Economics MCQs

Page No. 321

If a factor exhibits diminishing marginal product, hiring additional units of the factor will ?


acause a reduction is output

✖


bhave no effect on output

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c increase the marginal product of the factor

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dgenerate ever smaller amounts of output

✓



When capital is owned by the firm as opposed to being directly owned by household capital income may take any of the following forms except ?


ainterest

✖


b dividends

✖


cincreases in stocks of goods

✓


dretained earnings

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Which of the following is not true with regard to workers who have a high value of marginal product? These workers ?


ahave skills that are in relatively scarce supply

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b produce output for which there is great demand

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cusually have little capital with which to work

✓


dare usually highly paid

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An increase in the demand for a firm’s output ?


a decrease the prosperity of the firm but increases the prosperity of the factors hired by the firm

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b decreases the prosperity of both the firms and the factors hired by the firm.

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cincreases the prosperity of both the firm and the factors hired by the firm.

✓


dincreases the prosperity of the firm but decreases the prosperity of the factors hired by the firm.

✖



If both input and output markets are competitive and firms are profit maximizing, then in equilibrium each factor of production earns ?


aan amount equal to the price of output times total output

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bthe amount allocated by the political process

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can equal share of output

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dthe value of its marginal product

✓



An increase in the demand for apples will cause all but which of the following ?


aa decrease in the number of apple pickers employed

✓


ban increase in the value of the marginal product of apple pickers

✖


can increase in the price of apples

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dan increase in the wage of apple pickers

✖



A decrease in the demand or fish ?


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

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

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cdecrease the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry

✓


dincrease the value of the marginal product of fishermen increase their wage and decreases employment in the fishing industry

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The value of the marginal product of labor is ?


athe price of the output times wage of labor

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b the price of the output times the marginal product of labor

✓


c none of these answers

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dthe wage of labor times the quantity of labor

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The most important factors of production are ?


alabor, land, and capital

✓


bwater, earth and knowledge

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cmoney, stocks and bonds.

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dmanagement finance and marketing

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In contestable markets large oligopolistic firms end up behaving like ?


amonopolistically competitive firms

✓


ba cartel

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c perfectly competitive firms

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da monopoly.

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