ECON 202 EXAM STUDY GUIDE
Learning Objective: 02-02 List the main characteristics of the market system.
Test Bank: I Topic: Characteristics of the Market System
26.
Given the information, and assuming trade occurs between the three states, we can expect
that there is no means by which Michigan can obtain lettuce while specializing in the production of autos.
that money will not be needed to accomplish the desired exchanges.
C. money to flow counter-clockwise from Michigan to Texas to Washington.
D. money to flow clockwise from Michigan to Washington to Texas.
AACSB: Knowledge Application
Blooms: Remember Difficulty: 01 Easy
Learning Objective: 02-02 List the main characteristics of the market system.
Test Bank: I Topic: Characteristics of the Market System
Barter
is the major means of exchange in centrally planned economies.
accounts for over 30 percent of the dollar volume of all exchange in the U.S. economy.
C. entails the exchange of goods for goods.
D. is used to circumvent the problem of a lack of coincidence of wants among potential buyers and sellers.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 01 Easy Learning Objective: 02-02 List the main characteristics of the market system.
Test Bank: I Topic: Characteristics of the Market System
The "coincidence of wants" problem associated with barter refers to the fact that
for exchange to occur, each seller must have a product that some buyer wants.
money must be used as a medium of exchange or trade will never occur.
specialization is restricted by the size or scope of a market.
buyers in resource markets and sellers in product markets can never engage in exchange.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 01 Easy Learning Objective: 02-02 List the main characteristics of the market system.
Test Bank: I Topic: Characteristics of the Market System
The use of money contributes to economic efficiency because
governmental direction of the production and distribution of output can be avoided by using money.
roundabout production could not occur without the availability of money.
it is necessary for the creation of capital goods.
D. it promotes specialization by overcoming the problems with barter.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Remember Difficulty: 01 Easy
Learning Objective: 02-02 List the main characteristics of the market system.
Test Bank: I Topic: Characteristics of the Market System
The presence of market failures implies that
money is not an effective tool for exchange in a market system.
B. there is an active role for government, even in a market system.
individuals and firms should strive to be self-sufficient rather than specialize.
command systems are superior to market systems in the allocation of resources.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Remember Difficulty: 01 Easy
Learning Objective: 02-02 List the main characteristics of the market system.
Test Bank: I Topic: Characteristics of the Market System
Which of the following characteristics is least unique to a market system?
private ownership of property resources
competition among buyers and sellers pursuing monetary returns
C. the widespread use of money
D. freedom of enterprise and choice
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Remember Difficulty: 01 Easy
Learning Objective: 02-02 List the main characteristics of the market system.
Test Bank: I Topic: Characteristics of the Market System
Which of the following is one of the Five Fundamental Questions?
Which products will be in scarce supply and which in excess supply?
Who should appoint the head of the central bank?
How much should society save?
D. What goods and services will be produced?
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 02 Medium Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress.
Test Bank: I Topic: Five Fundamental Questions
If competitive industry Z is making substantial economic profit, output will
fall in industry Z and firms will likely leave the market.
fall in all industries except industry Z.
C. expand in industry Z, as more resources will move to that industry.
D. expand in industry Z, but no new firms will enter the market.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress. Learning Objective: 02-04 Explain the operation of the invisible hand and why market economies usually do a better job than command economies at efficiently transforming economic resources into desirable output.
Test Bank: I
Topic: Five Fundamental Questions Topic: The Invisible Hand
From society's point of view, the economic function of profits and losses is to
promote the equal distribution of real assets and wealth.
achieve full employment and price level stability.
contribute to a more equal distribution of income.
D. reallocate resources from less-desired to more-desired uses.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 02 Medium Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress. Learning Objective: 02-04 Explain the operation of the invisible hand and why market economies usually do a better job than command economies at efficiently transforming economic resources into desirable output.
Test Bank: I Topic: Five Fundamental Questions Topic: The Invisible Hand
In a market economy, a significant change in consumers' desire for product X will
alter the profits or losses received by suppliers of product X.
cause a reallocation of scarce resources.
cause some industries to expand and others to contract.
D. do all of the things mentioned in the other answers.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 02 Medium Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress. Learning Objective: 02-04 Explain the operation of the invisible hand and why market economies usually do a better job than command economies at efficiently transforming economic resources into desirable output.
Test Bank: I Topic: Five Fundamental Questions Topic: The Invisible Hand
Economic profits in an industry suggest the industry
can earn more profits by increasing product price.
B. should be larger to better satisfy consumers' desire for the product.
has excess production capacity.
is the size that consumers want it to be.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 02 Medium Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress.
Test Bank: I Topic: Five Fundamental Questions
Economic profits and losses
are both considered by economists to be a part of production costs.
B. are essential to the reallocation of resources from less desired to more desired goods.
have no influence on the composition of domestic output.
equalize the distribution of income in the long run.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 02 Medium Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress. Learning Objective: 02-04 Explain the operation of the invisible hand and why market economies usually do a better job than command economies at efficiently transforming economic resources into desirable output.
Test Bank: I Topic: Five Fundamental Questions Topic: The Invisible Hand
If consumer desire for product X increases, all of the following will occur except
an increase in the profits of industry X.
an increase in the quantity of resources employed by industry X.
an increase in the output of industry X.
D. a decrease in the quantity of resources employed in industry X.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress.
Learning Objective: 02-04 Explain the operation of the invisible hand and why market economies usually do a better job than command economies at efficiently transforming economic resources into desirable output.
Test Bank: I Topic: Five Fundamental Questions Topic: The Invisible Hand
An increase in consumer desire for strawberries is most likely to
increase the number of strawberry pickers needed by farmers.
reduce the supply of strawberries.
reduce the number of people willing to pick strawberries.
reduce the need for strawberry pickers.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 02 Medium Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress. Learning Objective: 02-04 Explain the operation of the invisible hand and why market economies usually do a better job than command economies at efficiently transforming economic resources into desirable output.
Test Bank: I Topic: Five Fundamental Questions Topic: The Invisible Hand
If competitive industry Y is incurring substantial losses, output will
expand as resources move toward industry Y.
contract as resources move toward industry Y.
C. contract as resources move away from industry Y.
D. expand as resources move away from industry Y.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 02 Medium Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress. Learning Objective: 02-04 Explain the operation of the invisible hand and why market economies usually do a better job than command economies at efficiently transforming economic resources into desirable output.
Test Bank: I Topic: Five Fundamental Questions Topic: The Invisible Hand
The economic function of profits and losses is to
bring about a more equal distribution of income.
B. signal that resources should be reallocated.
eliminate small firms and reduce competition.
tell government which industries need to be subsidized.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress.
Learning Objective: 02-04 Explain the operation of the invisible hand and why market economies usually do a better job than command economies at efficiently transforming economic resources into desirable output.
Test Bank: I Topic: Five Fundamental Questions Topic: The Invisible Hand
If a competitive industry is neither expanding nor contracting, we would expect
total revenue to be zero.
B. economic profits to be zero.
total opportunity cost to be zero.
more resources to flow to that industry.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress.
Test Bank: I Topic: Five Fundamental Questions
The competitive market system
encourages innovation because government provides tax breaks and subsidies to those who develop new products or new productive techniques.
discourages innovation because it is difficult to acquire additional capital in the form of new machinery and equipment.
discourages innovation because firms want to get all the profits possible from existing machinery and equipment.
D. encourages innovation because successful innovators are rewarded with economic profits.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 02 Medium Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress.
Test Bank: I Topic: Five Fundamental Questions
In a market economy, the distribution of output will be determined primarily by
consumer needs and preferences.
B. the quantities and prices of the resources that households supply.
government regulations that provide a minimum income for all.
a social consensus as to which distribution of income is most equitable.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 02 Medium Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress.
Test Bank: I Topic: Five Fundamental Questions
The most efficient combination of resources in producing a given output is the combination that
comes closest to using the same quantities of land, labor, capital, and entrepreneurial ability.
B. minimizes the cost per unit of output.
uses the smallest total quantity of all resources.
conserves most on the use of labor.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 02 Medium Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress.
Test Bank: I Topic: Five Fundamental Questions
Firms are motivated to minimize production costs because
it is the most environmentally friendly way to produce goods.
least-cost production techniques use the smallest total quantity of resources.
C. competitive pressures in the market will drive out higher-cost producers.
D. the government provides tax credits and subsidies to low-cost producers.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 02-03 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress.
Test Bank: I Topic: Five Fundamental Questions
Chapter 17 Wage Determination Answer Key
Multiple Choice Questions
Real wages in the United States in the long run
show no discernible relationship to output per worker.
B. have increased at about the same rate as increases in output per worker.
have increased slower than increases in output per worker.
have increased faster than increases in output per worker.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
The long-run trend of real wages
cannot be determined from available data on nominal wages and the price level.
has been downward because the price level has risen faster than nominal wages.
C. has been upward.
D. has been downward because labor's share of the domestic income has fallen.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
If the nominal wages of carpenters rose by 5 percent in 2013 and the price level increased by 3 percent, then the real wages of carpenters
decreased by 2 percent.
B. increased by 2 percent.
increased by 3 percent.
increased by 8 percent.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
Over the long run, real earnings per worker can increase only at about the same rate as the economy's rate of growth of
total output.
stock of capital.
C. output per worker.
D. international trade.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
Increases in the productivity of labor result partly from
the law of diminishing returns.
B. improvements in technology.
reductions in wage rates.
increases in the quantity of labor.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
Real wages in the United States are
the highest in the world.
B. relatively high, but not as high as in some other industrially advanced nations.
much higher than output per worker.
higher than nominal wages.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
According to international comparisons, which nation had the highest hourly pay in U.S. dollar terms in 2013?
United States
Germany
Australia
D. Sweden
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
According to international comparisons, which of these nations was not in the top 5 for hourly pay in U.S. dollar terms in 2013?
Sweden
Germany
Australia
D. United States
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
The real wage will rise if the nominal wage
falls more rapidly than the general price level.
increases at the same rate as labor productivity.
C. increases more rapidly than the general price level.
D. falls at the same rate as the general price level.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
Which of the following is correct?
The nominal wage may fall, but the real wage can never decline.
The real wage may fall, but the nominal wage can never decline.
Both the nominal and the real wage must always rise.
D. The nominal and the real wage may both fall.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
The productivity and real wages of workers in industrially advanced economies have risen historically partly because
workers have acquired less education and training over time.
B. workers have been able to use larger quantities of capital equipment.
over time, the capital equipment used by workers has deteriorated in quality.
the supply of labor has increased.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
If the nominal wage rises by 4 percent and the price level rises by 7 percent, the real wage will
be unaffected.
rise by 3 percent.
C. fall by 3 percent.
D. rise by 11 percent.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
If the nominal wage rises by 6 percent and the price level falls by 2 percent, the real wage will
be unaffected.
rise by 4 percent.
fall by 4 percent.
D. rise by 8 percent.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
Long-run real wages in the United States have
risen because growth in the demand for labor has exceeded growth in the supply of labor.
risen because the supply of labor has fallen over time.
fallen because growth in the supply of labor has exceeded growth in the demand for labor.
fallen because the demand for labor has fallen over time.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
Since 1960, real hourly compensation in the United States has approximately
remained the same.
risen by 40 percent.
C. doubled.
D. tripled.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-01 Explain why labor productivity and real hourly compensation track so closely over time.
Test Bank: I Topic: Labor, Wages, and Earnings
Marginal revenue product (MRP) of labor refers to the
increase in total revenue resulting from selling an additional unit of output.
amount by which a firm's total resource cost increases when it employs one more unit of labor.
C. increase in total revenue resulting from hiring one more unit of labor.
D. price at which additional units of labor can be employed in a monopsonized labor market.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-02 Show how wage rates and employment levels are determined in competitive labor markets.
Test Bank: I Topic: A Purely Competitive Labor Market
Marginal resource cost refers to the
increase in total revenue resulting from the sale of the extra output of one more worker.
price at which additional units of a resource can be hired in an imperfectly competitive resource market.
increase in total cost resulting from producing one more unit of output.
D. amount by which a firm's total resource cost increases as the result of hiring one more unit of the resource.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-02 Show how wage rates and employment levels are determined in competitive labor markets.
Test Bank: I Topic: A Purely Competitive Labor Market
If a firm is hiring a certain type of labor under purely competitive conditions,
its labor demand curve will be perfectly elastic at the market-determined wage rate.
the labor supply curve will lie above the marginal labor cost curve.
the labor supply and marginal labor (resource) cost curves will coincide and be upsloping.
D. the labor supply and marginal labor (resource) cost curves will coincide and be perfectly elastic.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-02 Show how wage rates and employment levels are determined in competitive labor markets.
Test Bank: I Topic: A Purely Competitive Labor Market
The market supply curve for labor is upsloping because
of diminishing returns.
B. employers as a group must pay higher wage rates to obtain more workers.
of declining MRC.
each employer is a "wage taker."
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-02 Show how wage rates and employment levels are determined in competitive labor markets.
Test Bank: I Topic: A Purely Competitive Labor Market
A firm operating in a purely competitive resource market faces a resource supply curve that is
perfectly inelastic.
B. perfectly elastic.
highly inelastic.
highly elastic.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-02 Show how wage rates and employment levels are determined in competitive labor markets.
Test Bank: I Topic: A Purely Competitive Labor Market
A firm that is hiring labor in a purely competitive labor market and selling its product in a purely competitive product market will maximize its profit by hiring labor until
marginal revenue product is zero.
marginal revenue product exceeds marginal resource (labor) cost by the greatest amount.
marginal resource cost is zero.
D. marginal revenue product equals marginal resource (labor) cost.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-02 Show how wage rates and employment levels are determined in competitive labor markets.
Test Bank: I Topic: A Purely Competitive Labor Market
A profit-maximizing firm will
expand employment if marginal revenue product exceeds marginal resource cost.
reduce employment if marginal revenue product exceeds marginal resource cost.
expand employment if marginal revenue product equals marginal resource cost.
reduce employment if marginal revenue product equals marginal resource cost.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-02 Show how wage rates and employment levels are determined in competitive labor markets.
Test Bank: I Topic: A Purely Competitive Labor Market
A profit-maximizing firm will
expand employment if marginal revenue product equals marginal resource cost.
reduce employment if marginal revenue product equals marginal resource cost.
C. reduce employment if marginal revenue product is less than marginal resource cost.
D. expand employment if marginal revenue product is less than marginal resource cost.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-02 Show how wage rates and employment levels are determined in competitive labor markets.
Test Bank: I Topic: A Purely Competitive Labor Market
A firm hiring labor in a perfectly competitive labor market faces a
downsloping labor supply curve and upsloping labor demand curve.
upsloping labor supply curve and downsloping labor demand curve.
upsloping labor supply curve and horizontal labor demand curve.
D. horizontal competitive wage curve and downsloping labor demand curve.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-02 Show how wage rates and employment levels are determined in competitive labor markets.
Test Bank: I Topic: A Purely Competitive Labor Market
25.
Refer to the given data. If there is neither a union nor a minimum wage, we can conclude that this firm
A. "purchases" labor in a purely competitive labor market.
is a monopsonist.
faces a perfectly inelastic labor supply curve.
has a perfectly elastic labor demand curve.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-02 Show how wage rates and employment levels are determined in competitive labor markets.
Test Bank: I Topic: A Purely Competitive Labor Market
Type: Table
26.
Refer to the given data. In maximizing its profit, this firm will employ
A. 2 units of labor.
B. 3 units of labor.
4 units of labor.
5 units of labor.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-02 Show how wage rates and employment levels are determined in competitive labor markets.
Test Bank: I Topic: A Purely Competitive Labor Market
Type: Table
27.
Refer to the given data. At the profit-maximizing level of employment, this firm's total labor cost will be
A. $16.
B. $30.
C. $24.
D. $32.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 17-02 Show how wage rates and employment levels are determined in competitive labor markets.
Test Bank: I Topic: A Purely Competitive Labor Market