Fundamentals of Economics

FALL SEMESTER 2021

homework #5-6, CHAPTERS 13, 14, 18, 19, 20-22

Multiple Choice

Chapters 18-19

11. Most of the total income earned in the U.S. economy is ultimately paid to

a. households in the form of wages and fringe benefits.

b. landowners in the form of rent.

c. landowners in the form of interest.

d. landowners in the form of profit.

12. Total income in the United States is comprised of (best answer)

a. wages only.

b. wages and fringe benefits only.

c. rents, profits, and interest payments only.

d. wages, fringe benefits, rents, profits, and interest payments.

13. The term "factor market" applies to the market for

a. labor.

b. capital.

c. land.

d. All of the above are correct.

14. Labor markets are different from most other markets because labor demand is

a. unresponsive to changes in wages.

b. unresponsive to changes in the final prices of the products produced by the labor.

c. a derived demand.

d. very responsive to labor supply.

15. The production function is the

a. increase in the amount of output from an additional unit of labor.

b. marginal product of an input times the price of output.

c. relationship between the quantity of inputs and output.

d. shift in labor demand caused by a change in the price of output.