The income earned by a factor of production is equal to the _____________________________.

marginal product of the factor divided by the price of the good produced by the factor
price of the factor multiplied by the marginal product of the factor
price of the factor multiplied by the quantity of the factor used
marginal revenue multiplied by the marginal product of the factor

An increase in the supply of a factor of production will _______ the price of the factor, _______ the quantity used of the factor, and the income will _______.

decrease; increase; either increase or decrease
increase; decrease; either increase or decrease
decrease; increase; decrease
increase; increase; increase

As the quantity of labour increases in the short run, labour's _______ diminishes.

marginal revenue
average cost
marginal cost
marginal revenue product

In the short run, ___________________ increases the quantity of labour demanded by the firm.

a decrease in the wage rate
technological advance that decreases the marginal product of labour
an increase in the prices of other factors used by the firm
an increase in the firm's output price

The elasticity of the demand for labour depends on all of the following variables except _________________.

the elasticity of demand for the good
labour intensity of the production process
the equilibrium wage rate
the substitutability of capital for labour

If the wage rate paid in the fast-food outlets in a small town is greater than the reservation wage of all the teenagers in the town and less than the reservation wage of all the adults, then the fast-food outlets will hire __________________.

some adults and some teenagers
mostly adults and a few teenagers
only teenagers
only adults

The _______ effect means that, other things remaining the same, the higher the wage rate, the more time people will spend working and the less time people will spend pursuing leisure.

income
price
labour
substitution

At high wage rates, the labour supply curve bends backward because the _______ effect dominates the _______ effect.

income; substitution
substitution; income
income; price
substitution; price

As the interest rate _______, the amount of saving ____________ and the quantity of capital supplied _____________.

increases; decreases; increases
increases; decreases; decreases
increases; increases; increases
decreases; increases; decreases

When the supply of a factor of production is perfectly inelastic, the factor's income is _____________________.

mostly opportunity cost and some economic rent
entirely opportunity cost
entirely economic rent
a combination of economic rent and opportunity cost

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