Markets for Labor, Capital, and Land MCQs
Markets for Labor, Capital, and Land MCQs
Answer these 20 Markets for Labor, Capital, and Land MCQs and assess your grip on the subject of Markets for Labor, Capital, and Land.
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1: Income effect dominates the substitution effect, which is called Backward-bending labor supply curve.
A. True
B. False
2: Negotiations between representatives of _____ and ____ are called collective bargaining.
A. Employers
B. Employees
C. Unions
D. Both A and c
3: The demand for an input derived from consumers’ demand for the good or service produced with that input is called derived demand.
A. True
B. False
4: Economic rent is the payment for the use of any resource above its _____ cost.
A. Actual
B. Opportunity
C. Legal
D. International
5: Featherbedding is the practice of hiring workers who may not be _____.
A. Eligible
B. Necessary
C. Appropriate
D. None of the above
6: Interest is _____ of borrowed funds.
A. Cost
B. Sale
C. Subsidy
D. Tax
7: By marginal productivity theory income is distributed to the marginal revenue.
A. True
B. False
8: The amount that an extra input adds to the firm’s total cost is called marginal cost.
A. True
B. False
9: Marginal revenue product (MRP) times the price of the product.
A. True
B. False
10: Monopsony is a market with a single _____.
A. Buyer
B. Seller
C. Retailer
D. None of above
11: Taft-Wagner act _____ the power granted to workers by the Wagner act.
A. Allows
B. Respond
C. Defend
D. Restrict
12: The Wagner act was a legislation enacted in_____ to protect worker’s rights.
A. 1940
B. 1935
C. 1947
D. 1970
13: What is marginal revenue product?
A. The change in total costs resulting from a one-unit change in input
B. The average variable cost of producing one more unit of output
C. The additional income a firm obtains from one more unit of input
D. The change in productivity associated with one more unit of output
14: What is marginal revenue product?
A. The change in total costs resulting from a one-unit change in input
B. The average variable cost of producing one more unit of output
C. The additional income a firm obtains from one more unit of input
D. The change in productivity associated with one more unit of output
15: Which of the following equations calculates marginal revenue product?
A. Marginal costs × total output
B. Marginal revenue – marginal cost
C. Marginal product – cost of product
D. Marginal product × price of product
16: The major reason the demand curve for labor slopes ______ is the law of ______.
A. Upward; marginal resource cost
B. Upward; diminishing marginal demand
C. Downward; diminishing marginal product
D. Downward; marginal revenue product
17: The income effect is the tendency of ______.
A. Workers with employed partners to reduce their hours
B. Workers at a low-wage rate to work even when sick
C. Unemployed workers to take casual labor and freelance jobs
D. Workers at a high-wage rate to view leisure as a normal good
18: Which of these situations occurs at wages lower than the equilibrium level?
A. The demand for labor is greater than the quantity supplied.
B. The quantity of supplied labor is greater than demand.
C. Unemployed workers are willing to undercut the established wage.
D. Employers undercut the wage to push it back to equilibrium level.
19: How is the demand curve for labor affected by an increase in labor productivity?
A. Moves to the right
B. Moves to the left
C. Moves upward
D. Moves downward
20: How would the labor supply curve be affected by the entrance into the market of a large number of immigrants looking for work?
A. Shift upward
B. Shift downward
C. Shift to the right
D. Shift to the left
21: What situation exists when a single employer dominates a labor market and has the power to affect wages?
A. Equilibrium
B. Monopsony
C. Monopoly
D. Oligopoly
22: Which of the following cultural developments gave rise to labor unions in the United States?
A. Colonial-era exploration and settlement
B. Intellectual expansion of the Enlightenment
C. Transition from agricultural to industrial society
D. Increase of working women during the 1970s
23: Which of the following is a reason labor unions developed in the United States?
A. A minimum hourly wage was established by law.
B. States mandated free basic education for all.
C. Child laborers were often being exploited.
D. Factory jobs had benefits farm labor did not.
24: What is the importance of the Wagner Act of 1935?
A. It restricted the power of unions to intimidate workers reluctant to join.
B. It legally protected the right of workers to organize and bargain collectively.
C. It outlawed the practice of hiring workers who may not be necessary.
D. It increased accountability for union finances and leadership elections.
25: What is meant by “featherbedding” in terms of union employment?
A. Adding workers who may not be necessary
B. Refusing to take on high-risk assignments
C. Conducting union business during work hours
D. Negotiating through the night during contract talks
26: With a factor of production that has a fixed supply, such as land, how is the supply curve affected when the price increases?
A. It shifts to the right.
B. It shifts to the left.
C. It does change.
D. It bends backward.
27: According to the marginal productivity theory of income distribution, each person receives payment equal to ______.
A. His or her ability to control the size of the labor market
B. The contribution to production made by the factor he or she owns
C. His or her ability to find employment in a union shop
D. The absolute worth of his or her skills and knowledge
28: If a firm must borrow funds to acquire capital, it will have to pay back those funds plus an extra amount known as ______.
A. Capital gains
B. Dividends
C. Income tax
D. Interest
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Markets for Labor, Capital, and Land MCQs
