Question 1

Regardless of gender and ethnicity,more education is associated with higher median earnings.

Accepted Answer

A) True 
 B)False

Question 2

Suppose that Mike wants to pay efficiency wages to help in the construction of his beach home.If the prevailing wage rate for electricians is $22 per hour in his area,one possible efficiency wage he could pay would be:

Accepted Answer

A) $22. 
B) $26. 
C) $18. 
D) the minimum wage. 
A) $22. 
B) $26. 
C) $18. 
D) the minimum wage.

Question 3

Use the following to answer question:
Figure: The Value of the Marginal Product Curve  
-(Figure: The Value of the Marginal Product Curve)Use Figure: The Value of the Marginal Product Curve.In the figure,if a technological advance makes labor more productive and everything else stays the same,then the profit-maximizing quantity of labor:

Accepted Answer

A) will increase. 
B) will decrease. 
C) will stay the same. 
D) cannot be determined. 
A) will increase. 
B) will decrease. 
C) will stay the same. 
D) cannot be determined.

Question 4

Leisure is considered a normal good since people:

Accepted Answer

A) consume more of it all the time. 
B) cannot consume more,it being limited. 
C) consume more of it when their income rises. 
D) find it to be a luxury to take time off from their job. 
A) consume more of it all the time. 
B) cannot consume more,it being limited. 
C) consume more of it when their income rises. 
D) find it to be a luxury to take time off from their job.

Question 5

Use the following to answer question:
Figure: The Demand for Bricklayers  
-(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If the equilibrium market wage for bricklayers is $100 per day,_____ bricklayers will be hired by this masonry firm.

Accepted Answer

A) 4 
B) 5 
C) 6 
D) There is insufficient information to make this decision. 
A) 4 
B) 5 
C) 6 
D) There is insufficient information to make this decision.

Question 6

The opportunity cost of an hour of leisure is always assumed to be equal to the minimum wage.

Accepted Answer

A) True 
 B)False

Question 7

Use the following to answer question:  
-(Table: Value of the Marginal Product of Labor and Demand)Use Table: Value of the Marginal Product of Labor and Demand.In the table,the total product of labor is shown for the hourly production of power cords.Assume that the market for power cords is perfectly competitive.If the price of a power cord is $2,the value of the marginal product for the third worker is:

Accepted Answer

A) $2. 
B) $10. 
C) $60. 
D) $80. 
A) $2. 
B) $10. 
C) $60. 
D) $80.

Question 8

A leftward shift in the labor supply curve will result if:

Accepted Answer

A) people begin to value leisure more highly. 
B) people have less nonlabor income. 
C) transit costs to and from work decline. 
D) the population increases. 
A) people begin to value leisure more highly. 
B) people have less nonlabor income. 
C) transit costs to and from work decline. 
D) the population increases.

Question 9

Holly and Emily both have a BS in nursing from the same college.Both have been nurses for eight years.Holly works from 11 P.M.until 7 A.M. ,and Emily works from 7 A.M.until 3 P.M.Holly's salary is $1,000 per month higher than is Emily's salary.This is an example of a wage disparity due to a compensating differential.

Accepted Answer

A) True 
 B)False

Question 10

Use the following to answer question:  
-(Table: Value of the Marginal Product of Labor and Demand)Use Table: Value of the Marginal Product of Labor and Demand.In the table,the total product of labor is shown for the hourly production of power cords.Assume that the market for power cords is perfectly competitive.If the price of a power cord is $2 and the market wage rate is $100 per hour,the profit-maximizing quantity of labor is _____ workers.

Accepted Answer

A) 0 
B) 2 
C) 4 
D) 6 
A) 0 
B) 2 
C) 4 
D) 6

Question 11

According to the marginal productivity theory of income distribution,if a unit of labor is paid more than a unit of capital,it is because,at the equilibrium quantity of each factor,the value of the _____ product of labor is _____ product of capital.

Accepted Answer

A) marginal;greater than the marginal 
B) marginal;less than the marginal 
C) average;greater than the average 
D) average;less than the average 
A) marginal;greater than the marginal 
B) marginal;less than the marginal 
C) average;greater than the average 
D) average;less than the average

Question 12

Although improved technology can either increase or decrease the demand for a factor of production,the usual effect of technological progress is to reduce demand for labor,holding everything else constant.

Accepted Answer

A) True 
 B)False

Question 13

When a person becomes better educated and is able to produce a better product,the person's education is an improvement in:

Accepted Answer

A) human capital. 
B) physical capital. 
C) land. 
D) labor. 
A) human capital. 
B) physical capital. 
C) land. 
D) labor.

Question 14

According to the marginal productivity theory of income distribution,if a unit of labor is paid more than a unit of capital,it is because,at the equilibrium quantity of each factor,the value of the marginal product of labor is proportionately greater than the value of the marginal product of capital.

Accepted Answer

A) True 
 B)False

Question 15

The _____ effect of a _____ wage causes individuals to substitute _____.

Accepted Answer

A) substitution;higher;labor for leisure 
B) income;higher;labor for leisure 
C) substitution;lower;labor for leisure 
D) complementary;constant;leisure for labor 
A) substitution;higher;labor for leisure 
B) income;higher;labor for leisure 
C) substitution;lower;labor for leisure 
D) complementary;constant;leisure for labor

Question 16

In the United States,the median earnings of Hispanics are greater than the median earnings of African Americans.

Accepted Answer

A) True 
 B)False

Question 17

Since the 1960s,the number of women in the labor force has decreased.

Accepted Answer

A) True 
 B)False

Question 18

Use the following to answer question:
Figure: The Demand for Bricklayers  
-(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.The equilibrium market wage for bricklayers is determined by:

Accepted Answer

A) the firm hiring the bricklayers. 
B) demand and supply in the market for bricklayers. 
C) the government. 
D) where VMPLbricklayers = MPbricklayers × P of output. 
A) the firm hiring the bricklayers. 
B) demand and supply in the market for bricklayers. 
C) the government. 
D) where VMPLbricklayers = MPbricklayers × P of output.

Question 19

Use the following to answer question:
Figure: The Demand for Bricklayers  
-(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If a shortage in the market for mortar lowers bricklayers' productivity,then the value of the marginal product of the eighth bricklayer will be:

Accepted Answer

A) less than $80. 
B) greater than $100. 
C) equal to $100. 
D) greater than $80. 
A) less than $80. 
B) greater than $100. 
C) equal to $100. 
D) greater than $80.

Question 20

If John's wage increases from $10 to $12 per hour,his opportunity cost of leisure has decreased.

Accepted Answer

A) True 
 B)False

Regardless of gender and ethnicity,more education is associated with higher median earnings.

Suppose that Mike wants to pay efficiency wages to help in the construction of his beach home.If the prevailing wage rate for electricians is $22 per hour in his area,one possible efficiency wage he could pay would be:

Leisure is considered a normal good since people:

Use the following to answer question: Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If the equilibrium market wage for bricklayers is $100 per day,_____ bricklayers will be hired by this masonry firm.

The opportunity cost of an hour of leisure is always assumed to be equal to the minimum wage.

A leftward shift in the labor supply curve will result if:

According to the marginal productivity theory of income distribution,if a unit of labor is paid more than a unit of capital,it is because,at the equilibrium quantity of each factor,the value of the _ product of labor is _ product of capital.

Although improved technology can either increase or decrease the demand for a factor of production,the usual effect of technological progress is to reduce demand for labor,holding everything else constant.

When a person becomes better educated and is able to produce a better product,the person's education is an improvement in:

The ___ effect of a _ wage causes individuals to substitute ___.

In the United States,the median earnings of Hispanics are greater than the median earnings of African Americans.

Since the 1960s,the number of women in the labor force has decreased.

Use the following to answer question: Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.The equilibrium market wage for bricklayers is determined by:

Use the following to answer question: Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If a shortage in the market for mortar lowers bricklayers' productivity,then the value of the marginal product of the eighth bricklayer will be:

If John's wage increases from $10 to $12 per hour,his opportunity cost of leisure has decreased.

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

Exam 19: Factor Markets and the Distribution of Income

Regardless of gender and ethnicity,more education is associated with higher median earnings.

Suppose that Mike wants to pay efficiency wages to help in the construction of his beach home.If the prevailing wage rate for electricians is $22 per hour in his area,one possible efficiency wage he could pay would be:

Leisure is considered a normal good since people:

Use the following to answer question: Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If the equilibrium market wage for bricklayers is $100 per day,_____ bricklayers will be hired by this masonry firm.

The opportunity cost of an hour of leisure is always assumed to be equal to the minimum wage.

A leftward shift in the labor supply curve will result if:

According to the marginal productivity theory of income distribution,if a unit of labor is paid more than a unit of capital,it is because,at the equilibrium quantity of each factor,the value of the _____ product of labor is _____ product of capital.

Although improved technology can either increase or decrease the demand for a factor of production,the usual effect of technological progress is to reduce demand for labor,holding everything else constant.

When a person becomes better educated and is able to produce a better product,the person's education is an improvement in:

The _____ effect of a _____ wage causes individuals to substitute _____.

In the United States,the median earnings of Hispanics are greater than the median earnings of African Americans.

Since the 1960s,the number of women in the labor force has decreased.

Use the following to answer question: Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.The equilibrium market wage for bricklayers is determined by:

Use the following to answer question: Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers)Use Figure: The Demand for Bricklayers.If a shortage in the market for mortar lowers bricklayers' productivity,then the value of the marginal product of the eighth bricklayer will be:

If John's wage increases from $10 to $12 per hour,his opportunity cost of leisure has decreased.

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

According to the marginal productivity theory of income distribution,if a unit of labor is paid more than a unit of capital,it is because,at the equilibrium quantity of each factor,the value of the _ product of labor is _ product of capital.

The ___ effect of a _ wage causes individuals to substitute ___.