1.

(05.01 MC) If the productivity of a factor of production increases, ceteris paribus, those demanding that factor will respond by (3 points)

	lowering their quantity demanded
	increasing their demand
	decreasing what they will pay for the factor
	producing more of that factor
	utilizing less of that factor

2.

(05.01 MC) The quantity of labor demanded is ________ related to the wage rate, while the quantity of labor supplied is ________ related to the wage rate, ceteris paribus. (3 points)

	positively; positively
	negatively; positively
	positively; negatively
	negatively; negatively
	negatively; not

3.

(05.01 MC) The number of units of output that an acre of land will produce increases, ceteris paribus. How will this change in productivity affect demand for the land? (3 points)

	Demand will increase.
	Demand will decrease.
	There will be no change in demand.
	Demand will not change, but quantity demanded will decrease.
	Demand will not change, but quantity demanded will increase.

4.

(05.01 MC) Use the graph to answer the question that follows. (3 points)

30- 25 20 15 Marginal Product 10 5 5 5 6 7 8 9 10 Labor 10\fTelecommunications Industry Wage Rate ($) D, Quantity (labor)MFCL W5 Wage Rate ($) Labor supply W4 W3 - - T W2 W1 -l- MRPL Q1 Q3 Quantity (labor)