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"In order for Charlie Trotter's, an upscale restaurant in Chicago, to maximize profit from the employment of chefs, the restaurant should hire chefs up to the point where the value of marginal product equals the wage rate for chefs." Is the statement correct or incorrect?

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The statement is correct. In o...

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A bilateral monopoly is a


A) firm that is a monopsony in a resource market and a monopoly in a product market.
B) firm that is a monopoly in two product markets.
C) market in which a monopoly discriminates, setting a higher price for affluent customers.
D) market in which a monopsony bargains with a monopoly.

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The demand curve for labor is negatively sloped only because the firm must lower its price if it wishes to sell more output.

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St. Mary's Church has a balloon payment of $100,000 due on its mortgage in two years. If the interest rate is 8 percent, the present value of St. Mary's balloon mortgage payment is


A) $100,000.00.
B) $116,640.00.
C) $85, 733.88.
D) None of the above answers is correct.

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A rise in the minimum wage increases the demand for union labor because this policy change


A) lowers the wage rate paid to union labor.
B) raises the productivity of union labor.
C) lowers the cost of a substitute for union labor.
D) raises the cost of a substitute for union labor.

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Because of the income effect, the labor supply curve is


A) backward bending.
B) positively sloped.
C) horizontal.
D) vertical.

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If the interest rate falls, the present value of $100 to be received in one year


A) rises.
B) falls.
C) is unaffected.
D) might rise, fall, or not change.

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Discuss the difference between renewable and nonrenewable resources. Given an example of each.

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A renewable natural resource can be used...

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For a monopsony, the labor supply curve is


A) above the MCL curve.
B) always below the VMP curve.
C) downward sloping.
D) upward sloping.

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A worker supplies labor to the market if the


A) wage is less than the reservation wage.
B) wage is greater than the reservation wage.
C) minimum wage is less than the reservation wage.
D) demand for labor exceeds the supply of labor.

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-Sun's Gas Station is a firm operating in a perfectly competitive industry. Sun's Gas Station sells each gallon of gas for $3. What is the total revenue earned by selling 180 gallons of gas? A) $240 B) $540 C) $840 D) $3,300 -Sun's Gas Station is a firm operating in a perfectly competitive industry. Sun's Gas Station sells each gallon of gas for $3. What is the total revenue earned by selling 180 gallons of gas?


A) $240
B) $540
C) $840
D) $3,300

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-City-Mart is the only employer of sales clerks in Panburg. In the figure above S is the labor supply curve faced by City-Mart, VMP is City-Mart's value of marginal product curve, and MCL is its marginal cost of labor curve. If a minimum wage law is passed that requires employers to pay at least $7 per hour, City-Mart will employ ________ hours of sales clerk labor per day. A) 35 B) 110 C) 90 D) 70 -City-Mart is the only employer of sales clerks in Panburg. In the figure above S is the labor supply curve faced by City-Mart, VMP is City-Mart's value of marginal product curve, and MCL is its marginal cost of labor curve. If a minimum wage law is passed that requires employers to pay at least $7 per hour, City-Mart will employ ________ hours of sales clerk labor per day.


A) 35
B) 110
C) 90
D) 70

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Which of the following would explain why Josh's Limo Service might increase its demand for limo drivers?


A) a rise in the price of a limo ride
B) a decrease in the demand for limo rides
C) a fall in the price of a taxi ride
D) a rise in the wage paid to limo drivers

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If a union can successfully shift the demand curve for union labor rightward, the union can achieve


A) an increase in wages and employment.
B) an increase in wages but a decrease in employment.
C) an increase in employment but a decrease in wages.
D) a decrease in both employment and wages.

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-The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. The market price of peanuts is $2.00 per pound. What is the value of marginal product from employing the third worker? A) $800 B) $1,200 C) $2,000 D) $4,800 -The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. The market price of peanuts is $2.00 per pound. What is the value of marginal product from employing the third worker?


A) $800
B) $1,200
C) $2,000
D) $4,800

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For many jobs, as wages increase, the quantity supplied of labor increases. This set of facts is evidence that the


A) substitution effect is larger than the income effect and the supply of labor curve is upward sloping.
B) income effect is larger than the substitution effect and the supply of labor curve is upward sloping.
C) substitution effect is larger than the income effect and the supply of labor curve is backward bending.
D) income effect is larger than the substitution effect and the supply of labor curve is backward bending.

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The firm's demand for labor is derived directly from ________.


A) the wage rate
B) the supply of labor
C) labor's cost
D) labor's value of marginal product

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-The figure above shows a labor market. If there is a monopsony in this labor market, employment is A) 0 hours per week. B) 50 hours per week. C) 100 hours per week. D) 150 hours per week. -The figure above shows a labor market. If there is a monopsony in this labor market, employment is


A) 0 hours per week.
B) 50 hours per week.
C) 100 hours per week.
D) 150 hours per week.

Correct Answer

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-The figure above shows the labor demand and labor supply curves for workers in local fast-food restaurants. The fast-food restaurant industry is competitive. A decrease in the supply of labor shifts the labor supply curve from LS<sub>0</sub> to LS<sub>1</sub>. Fast-food restaurants hire ________ and total labor income earned by the fast-food workers ________. A) 40 hours of labor a day; increases B) 30 hours of labor a day; decreases C) 40 hours of labor a day; decreases D) 30 hours of labor a day; increases -The figure above shows the labor demand and labor supply curves for workers in local fast-food restaurants. The fast-food restaurant industry is competitive. A decrease in the supply of labor shifts the labor supply curve from LS0 to LS1. Fast-food restaurants hire ________ and total labor income earned by the fast-food workers ________.


A) 40 hours of labor a day; increases
B) 30 hours of labor a day; decreases
C) 40 hours of labor a day; decreases
D) 30 hours of labor a day; increases

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A firm's value of marginal product of labor curve


A) is flatter than its demand for labor curve.
B) is steeper than its demand for labor curve.
C) is its demand for labor curve.
D) bends backward.

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