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Markets for Labor, Capital, and Land MCQ

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

Capital gains

Dividends

Income tax

Interest

Answer

Correct Answer: Interest

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

His or her ability to control the size of the labor market

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

His or her ability to find employment in a union shop

The absolute worth of his or her skills and knowledge

Answer

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

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

It shifts to the right.

It shifts to the left.

It does change.

It bends backward.

Answer

Correct Answer: It does change.

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

Adding workers who may not be necessary

Refusing to take on high-risk assignments

Conducting union business during work hours

Negotiating through the night during contract talks

Answer

Correct Answer: Adding workers who may not be necessary

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What is the importance of the Wagner Act of 1935?

It restricted the power of unions to intimidate workers reluctant to join.

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

It outlawed the practice of hiring workers who may not be necessary.

It increased accountability for union finances and leadership elections.

Answer

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

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

A minimum hourly wage was established by law.

States mandated free basic education for all.

Child laborers were often being exploited.

Factory jobs had benefits farm labor did not.

Answer

Correct Answer: Child laborers were often being exploited.

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

Colonial-era exploration and settlement

Intellectual expansion of the Enlightenment

Transition from agricultural to industrial society

Increase of working women during the 1970s

Answer

Correct Answer: Transition from agricultural to industrial society

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

Equilibrium

Monopsony

Monopoly

Oligopoly

Answer

Correct Answer: Monopsony

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

Shift upward

Shift downward

Shift to the right

Shift to the left

Answer

Correct Answer: Shift to the right

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

Moves to the right

Moves to the left

Moves upward

Moves downward

Answer

Correct Answer: Moves to the right

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

The demand for labor is greater than the quantity supplied.

The quantity of supplied labor is greater than demand.

Unemployed workers are willing to undercut the established wage.

Employers undercut the wage to push it back to equilibrium level.

Answer

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

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The income effect is the tendency of ______.

Workers with employed partners to reduce their hours

Workers at a low-wage rate to work even when sick

Unemployed workers to take casual labor and freelance jobs

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

Answer

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

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

Upward; marginal resource cost

Upward; diminishing marginal demand

Downward; diminishing marginal product

Downward; marginal revenue product

Answer

Correct Answer: Downward; diminishing marginal product

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Which of the following equations calculates marginal revenue product?

Marginal costs × total output

Marginal revenue – marginal cost

Marginal product – cost of product

Marginal product × price of product

Answer

Correct Answer: Marginal product × price of product

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What is marginal revenue product?

The change in total costs resulting from a one-unit change in input

The average variable cost of producing one more unit of output

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

The change in productivity associated with one more unit of output

Answer

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

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What is marginal revenue product?

The change in total costs resulting from a one-unit change in input

The average variable cost of producing one more unit of output

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

The change in productivity associated with one more unit of output

Answer

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

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

1940

1935

1947

1970

Answer

Correct Answer: 1935

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

Allows

Respond

Defend

Restrict

Answer

Correct Answer: Restrict

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Monopsony is a market with a single _____.

Buyer

Seller

Retailer

None of above

Answer

Correct Answer: Buyer

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

True

False

Answer

Correct Answer: True

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

True

False

Answer

Correct Answer: True

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

True

False

Answer

Correct Answer: True

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Interest is _____ of borrowed funds.

Cost

Sale

Subsidy

Tax

Answer

Correct Answer: Cost

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

Eligible

Necessary

Appropriate

None of the above

Answer

Correct Answer: Necessary

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

Actual

Opportunity

Legal

International

Answer

Correct Answer: Opportunity

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

True

False

Answer

Correct Answer: True

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Negotiations between representatives of _ and are called collective bargaining.

Employers

Employees

Unions

Both A and c

Answer

Correct Answer: Both A and c

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

True

False

Answer

Correct Answer: True

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Markets for Labor, Capital, and Land MCQ

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

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

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

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

What is the importance of the Wagner Act of 1935?

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

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

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

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

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

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

The income effect is the tendency of ______.

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

Which of the following equations calculates marginal revenue product?

What is marginal revenue product?

What is marginal revenue product?

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

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

Monopsony is a market with a single _____.

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

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

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

Interest is _____ of borrowed funds.

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

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

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

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

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

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

Negotiations between representatives of _ and are called collective bargaining.