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Markets for Labor, Capital, and Land MCQ

Markets for Labor, Capital, and Land MCQ

1. If a firm must borrow funds to acquire capital, it will have to pay back those funds plus an extra amount known as ______.

Answer

Correct Answer: Interest

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2. According to the marginal productivity theory of income distribution, each person receives payment equal to ______.

Answer

Correct Answer: The contribution to production made by the factor he or she owns

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3. With a factor of production that has a fixed supply, such as land, how is the supply curve affected when the price increases?

Answer

Correct Answer: It does change.

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4. What is meant by “featherbedding” in terms of union employment?

Answer

Correct Answer: Adding workers who may not be necessary

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5. What is the importance of the Wagner Act of 1935?

Answer

Correct Answer: It legally protected the right of workers to organize and bargain collectively.

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6. Which of the following is a reason labor unions developed in the United States?

Answer

Correct Answer: Child laborers were often being exploited.

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7. Which of the following cultural developments gave rise to labor unions in the United States?

Answer

Correct Answer: Transition from agricultural to industrial society

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8. What situation exists when a single employer dominates a labor market and has the power to affect wages?

Answer

Correct Answer: Monopsony

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9. How would the labor supply curve be affected by the entrance into the market of a large number of immigrants looking for work?

Answer

Correct Answer: Shift to the right

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10. How is the demand curve for labor affected by an increase in labor productivity?

Answer

Correct Answer: Moves to the right

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11. Which of these situations occurs at wages lower than the equilibrium level?

Answer

Correct Answer: The demand for labor is greater than the quantity supplied.

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12. The income effect is the tendency of ______.

Answer

Correct Answer: Workers at a high-wage rate to view leisure as a normal good

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13. The major reason the demand curve for labor slopes ______ is the law of ______.

Answer

Correct Answer: Downward; diminishing marginal product

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14. Which of the following equations calculates marginal revenue product?

Answer

Correct Answer: Marginal product × price of product

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15. What is marginal revenue product?

Answer

Correct Answer: The additional income a firm obtains from one more unit of input

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16. What is marginal revenue product?

Answer

Correct Answer: The additional income a firm obtains from one more unit of input

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17. The Wagner act was a legislation enacted in_____ to protect worker’s rights.

Answer

Correct Answer: 1935

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18. Taft-Wagner act _____ the power granted to workers by the Wagner act.

Answer

Correct Answer: Restrict

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19. Monopsony is a market with a single _____.

Answer

Correct Answer: Buyer

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20. Marginal revenue product (MRP) times the price of the product.

Answer

Correct Answer: True

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21. The amount that an extra input adds to the firm’s total cost is called marginal cost.

Answer

Correct Answer: True

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22. By marginal productivity theory income is distributed to the marginal revenue.

Answer

Correct Answer: True

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23. Interest is _____ of borrowed funds.

Answer

Correct Answer: Cost

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24. Featherbedding is the practice of hiring workers who may not be _____.

Answer

Correct Answer: Necessary

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25. Economic rent is the payment for the use of any resource above its _____ cost.

Answer

Correct Answer: Opportunity

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26. The demand for an input derived from consumers’ demand for the good or service produced with that input is called derived demand.

Answer

Correct Answer: True

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27. Negotiations between representatives of _____ and ____ are called collective bargaining.

Answer

Correct Answer: Both A and c

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28. Income effect dominates the substitution effect, which is called Backward-bending labor supply curve.

Answer

Correct Answer: True

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