General Study Notes Creation Quiz

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Questions and Answers

The four factors of production are

productive factors, neutral factors, entrepreneurial factors, and nonproductive factors.
machines, factories, buildings, and farms.
men, women, animals, and children.
labour, money, profits, and land.
labour, capital, entrepreneurship, and land. (correct)

Profit is the factor price for

capital.
capital services.
labour.
land.
entrepreneurship. (correct)

Coal is an example of

capital.
a common resource.
capital.
a renewable natural resource.
a nonrenewable natural resource. (correct)

Water from the Mackenzie River is an example of

a natural resource that can be used repeatedly. (C) Signup and view all the answers

Natural resources that are depleted as they are used

are called nonrenewable natural resources. (C) Signup and view all the answers

An example of a nonrenewable natural resource is

oil. (A) Signup and view all the answers

Choose the statement that is incorrect.

Most capital services are traded in a market. (C) Signup and view all the answers

Firms hire labour

to maximize profit. (D) Signup and view all the answers

To maximize profit, a firm hires labour until

the value of marginal product equals the wage rate. (D) Signup and view all the answers

To maximize profit, the firm must equate the

value of marginal product to the factor price. (D) Signup and view all the answers

The value of marginal product of labour is the revenue

generated by the employment of an additional unit of labour. (D) Signup and view all the answers

If marginal product of a restaurant employee is 10 customers per hour, and the price of a meal is $15, the restaurant employee's value of marginal product is

150 (D) Signup and view all the answers

Suppose a gift shop in Corner Brook Newfoundland hires workers to personalize ornaments for Christmas. The store sells the personalized ornaments for $6 each. The value of marginal product of this store's fourth worker is $60. The marginal product of the fourth worker is

10 ornaments. (D) Signup and view all the answers

If the marginal product of a baker is 10 loaves of bread, and the price of a loaf of bread is $2, the baker's value of marginal product is

20.00. (E) Signup and view all the answers

The Brown's Egg store in Lethbridge Alberta hires workers to paint eggs. The price of an egg is $2.50. The value of marginal product of this store's fifth worker is $25. The marginal product of the fifth worker is

10 eggs. (C) Signup and view all the answers

Refer to Table 18.2.1. If the firm can sell all the output it wants for the price of $5 a unit, what is the value of marginal product of the 6th worker?

25 (D) Signup and view all the answers

Refer to Table 18.2.1. If the firm can sell all the output it wants for the price of $4 a unit, what is the profit-maximizing number of workers if the wage rate is $12?

8 (A) Signup and view all the answers

If the price of the firm's output decreases, the value of marginal product curve

shifts to the left. (B) Signup and view all the answers

Mr. Shaw has a small factory in Estevan Saskatchewan. He will continue hiring labour as long as the value of marginal product of labour ________ the wage rate.

is greater than (D) Signup and view all the answers

Flashcards

Factors of Production

The essential inputs used in the production of goods and services, including labor, capital, entrepreneurship, and land.

Factor Price

The payment received for the services of a factor of production, such as wages for labor, rent for land, interest for capital, and profit for entrepreneurship.