AP Microeconomics Unit 5 Factor markets

If a large number of unskilled workers enter the labor market, which of the following is most likely to occur in the labor market for unskilled workers?

• The supply curve will shift to the right and the wage rate will decrease.

• The supply curve will shift to the left and the wage rate will increase.

• The demand curve will shift to the left and the wage rate will decrease.

• The demand curve will shift to the right and the wage rate will increase.

A profit-maximizing firm will continue to hire workers until the marginal revenue product of labor is equal to the:

• demand for labor

• marginal product of labor

• price of the good that labor is producing

• marginal resource cost

Which of the following would cause the wage for computer programmers to increase?

• A decrease in the amount of physical capital per computer programmer

• A decrease in the value that computer programmers place on leisure

• A minimum wage set below the equilibrium wage in the market for computer programmers

• An improvement in the education of computer programmers

If the wage rate decreases, which of the following is the most likely outcome?

• people increase the quantity of labor supplied; firms decrease the quantity of labor demanded

• people decrease the quantity of labor supplied; firms increase the quantity of labor demanded

• people decrease their leisure and increase their supply of labor

• people decide to equalize their leisure and labor usage

Someone buys a car in exchange for a large amount of money. They have completed an exchange in which part of the circuclar flow model?

• Product Market

• Factor Market

• Firms

• Individuals

An increase in the demand for new houses will most likely cause which of the following?

• Increase in the supply of houses
• 1. Decrease in the price of nails

• Decrease in the price of houses
• Increase in the demand for plumbers

1. Which of the following is an example of derived demand?

• Incomes increase causing the demand for a luxury cars to decrease
• The price of lumber decreases, so home builders demand more bricks
• An increase in the demand for cars increases the demand for steel
• An increase in the price of milk increases the demand for cereal

1. A perfectly competitive firm would continue to purchase additional resources as long as

• the marginal product is less than the marginal cost
• the marginal revenue product is greater that the price of the resource
• the marginal revenue product is less than the price of the resource
• the marginal revenue product is negative

The table gives output, marginal product, and average product of a firm producing novelty T-shirts using different numbers of workers. The firm produces t-shirts in a perfectly competitive market where the price of a t-shirt is $10. What is the marginal revenue product of labor (MRP_L) of the fourth worker?

• $500

• $700

• $450

• $800

If the wage rate decreases, which of the following is the most likely outcome?

• people increase the quantity of labor supplied; firms decrease the quantity of labor demanded

• people decrease the quantity of labor supplied; firms increase the quantity of labor demanded

• people decrease their leisure and increase their supply of labor

• people decide to equalize their leisure and labor usage