1. The demand curve for a human resource will be more
a. lower the skill level necessary to perform the job.
b. easier it is to obtain the skill and knowledge necessary to provide the
c. more elastic the demand for the product the resource is used to produce.
d. more inelastic the demand for the product the resource is used to produce.
2. If skilled labor is three times the cost of unskilled labor, a profit-maximizing
firm will vary the quantity of each type of labor until the
a. marginal product of each is the same.
b. amount of unskilled labor used is three times the quantity of skilled labor
c. amount of unskilled labor used is one-third the quantity of skilled labor used.
d. marginal product of unskilled labor is one-third that of skilled labor.
3. The notion that the demand for inputs depends on the demand for outputs is termed
a. inverse demand.
b. derived demand.
c. proportional demand.
d. notational demand.
4. What concept implies that a firm's marginal revenue product curve for labor will
slope downward in the short run?
a. diminishing marginal returns
b. the law of supply
c. the law of decreasing cost
d. the price equalization principle
5. Which one of the following labor resources will likely have the most inelastic
supply schedule in the short run?
a. filling station attendants
b. sales clerks
c. construction laborers
6. Suppose the United Auto Workers' Union succeeded in obtaining a 10 percent
increase in the wages of its workers and that the wage increase caused automobile
prices to rise. Employment in the auto industry would most likely fall if
a. the demand for American-made automobiles was highly elastic.
b. the supply of foreign-produced automobiles was highly inelastic.
c. American consumers considered foreign automobiles a poor substitute for
d. the demand for American automobiles was relatively constant and highly
7. If the demand for a consumer good increases, the demand for resources required to
make the good will
b. remain the same, but the quantity demanded will increase.
c. decrease due to economies of scale.
d. increase or decrease depending on whether the firm is labor intensive or
8. The marginal productivity theory most closely relates to the
a. demand for resources.
b. supply of resources.
c. concept of scarcity.
d. noncompetitive aspects of the resource market.
9. A decrease in demand for a product will cause the output of the product to
a. decline and the demand for and prices of productive resources used to produce
the product to fall.
b. decrease and both the demand for and prices of productive resources used to
produce the product to increase.
c. decrease but the demand for resources used to produce the product will remain
d. increase and the resource prices to rise.
10. If the demand for workers with Ph.Ds. in economics increases, we would expect
a. the wages of economists to increase in the short run and the number of
economists employed to expand in the long run.
b. the supply of economists to increase in the short run and their wages to fall
in the long run.
c. a rapid increase in the supply of economists, causing wages to remain constant.
d. the wages of economists to decline in the short run and the number of
economists employed to increase in the long run.