📚

All Subjects

🤑

AP Micro

💰

Unit 5

5.5 Multiple Choice Questions

4 min read•december 12, 2021

AP Microeconomics 🤑

95 resources

See Units

Multiple Choice Practice for Factor Markets

Welcome to Unit 5 AP Macroeconomics Multiple Choice Questions! Grab some paper and a pencil 📄 to record your answers as you go. You can see how you did on the Unit 5 Practice Questions Answers and Review sheet once you're done. Don't worry, we have tons of resources available if you get stumped 😕 on a question. And if solo study is not your thing, join a group in Hours!

Not ready to take a quiz yet? Take a look at the Intro to Unit 5.

Image courtesy of Pixabay

Facts about the test: The AP Microeconomics exam has 70 multiple choice questions and you will be given 1 hour to complete the section. That means it should take you around 8 minutes to complete 10 questions.

*The following questions were not written by College Board and, although they cover information outlined in the AP Microeconomics Course and Exam Description, the formatting on the exam may be different.

1. What is the least amount employers can legally pay their employees?

A. law of decreasing wages

B. wage law

C. minimum wage

D. minimum pay

2. Choose the correct factor payments for land, labor, capital, and entrepreneurship.

A. rent, wage, interest, and profit

B. rent, pay, revenue, and money

C. real estate, workers, interest, and cash

D. rent, pay, interest, and capital

3. There is ___________ relationship between wage and the quantity of labor demanded.

A. not a

B. a contentious

C. a direct

D. an inverse

4. Which of the following is the correct formula for marginal resource cost (MRC)?

A. MRC= Change in total cost/ Change in inputs

B. MRC=Change in total product/Change in total costs

C. MRC = Change in inputs/Change in total costs

D. MRC= Total costs/Quantity of inputs

5. Which of the following is the correct formula for marginal revenue product (MRP)?

A. MRP= Change in inputs/ Change in total product

B. MRP= Change in total profit/change in revenue

C. MRP= Change in total costs/change in input

D. MRP= Change in total revenue/change in inputs

6.A business's demand for labor is known as derived demand because

A. a worker's pay depends on how much human capital has been invested by the business.

B. workers want to work and try to keep their wages low to attract businesses.

C. the business gains more total revenue through hiring more workers

D. the number of workers needed depends on the products demanded by consumers in the product market.

7. All of the following are shifters for the demand for labor EXCEPT:

A. Price of an inferior good

B. Price of the product

C. Productivity of the worker

D. Change in price of substitute goods or complementary goods.

8. All of the following are shifters for the supply of labor EXCEPT:

A. Education and Training

B. Cultural expectations

C. Working conditions

D. A change in the price of a substitute good

9. The least cost rule is _____________.

A. MPx/Px = MPy/Py

B. MPx + MPy =1

C. MPx/MPy

D. MPx-MPy/Mpy

10. A toy company has just built an assembly line which includes robots and machinery to make dolls. They begin to hire humans to maintain the machines. As more workers get hired, an economist will expect

A. marginal product will increase sharply and then rise at a reduced rate as more people are hired.

B. marginal product will be negative as more people are hired.

C. marginal product will decrease at first and then rebound to equilibrium as more people are hired.

D. marginal product will increase at first and then decrease as more people are hired.

11. In a perfectly competitive labor market, the individual firm's _____________ is perfectly elastic.

A. MRC

B. MRP

C. MP

D. Market supply

12. The structure of a factor market where the individual business is the wage maker because only one business is hiring workers is called a

A. monopsony.

B. monopoly.

C. perfect competition.

D. monopolistic competition.

13. All of the following are reasons why wages may be different for workers doing the same job EXCEPT

A. geographic immobility

B. not enough information about the job posted

C. wage discrimination

D. low wages

14. If the government sets a minimum wage above equilibrium wage in a perfectly competitive factor market, which of the following is most likely to happen:

A. The quantity of labor demanded will far exceed the supply of labor.

B. Unemployment will rise because companies will reduce hiring low wage workers.

C. There will be a shortage of workers in the factor market.

D. Wages will fall for company CEOs.

15. Unions can lead to different wages in a business because

A. unions enjoy higher production.

B. unions will agree to create similar wages with non-union members

C. unions lower the company costs in general.

D. unions can threaten to strike or use collective bargaining to negotiate higher wages for union members.