Exam 4

Question 1

Broadly defined, technological advances

Answer 1

comprises new and improved goods and services and new and improved ways of producing or distributing

Question 2

In economists’ models, technological advance occurs in

Answer 2

a very long run

Question 3

Technological advance in a three - step process involving

Answer 3

Invention, Innovation, diffusion

Question 4

The successful commercial introduction of a new product, the use of a new method, or the creation of a new form of business enterprise is called

Answer 4

Innovation

Question 5

the first discovery, as opposed to the first commercial application, of the water - soluble material used in contact lens is an example of

Answer 5

Invention

Question 6

About ____ percent of business R&D spending is for basic research

Answer 6

6

Question 7

Entrepreneurs

Answer 7

often form small companies

Question 8

Process innovation causes an upward shift in a firm’s total product curve and

Answer 8

downward shift in its average total cost curve

Question 9

process innovation can be depicted as

Answer 9

upward shift in a firms total product curve

Question 10

as it relates to R&D, the imitation problem is that

Answer 10

Firms rival may be able to imitate its new product or process greatly reducing the originators profit from its R&D

Question 11

All of the following increase the expected rate of return on R&D expenditures except

Answer 11

Imitation by others

Question 12

Legal protections against direct copying of written material are called ____ Legal protection against using a product’s name are called ____-

Answer 12

Patents and trademarks

Question 13

Which pair of market structures provide firms with the greatest ability to finance R&D out of retained earnings

Answer 13

Oligopolies and pure monopoly

Question 14

Which of the following market structures do economist generally agree is the least conductive to R&D and innovation

Answer 14

Pure monopoly

Question 15

In the invented U - theory

Answer 15

R&D expenditures first rise a percentage of firm sales as industry concentration increases, but then fall as higher industry concentration occurs

Question 16

In a purely competitive resource market, a firm that hires labor is

Answer 16

Wage takers

Question 17

the strength of the demand for a resource depends on the

Answer 17

Productivity of the resources

Question 18

an increase in the demand for computers leads to an increase in demand for computer programmers. this situation arises because

Answer 18

The demand for programmers is a derived demand

Question 19

Why is the demand for labor, referred to as a “derived” demand

Answer 19

Demand for labor is derived from the production and demand for the product being demanded, if demand for product 1) price will increase 2) demand for production labor will increase until equilibrium price and production numbers are met

Question 20

Refer to the above graph, where TP= labor input. The marginal revenue product of labor MRP for a purely competitive firm

Answer 20

decreases

Question 21

Marginal revenue product describes the

Answer 21

Revenue received for the output produced by the last unit of labor employed

Question 22

If the marginal revenue product (MRP) of labor is less than the wage rate

Answer 22

Less labor should be employed

Question 23

Refer to the above table. At a wage rate of $11, the firm will choose to employ

Answer 23

5

Question 24

Which is an example of a change in product demand that increases labor demand

Answer 24

Tourism increases in popularity, increasing the demand for workers at tourist resorts

Question 25

Gambling increases in popularity, thus increasing the demand for card dealers at casinos. this would be caused by which change in a determinant of labor demand

Answer 25

an increase in product demand

Question 26

A technological improvement that causes an increase in the marginal product of resource will

Answer 26

Increase in the marginal revenue product

Question 27

Suppose capital is readily substitutable for labor and that the price of capital falls. we can conclude that

Answer 27

Substitution effect tends to reduce the demand for labor

Question 28

If capital and labor are used in a rigidly fixed proportions and the price of capital falls, it can be concluded that

Answer 28

can be made as to effect on labor demand (increase)

Question 29

In percentage terms, which occupation is expected to be the fastest growing from 1998 to 2008

Answer 29

personal care aids

Question 30

The more inelastic the demand for a resource the

Answer 30

The more (fewer) good substitute resource available

Question 31

If the price level rises by 4 percent in a year and nominal wages increase by 2 percent, then real wages will

Answer 31

Decrease by 2 percent

Question 32

Productivity measures (such as output per worker - hour) and wage rates adjusted for inflation in the United States are

Answer 32

Directly but not closely related

Question 33

A characteristic of a purely competitive labor market would be

Answer 33

Money firms competing in hiring workers "Wage takers:

Question 34

In pure competition, a profit maximizing firm will equate the marginal revenue product of labor with the

Answer 34

Wage rate

Question 35

Refer to the above table and information. What is the marginal revenue product of the fifth worker

Answer 35

$9

Question 36

Refer to the above table and information. What will be the equilibrium wage rate?

Answer 36

the equilibrium is $8 and the firm will employ 150

Question 37

Refer to above table and information. What will be the marginal labor cost and wage rate for the individual firm?

Answer 37

$5 and hire 5 workers

Question 38

The best example of a monopsonist is

Answer 38

A large army post in a small community

Question 39

The level of employment in the labor market shown above will be

Answer 39

B

Question 40

A craft union

Answer 40

Organized workers who have similar jobs in an industry/ labor union of people of the same skill set

Question 41

The best example of an industrial union is the

Answer 41

United auto workers

Question 42

Refer to the above graph. A monopsonist will set the wage at

Answer 42

Wm

Question 43

In a bilateral monopoly there is

Answer 43

Monopsonist facing a monopolist

Question 44

Critics of the minimum wage argue that an increase in the minimum wage rate above the equilibrium rate of a purely competitive labor market would

Answer 44

Increase unemployment in the labor market

Question 45

In the labor market shown above, if a minimum wage level is set at Wm, it will cause

Answer 45

Employment will decrease from B to A