Penn ECON102 Quiz 6

Question 1

The factors of production are

the outputs resulting from a production process

the incomes paid to the owners of land and capital

the inputs used in the production of goods and services

entrepreneurship, land, wages and machinery

Question 2

If the wage is larger than the marginal revenue product of labor then the profit maximizing firm will

reduce the amount of workers hired

increase the amount of workers hired

leave the number of workers hired unchanged

reduce the wage

Question 3

The graph above represents

the marginal product of labor

the average cost of production

the marginal revenue product of labor

the marginal cost of production

This is a graph of the marginal product of labor since output (Q) is on the vertical axis.

Question 4

Consider the table above. What is the marginal profit of the 2nd worker?

$60

$10

$6

$30

Question 5

Consider the table above. What is the marginal product of the 5th worker?

2

3

5

20

Question 6

The marginal product of labor eventually slopes downward due to

diminishing marginal costs

diminishing average returns

diminishing marginal utility

the law of diminishing marginal productivity

Question 7

This year a large number of Canadians immigrated to the United States. What has happened to the labor supply for both countries?

The labor supply for both countries increased

The labor supply for Canada decreased and for the U.S. the labor supply increased

The labor supply for Canada increased and for the U.S. the labor supply decreased

The labor supply for both countries decreased

Question 8

A pure rent is

the return paid to land

the return paid to land and capital

the return paid to a factor of production that is fixed in supply

the return paid to capital

Question 9

When a firm is hiring capital, labor and land for its production process, the cost minimization condition is

PL = PK=PA

MPL = MPK = MPA

MPL/PL = MPK/PK=MPA/PA

all of the above are equivalent

Question 10

Input demand curves slope downward due to the

output effect of a factor price increase

factor substitution effect

output effect of a factor price decrease

all of the above