AP Microeconomics Practice Test: Factor Markets

Test Information

Question 5 questions

Time 6 minutes

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1. Your aunt runs a small firm from her home making apple pies. She hires some friends to help her. Which of the following situations would most likely increase her demand for labor?

2. The price of labor is $2, and the price of capital is $1. The marginal product of labor is 200, and the marginal product of capital is 50. What should the firm do?

3. A competitive labor market is currently in equilibrium. Which of the following most likely increases the market wage?

4.

If a firm is hiring labor in the perfectly competitive labor market, the wage and employment are

5.

If a firm hires labor in a monopsony labor market, the wage and employment are