Economics, 11e, Global Edition (Parkin) Chapter 18 Markets for Factors of Production1 The Anatomy of Factor Markets1) Which of the following groups lists the four factors of production?A) labor, capital, land, entrepreneurshipB) labor, capital, land, moneyC) labor, money, land, entrepreneurshipD) labor, capital, money, entrepreneurshipAnswer: ATopic: Factors of ProductionSkill: DefinitionStatus: OldAACSB: Analytical Skills2) Profit is the factor price for _.A) capitalB) landC) entrepreneurshipD) laborAnswer: CTopic: Factor Prices and IncomesSkill: DefinitionStatus: OldAACSB: Analytical Skills3) Coal is an example ofA) a nonrenewable natural resource.B) a renewable natural resource.C) capital.D) a casual resource.Answer: ATopic: Study Guide Question, Nonrenewable Natural ResourceSkill: ConceptualStatus: OldAACSB: Analytical Skills4) Water from the Mississippi river is an example ofA) a nonrenewable natural resource.B) a renewable natural resource.C) capital.D) a static resource.Answer: BTopic: Study Guide Question, Nonrenewable Natural ResourceSkill: ConceptualStatus: OldAACSB: Analytical Skills2 The Demand for a Factor of Production1) The demand for a productive resource, not for its own sake, but for use in the production of goods and services is called a _.A) goods and services demandB) production demandC) derived demandD) resource demandAnswer: CTopic: Derived DemandSkill: DefinitionStatus: OldAACSB: Analytical Skills2) The demand for factor is driven by the demand for goods and services produced by that factor of production. This phenomenon is referred to asA) elastic demand.B) joint demand.C) inverse demand.D) derived demand.Answer: DTopic: Derived DemandSkill: DefinitionStatus: OldAACSB: Analytical Skills3) The demand for labor is a derived demand because it is derived fromA) the supply of labor.B) union pressure.C) the demand for the output the labor produces.D) natural law.Answer: CTopic: Derived DemandSkill: DefinitionStatus: OldAACSB: Analytical Skills4) Consider the demand for labor in the computer chip industry. The demand for laborA) is derived from the demand for computer chips.B) is shown by a perfectly elastic demand for labor.C) is shown by a perfectly inelastic demand for labor.D) has a demand curve that is backward bending.Answer: ATopic: Derived DemandSkill: ConceptualStatus: OldAACSB: Analytical Skills5) The demand for the services of labor _ a derived demand and the demand for the services of land _ a derived demand.A) is; isB) is; is notC) is not; isD) is not; is notAnswer: ATopic: Derived DemandSkill: ConceptualStatus: OldAACSB: Analytical Skills6) The marginal product of labor is theA) change in total product produced by hiring an additional unit of labor.B) total revenue divided by units of labor.C) extra revenue gained by selling one more unit of output produced by hiring additional units of labor.D) extra revenue gained by employing one more unit of labor.Answer: ATopic: Marginal ProductSkill: DefinitionStatus: OldAACSB: Analytical Skills7) The value of an additional baker to a bakery is equal to theA) price of bread.B) value of marginal product of the baker.C) bakers marginal productivity in terms of loaves of bread.D) marginal cost of making an additional loaf of bread.Answer: BTopic: Value of Marginal ProductSkill: ConceptualStatus: NewAACSB: Analytical Skills8) The change in total revenue that results from employing one more unit of labor is called theA) wage rate.B) value of marginal product of labor.C) average revenue.D) marginal product of labor.Answer: BTopic: Value of Marginal ProductSkill: DefinitionStatus: OldAACSB: Analytical Skills9) The value of marginal product (VMP) of an input such as labor is theA) additional output produced by the last unit of an input.B) total revenue divided by the units of the input employed.C) extra revenue gained by selling one more unit of output.D) extra revenue gained by employing one more unit of the input.Answer: DTopic: Value of Marginal ProductSkill: DefinitionStatus: OldAACSB: Analytical Skills10) The value of marginal product (VMP) of labor is the extra revenue generated byA) selling one additional unit of output.B) raising the price of the good by one dollar.C) hiring one additional unit of labor.D) price discrimination.Answer: CTopic: Value of Marginal ProductSkill: DefinitionStatus: OldAACSB: Analytical Skills11) The value of marginal product of labor is the increase inA) revenue created by producing one more unit of output.B) revenue created by hiring one more unit of labor.C) total product necessary to make