Week 13 · Quiz

Week 13 — Quiz · Factor / Labor Markets

Principles of Microeconomics · ECON 1 Fall 2026 · Prof. Kessler Fictional sample

Course: Principles of Microeconomics (ECON 1) · Silver Oak University (fictional sample) · Prof. Kessler
Objective 7 · 10 questions · 10 points · closed to AI · one attempt
Auto-graded (Classic QTI): see F-quiz-week-13-qti.xml for the Canvas import. Every numeric answer is pre-computed; every labor-market claim is verified.

The questions (human-readable; answer key below)

Q1. Labor demand is called "derived demand" because —
A) It depends on how many workers are available in the labor market
B) Firms demand labor because workers produce the output that consumers buy
C) Wages are derived by dividing total output by the number of workers
D) Labor demand rises automatically when wages fall

Q2. A firm produces artisan candles that sell for $4 per unit. The 3rd worker's marginal product of labor is 10 units. What is the VMPL of the 3rd worker?
A) $4 B) $10 C) $14 D) $40

Q3. Using the table below, with a wage of $50 per day, how many workers should the firm hire to maximize profit?

Worker	MPL	VMPL (MPL × $4)
1st	16	$64
2nd	14	$56
3rd	10	$40
4th	6	$24
5th	4	$16

A) 1 worker B) 2 workers C) 3 workers D) 5 workers

Q4. (Multiple-answer — select ALL that apply.) Which of the following will shift the labor-demand curve to the RIGHT?
☑ A) The price of the firm's output rises
☑ B) New technology makes each worker more productive
☐ C) The market wage rises from $15 to $20
☐ D) The number of workers in the labor force increases

Q5. (True/False) The VMPL curve slopes downward because each additional worker earns a lower wage than the previous one. → False

Q6. A coal miner earns more than a grocery store clerk with similar educational backgrounds. The most likely economic explanation is —
A) The grocery store is exercising monopsony power
B) The coal miner has more human capital
C) A compensating differential for the more dangerous and physically demanding work
D) Statistical discrimination against grocery clerks

Q7. If the market wage rises from $50 to $70 and nothing else changes, the firm's labor-demand curve —
A) Shifts left, because labor is now more expensive
B) Shifts right, because the firm needs fewer workers
C) Does not shift — the firm moves to a different point along the same VMPL curve
D) Shifts right, because higher wages attract better workers

Q8. (True/False) When the output price of a good rises, the VMPL of each worker producing that good also rises. → True

Q9. (Matching) Match each term to its description.
- Human capital → Education, training, and experience that raise a worker's productivity
- Compensating differential → A wage premium paid for unpleasant or risky working conditions
- Derived demand → Labor demand that flows from consumer demand for the firm's output
- Monopsony → A labor market with only one or a few dominant buyers of labor

(Distractor: "A wage gap caused by group-based hiring bias.")

Q10. A firm is a price taker in both the product market and the labor market. Its output sells for $5 per unit, the wage is $50, and the 4th worker's MPL = 10. The firm should —
A) Not hire the 4th worker, because 10 < 50
B) Not hire, because the output price is below the wage
C) Hire the 4th worker, because VMPL = 10 × $5 = $50 = wage (breaking even is still fine)
D) Hire all 4 workers and then check total profit

Answer key & feedback (instructor)

Q	Type	Answer	Feedback (the idea)
1	MC	B	Derived demand: workers are demanded because of what they produce for consumers, not intrinsically.
2	MC	D	VMPL = 10 × $4 = $40. Multiply MPL by the output price, not by any other figure.
3	MC	B	VMPL[1]=$64≥$50 ✓; VMPL[2]=$56≥$50 ✓; VMPL[3]=$40<$50 ✗. Hire 2 workers.
4	MA	A, B	Higher output price and higher productivity both raise VMPL at every employment level. A wage rise moves along the curve; a labor-force increase is a supply shift, not a demand shift.
5	TF	False	The VMPL curve slopes down because MPL falls (diminishing marginal product) as employment rises — not because wages fall.
6	MC	C	Compensating differential: extra pay for dangerous/unpleasant conditions when human capital is otherwise equal.
7	MC	C	A wage change is a movement along the VMPL curve (quantity demanded changes), not a shift of the curve.
8	TF	True	VMPL = MPL × P. If P rises and MPL is unchanged, VMPL rises at every employment level.
9	Match	as above	Distractor "wage gap caused by group-based hiring bias" = discrimination — not listed as a pair, used to check understanding.
10	MC	C	VMPL = $50 = wage → hire; breaking even on the marginal worker is acceptable (zero profit on that worker, not a loss).

Quality gate (self-checked): Q2 verified: 10 × $4 = $40 ✓. Q3 verified: VMPL column = {64,56,40,24,16} with P=$4, hire while VMPL≥50 → 2 workers ✓. Q10 verified: VMPL = 10 × $5 = $50 = wage ✓. Q5 and Q8 truth-values checked against model. No free numeric entry; all items are MC/MA/TF/Matching. Distractors target named traps: comparing MPL to wage without multiplying by P; reading a wage change as a curve shift; confusing human capital with compensating differentials.

This is the human-readable quiz with its vetted answer key and rationale. The import-ready Classic-QTI version (F-quiz-week-13-qti.xml) ships inside the course's .imscc package — it lands in the Canvas gradebook on import.

~ Prof. Kessler's edition · Fall 2026 · built with thecoursemaker.com