1.

If the price of a factor of production decreases, ceteris paribus, the suppliers of that factor will respond by (3 points)

changing the quality

increasing the quantity available

increasing the productivity

decreasing the productivity

decreasing the quantity available

2.

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.

A firm operates in a perfectly competitive output market with a product price of $12. If the marginal product of the last worker employed is 3 units and the firm competes in a perfectly competitive labor market, then the wage must be (3 points)

$4

$9

$12

$15

$36

4.

Use the table to answer the question that foilows. Quantity of Labor MP of Labor Quantity of Capital MP of Capital 1 30 1 so 2 25 2 4o 3 20 3 35 4 15 4 15 5 10 5 5 What combination of labor and capital would satisfy the input hiring rule that minimizes the cost of production, if the price of labor is $5 and the price of capital is $20? (3 points) 0 1 unit of labor; 3 units of capital 0 2 units of labor; 1 unit of capital 0 3 units of labor; 4 units of capital 0 4 units of labor; 4 units of capital 0 5 units of labor; 2 units of capital Use the data in the tables to answer the question that follows. Market Firm Price of Output Quantity Supplied of Output Quantity Demanded of Output Quantity of Labor Total Product $5 25,000 60,000 0 0 $10 50,000 50,000 15 105 $15 75,000 40,000 30 190 $20 100,000 30,000 45 265 $25 125,000 20,000 60 325 What is the marginal revenue product of the 15th unit of labor, assuming this market is perfectly competitive in both the factor and output markets? (3 points) O $7 O $9 $50 $70 $90The graph below represents the labor supply curve of a monopsonistic firm. (3 points) MFCL W5 Wage Rate ($) Labor supply W4 W3 W2 MRPL Q1 Q2 Q3 Quantity (labor) If the firm above hired labor at the quantity Q2, what wage rate would it pay? O W1 O W2 O W3 O W4 O w5