Question 1

If Reagan's substitution effects outweigh her income effects,her labor supply curve will

Accepted Answer

A) Appear horizontal. 
B) Slope upward. 
C) Bend backward. 
A) Appear horizontal. 
B) Slope upward. 
C) Bend backward.

Question 2

The opportunity cost of working is the

Accepted Answer

A) Wage rate. 
B) Earnings that could be made in an alternative job. 
C) Value of leisure time that must be given up. 
A) Wage rate. 
B) Earnings that could be made in an alternative job. 
C) Value of leisure time that must be given up.

Question 3

If Amber is willing to work additional hours if her wage rate increases,the substitution effect must outweigh the income effect.

Accepted Answer

A) True 
 B)False

Question 4

The number of hours that a worker is willing to work is determined by the trade-off between the increasing

Accepted Answer

A) Total utility of income and the decreasing marginal utility of leisure. 
B) Marginal utility of leisure and the decreasing marginal utility of income. 
C) Total utility of leisure and the decreasing total utility of income. 
A) Total utility of income and the decreasing marginal utility of leisure. 
B) Marginal utility of leisure and the decreasing marginal utility of income. 
C) Total utility of leisure and the decreasing total utility of income.

Question 5

Kip will work fewer hours if his salary increases.For Kip,the ___________ effect must outweigh the __________ effect.

Accepted Answer

A) substitution;income 
B) income;substitution 
C) income;utility 
A) substitution;income 
B) income;substitution 
C) income;utility

Question 6

- Assume that the product price is $4 per unit and that the hourly wage for workers is $12.Neither price nor wage changes with output.In Table 30.3,the contribution to total revenue of the fourth worker hired is

Accepted Answer

A) $76 per hour. 
B) $16 per hour. 
C) $4 per hour. 
A) $76 per hour. 
B) $16 per hour. 
C) $4 per hour.

Question 7

If the demand for alarm clocks decreases,the effect on the alarm clock job market will be to

Accepted Answer

A) Increase the demand for labor and increase equilibrium wages. 
B) Reduce the supply of labor and increase equilibrium wages. 
C) Decrease the demand for labor and reduce equilibrium wages. 
A) Increase the demand for labor and increase equilibrium wages. 
B) Reduce the supply of labor and increase equilibrium wages. 
C) Decrease the demand for labor and reduce equilibrium wages.

Question 8

If the wage rate drops,an employer will be willing to hire more workers,ceteris paribus.

Accepted Answer

A) True 
 B)False

Question 9

The opportunity cost of working is the amount of leisure time that must be given up in order to work.

Accepted Answer

A) True 
 B)False

Question 10

If consumers decide to buy fewer strawberries,then the

Accepted Answer

A) Demand for strawberry pickers will fall. 
B) Demand for strawberry pickers will rise. 
C) Quantity demanded of strawberry pickers will fall. 
A) Demand for strawberry pickers will fall. 
B) Demand for strawberry pickers will rise. 
C) Quantity demanded of strawberry pickers will fall.

Question 11

Marginal physical product diminishes as additional workers are hired because

Accepted Answer

A) Each worker has an increasingly smaller amount of other factors with which to work. 
B) Each worker has an increasingly larger amount of other factors with which to work. 
C) Later hires are not as skilled as earlier hires. 
A) Each worker has an increasingly smaller amount of other factors with which to work. 
B) Each worker has an increasingly larger amount of other factors with which to work. 
C) Later hires are not as skilled as earlier hires.

Question 12

Joe Sabia,an assistant professor of public policy at American University in Washington,DC,says that a 10 percent increase in the minimum wage reduces retail employment by 1 percent and reduces employment among young workers by 3.4 percent.If President Obama is successful increasing the minimum wage by 30 percent as explained in "Obama Wants $9.50 Minimum Wage," we can expect

Accepted Answer

A) Employment to decrease by about 30 percent and prices to increase. 
B) Unemployment to increase by about 30 percent and prices to decrease. 
C) Retail employment to decrease by about 3 percent and young workers' employment to decrease by about 10.2 percent. 
A) Employment to decrease by about 30 percent and prices to increase. 
B) Unemployment to increase by about 30 percent and prices to decrease. 
C) Retail employment to decrease by about 3 percent and young workers' employment to decrease by about 10.2 percent.

Question 13

Which of the following is true about the equilibrium market wage?

Accepted Answer

A) All workers are satisfied with the wage. 
B) All employers are satisfied with the wage. 
C) There is no unemployment in the market at the equilibrium wage. 
A) All workers are satisfied with the wage. 
B) All employers are satisfied with the wage. 
C) There is no unemployment in the market at the equilibrium wage.

Question 14

- In Figure 30.2,unemployed labor at the equilibrium wage is equal to

Accepted Answer

A) 34 workers. 
B) 28 workers. 
C) Zero workers. 
A) 34 workers. 
B) 28 workers. 
C) Zero workers.

Question 15

The marginal physical product of labor is equal to

Accepted Answer

A) Total output divided by the quantity of labor. 
B) The percentage change in total output divided by the percentage change in quantity of labor. 
C) The change in total output divided by the change in quantity of labor. 
A) Total output divided by the quantity of labor. 
B) The percentage change in total output divided by the percentage change in quantity of labor. 
C) The change in total output divided by the change in quantity of labor.

Question 16

If leisure activities become more attractive,there will be a

Accepted Answer

A) Rightward shift of the labor supply curve. 
B) Leftward shift of the labor supply curve. 
C) Movement up the labor supply curve to the right. 
A) Rightward shift of the labor supply curve. 
B) Leftward shift of the labor supply curve. 
C) Movement up the labor supply curve to the right.

Question 17

The most cost-efficient input is the one that can produce the most revenue per unit of input.

Accepted Answer

A) True 
 B)False

Question 18

The marginal revenue product sets an upper limit to the wage rate an employer will pay.

Accepted Answer

A) True 
 B)False

Question 19

When there are more qualified applicants than job openings,this indicates that the

Accepted Answer

A) Economy must be in a recession. 
B) Labor supply curve must be backward-bending. 
C) Wages being offered are too high. 
A) Economy must be in a recession. 
B) Labor supply curve must be backward-bending. 
C) Wages being offered are too high.

Question 20

An effective minimum wage creates a surplus of labor and increases the level of unemployment.

Accepted Answer

A) True 
 B)False

Exam 30: The Labor Market

If Reagan's substitution effects outweigh her income effects,her labor supply curve will

The opportunity cost of working is the

If Amber is willing to work additional hours if her wage rate increases,the substitution effect must outweigh the income effect.

The number of hours that a worker is willing to work is determined by the trade-off between the increasing

Kip will work fewer hours if his salary increases.For Kip,the ___________ effect must outweigh the __________ effect.

- Assume that the product price is $4 per unit and that the hourly wage for workers is $12.Neither price nor wage changes with output.In Table 30.3,the contribution to total revenue of the fourth worker hired is

If the demand for alarm clocks decreases,the effect on the alarm clock job market will be to

If the wage rate drops,an employer will be willing to hire more workers,ceteris paribus.

The opportunity cost of working is the amount of leisure time that must be given up in order to work.

If consumers decide to buy fewer strawberries,then the

Marginal physical product diminishes as additional workers are hired because

Which of the following is true about the equilibrium market wage?

- In Figure 30.2,unemployed labor at the equilibrium wage is equal to

The marginal physical product of labor is equal to

If leisure activities become more attractive,there will be a

The most cost-efficient input is the one that can produce the most revenue per unit of input.

The marginal revenue product sets an upper limit to the wage rate an employer will pay.

When there are more qualified applicants than job openings,this indicates that the

An effective minimum wage creates a surplus of labor and increases the level of unemployment.

Economics: the Core Issues Appendix: Using Graphs

The Us Economy: a Global View

Supply and Demand

The Role of Government

National Income Accounting

Unemployment

Inflation

The Business Cycle

Aggregate Demand Appendix: the Keynesian Cross

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice Appendix: Indifference Curves

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty Glossary Index Reference Tables

Filters

Kip will work fewer hours if his salary increases.For Kip,the _ effect must outweigh the effect.