. the vertical summation of the demand for all inputs. e. None of the above.
Questions 19 and 20 are based on the following data, which are for a pumpkin farmer who can hire pumpkin pickers at $9 per day. Number of Pickers Value of Pumpkin Output
1 $30
248
362
472
580
684
787
889
990
10 90
19. The profit-maximizing farmer should hire a. one pumpkin picker because his or her contribution to output is greatest. b. three pumpkin pickers because the fourth costs more than he or she earns. c. four pumpkin pickers because the fifth costs more than he or she earns. d. nine pumpkin pickers because the value of the marginal product of the tenth picker is zero. e. ten pumpkin pickers because costs will equal revenue.
20. The Great Pumpkin, in an attempt to make the pumpkin pickers better off, legislates that pumpkin pickers must be paid a wage no less than $15 per day. If our profit-maximizing farmer complies, which of the following will be correct? 1. Each of the pumpkin pickers our farmer had previously hired will become better off. 2. The value of the average product of labor will rise. 3. The quantity of pumpkin output will fall.
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