1.

(05.01 MC) Suppliers of factors of production in a perfectly competitive market respond to higher factor prices by ________ of their factors, ceteris paribus. (3 points)

	changing the quality
	increasing the productivity
	decreasing the productivity
	increasing the quantity available
	decreasing the quantity available

2.

(05.01 MC) In the factor market, _______ make up demand and ________ provide the supply. (3 points)

	households; businesses
	households; the government
	households; entrepreneurs
	government; business firms
	businesses; households

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 0 5 8 9 10 Labor 10\fTelecommunications Industry S, S. Wage Rate ($) D1 Quantity (labor)MFCL W5 Wage Rate ($) Labor supply W4 W3 - - 7 W2 W1 -l- - MRPL - - Q1 Q2 Q3 Quantity (labor)