Labor Economics George Borjas 8th edition – Test Bank

Labor Economics George Borjas 8th edition – Test Bank

Labor Economics, 8e (Borjas) 

Chapter 3   Labor Demand

1) The production function relates

A) factor prices to output prices.

B) wages to labor employed.

C) factors of production to total output.

D) factors of production to profit.

E) the output price to factors of production.

Answer:  C

Difficulty: 1 Easy

Topic:  The Production Function

Bloom’s:  Remember

AACSB:  Reflective Thinking

Accessibility:  Keyboard Navigation

2) The slope of the production function while holding capital fixed is

A) the marginal product of labor.

B) the marginal product of capital.

C) the average product of labor.

D) the labor–capital ratio.

E) the capital–labor ratio.

Answer:  A

Difficulty: 1 Easy

Topic:  The Production Function

Bloom’s:  Remember

AACSB:  Reflective Thinking

Accessibility:  Keyboard Navigation

3) The law of diminishing returns, as it applies to labor, means that

A) the marginal product of labor eventually declines.

B) the marginal product of labor will eventually be a horizontal line at zero.

C) the average product of labor increases at a decreasing rate.

D) the average product of labor starts to decline before the marginal product of labor.

E) the total output eventually decreases.

Answer:  A

Difficulty: 1 Easy

Topic:  The Production Function

Bloom’s:  Remember

AACSB:  Reflective Thinking

Accessibility:  Keyboard Navigation