Chapter 14 Review

Resource pricing is important because: a. Resource prices are a major determinant of money incomes b. Resource prices allocate scarce resources among alternative uses. c. Resource prices, along with resource productivity, are important to firms in minimizing their costs. d. All of the above

When economists say that the demand for labor is a derived demand, they mean that it is:

The demand for airline pilots results from the demand for air travel. This fact is an example of:

In the United States, professional football players earn much higher incomes than professional soccer players. This occurs because:

Marginal revenue product measures the:

The purely competitive employer of resource A will maximize the profits from A by equating the:

Marginal product is:

The labor demand curve of a purely competitive seller:

Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is:

A competitive employer should hire additional labor as long as:

A profit-maximizing firm employs resources to the point where:

Marginal resource cost is:

If a firm is selling in an imperfectly competitive product market, then:

A firm that is motivated by self interest should:

If two resources are highly substitutable for one another:

A change in an input price will alter both production costs and the profit-maximizing output. Thus a decline in the price of capital will reduce production costs, increase the profit-maximizing output, and thereby increase the demand for labor. This describe the:

Capital and Labor:

Suppose a technological improvement increases the productivity of a firm's capital and, simultaneously, its workers' union negotiates a wage increase. We can predict that:

Suppose the demand for strawberries rises sharply, resulting in an increased price of strawberries. As it relates to strawberry pickers, we could expect the:

Elasticity of resource demand is measured by the:

The profit-maximizing firm using two outputs, x and y will employ inputs so that:

Those who advocate the marginal productivity theory of income distribution argue that:

Critics of the marginal productivity theory of income distribution claim that the theory is flawed due to:

The introduction of ATM machines allowed financial institutions to handle more transactions at less cost, thus decreasing the demand for human tellers. The best explanation for this change is that the: