Production Factors MCQs

Option A: Wages rise, and rental rates fall

Option B: Wages rise, and rental rates rise

Option C: Wages fall, and rental rates rise

Option D: Wages fall, and rental rates fall

Correct Answer: Wages rise, and rental rates fall ✔

Option A: left and decreases the wage

Option B: right and decreases the wage

Option C: right and increases the wage

Option D: left and increases the wage

Correct Answer: right and increases the wage ✔

Option A: the wage, the rental price of capital and the rental price of land are all equal

Option B: the marginal product of labor equals zero and the production function is maximized

Option C: the value of the marginal product of labor equals the wage

Option D: the marginal product of labor equals the wage

Correct Answer: the value of the marginal product of labor equals the wage ✔

Option A: Slopes downward because an increase in the production of output reduces the price at which the output can be sold in a competitive market, thereby reducing the value of the marginal producing the value of the marginal product as more of the factor is use

Option B: Slopes downward due to the factor’s diminishing marginal product

Option C: slopes upward due to the factor’s increasing marginal product

Option D: is perfectly elastic (horizontal) if the factor market is perfectly competitive

Correct Answer: B. Slopes downward due to the factor’s diminishing marginal product ✔

Option A: an increase in the rental rate for tractor

Option B: a decrease in the rental rate of farmland

Option C: a decrease in the value of the marginal product of tractors

Option D: an increase in the wage of farm workers

Correct Answer: an increase in the wage of farm workers ✔

Option A: increase the demand for fishing boats and decrease rental rates on fishing boats

Option B: decreases the demand for fishing boats and increase rental rates on fishing boats.

Option C: decreases the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry

Option D: increase the demand for fishing boats and increase rental rates on fishing boats

Correct Answer: decreases the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry ✔

Option A: supply curve of capital

Option B: demand curve for capital

Option C: production function

Option D: marginal cost curve

Correct Answer: demand curve for capital ✔

Option A: cause a reduction is output

Option B: have no effect on output

Option C: increase the marginal product of the factor

Option D: generate ever smaller amounts of output

Correct Answer: generate ever smaller amounts of output ✔

Option A: interest

Option B: dividends

Option C: increases in stocks of goods

Option D: retained earnings

Correct Answer: increases in stocks of goods ✔

Option A: have skills that are in relatively scarce supply

Option B: produce output for which there is great demand

Option C: usually have little capital with which to work

Option D: are usually highly paid

Correct Answer: usually have little capital with which to work ✔

Option A: decrease the prosperity of the firm but increases the prosperity of the factors hired by the firm

Option B: decreases the prosperity of both the firms and the factors hired by the firm.

Option C: increases the prosperity of both the firm and the factors hired by the firm.

Option D: increases the prosperity of the firm but decreases the prosperity of the factors hired by the firm.

Correct Answer: increases the prosperity of both the firm and the factors hired by the firm. ✔

Option A: an amount equal to the price of output times total output

Option B: the amount allocated by the political process

Option C: an equal share of output

Option D: the value of its marginal product

Correct Answer: the value of its marginal product ✔

Option A: a decrease in the number of apple pickers employed

Option B: an increase in the value of the marginal product of apple pickers

Option C: an increase in the price of apples

Option D: an increase in the wage of apple pickers

Correct Answer: a decrease in the number of apple pickers employed ✔

Option A: decrease the value of the marginal product of fishermen reduces their wage, and reduces employment in the fishing industry

Option B: increase the value of the marginal product of fishermen increase their wage, and increase employment in the fishing industry.

Option C: decrease the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry

Option D: increase the value of the marginal product of fishermen increase their wage and decreases employment in the fishing industry

Correct Answer: decrease the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry ✔

Option A: the price of the output times wage of labor

Option B: the price of the output times the marginal product of labor

Option C: none of these answers

Option D: the wage of labor times the quantity of labor

Correct Answer: the price of the output times the marginal product of labor ✔

Option A: labor, land, and capital

Option B: water, earth and knowledge

Option C: money, stocks and bonds.

Option D: management finance and marketing

Correct Answer: labor, land, and capital ✔