The figure shows the labor demand and labor supply curves for workers in local fast-food restaurants. The fast-food restaurant industry is competitive. An increase in the supply of labor shifts the labor supply curve from S₀ to S₁. Fast-food restaurants hire ______________ and total labor income earned by the fast-food workers _______.

30 hours a day; decreases
40 hours a day; decreases
30 hours a day; increases
40 hours a day; increases

The table shows the supply schedule for bubblegum workers. The market for bubblegum is competitive and the current wage rate is $12 an hour. The bubblegum industry is perfectly competitive and the price of a packet of gum is $0.50. To maximize profits, the bubblegum industry hires __________workers an hour and pays each worker __________an hour.

13; $8
15; $12
16; $14
14; $10

The figure illustrates the demand and supply of fast-food workers. Initially, the labor demand curve is D and the supply curve is S₀. The fast-food industry hires workers for ____________hours a day. If the price of a taco is $2, Tom's Taco pays its workers _________ an hour.

30; $7
40; $4
30; $5
6; $240

Sam's Scarves has 2 knitting machines and employs 2 people. They produce 11 scarves a day. If the firm hires an additional person, the 3 workers can produce 15 scarves a day other things remaining the same. The market for scarves is competitive and the price of a scarf is $5. The marginal revenue product of the third workers is ______________.

$25
4 scarves
$75
$20

At Steve's Ice Cream Parlor, marginal revenue product of labor is $10 an hour and marginal product of labor is 5 cartons of ice cream an hour. At Steve's, marginal revenue is ________ a carton, and because Steve's is maximizing profit its marginal cost is ________ a carton.

$50; $50
$10; $10
$2; $2
$50; $10

When the _______ effect dominates the _______ effect, the labor supply curve is _______.

income; substitution; vertical
substitution; income; horizontal
income; substitution; upward sloping
substitution; income; upward sloping

Andy wants to buy a computer that will cost $3,000. The computer has a life of two years and then it will be worthless. The marginal revenue product of the computer is expected to be $1,500 a year. What is the present value of the flow of marginal revenue product if the interest rate is 10 percent a year?

$2,603
$2,727
$3,000
$1,363

As the babyboomer generation moves into middle age, saving will _______, the supply of capital will _______, and there will be a ______________the supply curve of capital.

decrease; decrease; movement along
increase; increase; movement along
decrease; increase; rightward shift of
increase; increase; rightward shift of

The figure shows the demand and supply curves for a productive resource. Which of the following statements about this resource is true?

Opportunity cost is greater than economic rent.
Opportunity cost and economic rent are equal.
Economic rent is the value of the resource in its next best use.
Opportunity cost is less than economic rent.

The market for an exhaustible natural resource is in equilibrium. If the demand for the resource increases, _____________.

the price increases
the price may increase or decrease
the price remains unchanged
the price decreases

Please enter your name and press the SEND button