Question 1

The willingness to work a certain amount of time at a given wage rate is known as

Accepted Answer

A) Labor supply. 
B) Labor demand. 
C) Derived supply. 
A) Labor supply. 
B) Labor demand. 
C) Derived supply.

Question 2

The marginal revenue product of labor is equal to

Accepted Answer

A) The marginal physical product multiplied by the marginal revenue of the output. 
B) The change in the quantity of labor divided by the change in total revenue. 
C) The change in total output divided by the change in the quantity of labor. 
A) The marginal physical product multiplied by the marginal revenue of the output. 
B) The change in the quantity of labor divided by the change in total revenue. 
C) The change in total output divided by the change in the quantity of labor.

Question 3

As an individual earns additional income,the marginal utility of income tends to

Accepted Answer

A) Increase. 
B) Decrease. 
C) Remain constant. 
A) Increase. 
B) Decrease. 
C) Remain constant.

Question 4

If the price for a box of kiwis is $40,the wage rate for kiwi laborers is $10 per hour,and a laborer can pick 3 boxes of kiwis per hour,the

Accepted Answer

A) MRP is $30 per hour. 
B) MPP is $30 per hour. 
C) Cost efficiency is 3/10 of a box per dollar. 
A) MRP is $30 per hour. 
B) MPP is $30 per hour. 
C) Cost efficiency is 3/10 of a box per dollar.

Question 5

Diagram a model of supply and demand for a competitive labor market with a minimum wage in effect.Identify a group that gains and a group that loses when a minimum wage is imposed.

Accepted Answer

See Figure 30.8 for the model in The Eco

Question 6

When people are standing in line for jobs and there are more applicants than jobs,then the labor market is characterized by a

Accepted Answer

A) Shortage of jobs from the point of view of the buyer in the labor market. 
B) Surplus of jobs from the point of view of the seller in the labor market. 
C) Surplus of labor. 
A) Shortage of jobs from the point of view of the buyer in the labor market. 
B) Surplus of jobs from the point of view of the seller in the labor market. 
C) Surplus of labor.

Question 7

-In Figure 30.1,the labor supply could shift from S1 to S2 due to all of the following except

Accepted Answer

A) Fewer workers preferring to work in this labor market. 
B) An increase in the number of workers willing to work in this labor market. 
C) A decrease in the payroll tax on workers. 
A) Fewer workers preferring to work in this labor market. 
B) An increase in the number of workers willing to work in this labor market. 
C) A decrease in the payroll tax on workers.

Question 8

The law of diminishing returns means that marginal costs will eventually rise as a firm produces more.

Accepted Answer

A) True 
 B)False

Question 9

The marginal revenue product establishes

Accepted Answer

A) An upper limit to the wage rate an employer is willing and able to pay. 
B) A lower limit to profit on the sale of a unit of output. 
C) A lower limit to the productivity of a worker. 
A) An upper limit to the wage rate an employer is willing and able to pay. 
B) A lower limit to profit on the sale of a unit of output. 
C) A lower limit to the productivity of a worker.

Question 10

The substitution effect of wages explains shifts in the labor supply curve.

Accepted Answer

A) True 
 B)False

Question 11

Opportunity wage refers to the

Accepted Answer

A) Income an individual loses when he or she quits a job. 
B) Highest wage an individual would earn in his or her best alternative job. 
C) Value of goods and services that could be purchased with a certain individual's income. 
A) Income an individual loses when he or she quits a job. 
B) Highest wage an individual would earn in his or her best alternative job. 
C) Value of goods and services that could be purchased with a certain individual's income.

Question 12

A competitive firm should continue to hire workers until the MRP is equal to

Accepted Answer

A) Demand. 
B) The number of workers hired. 
C) The market wage rate. 
A) Demand. 
B) The number of workers hired. 
C) The market wage rate.

Question 13

If the MPP is declining,ceteris paribus,the MRP must decline.

Accepted Answer

A) True 
 B)False

Question 14

- In Figure 30.1,the shift in the labor supply curve from S1 to S2 means that

Accepted Answer

A) The marginal utility of labor has decreased. 
B) Workers are being paid higher wage rates,given their taste for work. 
C) The marginal utility of labor relative to leisure has increased. 
A) The marginal utility of labor has decreased. 
B) Workers are being paid higher wage rates,given their taste for work. 
C) The marginal utility of labor relative to leisure has increased.

Question 15

A production process is defined as

Accepted Answer

A) The manufacturing of goods and services. 
B) The mix of resources used to produce output. 
C) A means by which labor generates revenue. 
A) The manufacturing of goods and services. 
B) The mix of resources used to produce output. 
C) A means by which labor generates revenue.

Question 16

The intersection of the labor market supply and market demand curves establishes the minimum wage.

Accepted Answer

A) True 
 B)False

Question 17

According to the In The News article "Mauer,Twins Agree to Eight-Year,$184 Million Extension," high salaries of professional baseball player are due to

Accepted Answer

A) A player having a high marginal physical product. 
B) A large supply of players of that caliber. 
C) A player having a high marginal revenue product. 
A) A player having a high marginal physical product. 
B) A large supply of players of that caliber. 
C) A player having a high marginal revenue product.

Question 18

Bill hates to work.He receives a great deal of enjoyment from leisure time.Bill's elasticity of labor supply is

Accepted Answer

A) High. 
B) Low,perhaps even negative. 
C) 1. 
A) High. 
B) Low,perhaps even negative. 
C) 1.

Question 19

If there is an increase in the number of workers who want to work as accountants,there will be a

Accepted Answer

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

Question 20

The market supply curve for labor curve is upward-sloping because

Accepted Answer

A) As the wage rises,most workers want to work fewer hours. 
B) As the wage falls,most workers want to work more hours. 
C) As the wage rises,most workers are willing to work more hours. 
A) As the wage rises,most workers want to work fewer hours. 
B) As the wage falls,most workers want to work more hours. 
C) As the wage rises,most workers are willing to work more hours.

Exam 30: The Labor Market

The willingness to work a certain amount of time at a given wage rate is known as

The marginal revenue product of labor is equal to

As an individual earns additional income,the marginal utility of income tends to

If the price for a box of kiwis is $40,the wage rate for kiwi laborers is $10 per hour,and a laborer can pick 3 boxes of kiwis per hour,the

Diagram a model of supply and demand for a competitive labor market with a minimum wage in effect.Identify a group that gains and a group that loses when a minimum wage is imposed.

When people are standing in line for jobs and there are more applicants than jobs,then the labor market is characterized by a

-In Figure 30.1,the labor supply could shift from S1 to S2 due to all of the following except

The law of diminishing returns means that marginal costs will eventually rise as a firm produces more.

The marginal revenue product establishes

The substitution effect of wages explains shifts in the labor supply curve.

Opportunity wage refers to the

A competitive firm should continue to hire workers until the MRP is equal to

If the MPP is declining,ceteris paribus,the MRP must decline.

- In Figure 30.1,the shift in the labor supply curve from S1 to S2 means that

A production process is defined as

The intersection of the labor market supply and market demand curves establishes the minimum wage.

According to the In The News article "Mauer,Twins Agree to Eight-Year,$184 Million Extension," high salaries of professional baseball player are due to

Bill hates to work.He receives a great deal of enjoyment from leisure time.Bill's elasticity of labor supply is

If there is an increase in the number of workers who want to work as accountants,there will be a

The market supply curve for labor curve is upward-sloping because

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

- In Figure 30.1,the shift in the labor supply curve from S₁ to S₂ means that