Question 1

Assume the apple market is competitive.If citizens want wages and the number of available jobs for apple pickers to increase,the best strategy would be to

Accepted Answer

A) Insist that the government establish a minimum wage for apple pickers. 
B) Boycott apples until wages increased. 
C) Buy more apples. 
A) Insist that the government establish a minimum wage for apple pickers. 
B) Boycott apples until wages increased. 
C) Buy more apples.

Question 2

Suppose that Silvia's Dance Studio uses both labor and capital to teach dance lessons.Given her current mix of labor and capital,the cost efficiency of labor is 1 dance lesson per dollar,and the cost efficiency of capital is 5 dance lessons per dollar.Silvia should

Accepted Answer

A) Hire less labor and use more capital. 
B) Use only capital to produce the lessons. 
C) Use less capital and hire more labor. 
A) Hire less labor and use more capital. 
B) Use only capital to produce the lessons. 
C) Use less capital and hire more labor.

Question 3

In general,it can be said that leisure is a "free good."

Accepted Answer

A) True 
 B)False

Question 4

-Table 30.2 shows how many hairstyling appointments a hair salon can schedule per week based on the number of stylists.In the spaces provided,compute the marginal physical product (MPP)of the hair stylists,total revenue,and marginal revenue product of the stylists,assuming that a hair stylist charges $60 per appointment.What is the marginal revenue product of the second hairstylist?

Accepted Answer

A) $80 per week. 
B) $1,200 per week. 
C) $20 per week. 
A) $80 per week. 
B) $1,200 per week. 
C) $20 per week.

Question 5

A decreasing marginal utility of income contributes to the upward slope of an individual's supply curve.

Accepted Answer

A) True 
 B)False

Question 6

The labor supply curve will be positively sloped if the substitution effect of wages is

Accepted Answer

A) Equal to the income effect of wages. 
B) Stronger than the income effect of wages. 
C) Weaker than the income effect of wages. 
A) Equal to the income effect of wages. 
B) Stronger than the income effect of wages. 
C) Weaker than the income effect of wages.

Question 7

If the income effect dominates the substitution effect,the labor supply curve will be backward-bending.

Accepted Answer

A) True 
 B)False

Question 8

When the MPP of labor is zero,ceteris paribus,

Accepted Answer

A) Employment can be increased only by offering a higher wage rate. 
B) No further increases in output can be achieved by using additional units of labor. 
C) MRP is at a maximum. 
A) Employment can be increased only by offering a higher wage rate. 
B) No further increases in output can be achieved by using additional units of labor. 
C) MRP is at a maximum.

Question 9

If we move to the right along the upward-sloping labor supply curve,we observe that the cost of labor

Accepted Answer

A) Increases due to the increasing opportunity cost. 
B) Increases due to the decreasing opportunity cost. 
C) Decreases due to the increasing opportunity cost. 
A) Increases due to the increasing opportunity cost. 
B) Increases due to the decreasing opportunity cost. 
C) Decreases due to the increasing opportunity cost.

Question 10

The argument is sometimes made that the United States should not trade with low-wage countries.The reasoning is that more highly paid U.S.workers cannot compete,and U.S.jobs are lost.What is wrong with this argument?

Accepted Answer

The argument is based on the false premi

Question 11

If the MPP of an additional unit of labor is 3 units per hour,product price is constant at $8 per unit,and the wage rate is $26 per hour,then

Accepted Answer

A) The additional unit of labor should be employed. 
B) The additional unit of labor should not be employed because it costs more than it is worth. 
C) The employer should lower wages and accept less employment of labor. 
A) The additional unit of labor should be employed. 
B) The additional unit of labor should not be employed because it costs more than it is worth. 
C) The employer should lower wages and accept less employment of labor.

Question 12

If the MPP of an additional unit of labor is 4 units per hour,product price is constant at $5 per unit,and the wage rate is $19 per hour,then

Accepted Answer

A) The additional unit of labor should be employed. 
B) The additional unit of labor should not be employed because it costs more than it is worth. 
C) The employer should lower wages and accept less employment of labor. 
A) The additional unit of labor should be employed. 
B) The additional unit of labor should not be employed because it costs more than it is worth. 
C) The employer should lower wages and accept less employment of labor.

Question 13

If a chair can be sold for $20 and it takes a worker two hours to make a chair,the marginal revenue product of this worker is

Accepted Answer

A) $5 per hour. 
B) $10 per hour. 
C) $20 per hour. 
A) $5 per hour. 
B) $10 per hour. 
C) $20 per hour.

Question 14

The determinants of the market supply of labor include all of the following except

Accepted Answer

A) Taxes. 
B) The market wage rate. 
C) Income and wealth. 
A) Taxes. 
B) The market wage rate. 
C) Income and wealth.

Question 15

The opportunity wage is often a better measure of executive pay than

Accepted Answer

A) MPP because executives do not have an MPP. 
B) MRP because of the difficulty in quantifying executive output. 
C) Derived demand because the elasticity of supply for an individual is greater than 1.0. 
A) MPP because executives do not have an MPP. 
B) MRP because of the difficulty in quantifying executive output. 
C) Derived demand because the elasticity of supply for an individual is greater than 1.0.

Question 16

An effective minimum wage will increase the quantity demanded of labor.

Accepted Answer

A) True 
 B)False

Question 17

If wages are relatively high,the individual labor supply curve may

Accepted Answer

A) Become horizontal. 
B) Bend backward. 
C) Bend outward. 
A) Become horizontal. 
B) Bend backward. 
C) Bend outward.

Question 18

Workers typically require higher wages in order to work additional hours because of the

Accepted Answer

A) Increasing opportunity cost of labor. 
B) Increasing marginal utility of income. 
C) Decreasing value of leisure time forgone. 
A) Increasing opportunity cost of labor. 
B) Increasing marginal utility of income. 
C) Decreasing value of leisure time forgone.

Question 19

The marginal physical product of a factor is equal to the additional revenue generated from employing one additional unit of the factor.

Accepted Answer

A) True 
 B)False

Question 20

Cost efficiency refers to the

Accepted Answer

A) Amount of output associated with an additional dollar spent on input. 
B) Effectiveness of labor in reducing production costs. 
C) MPP of labor divided by the product price. 
A) Amount of output associated with an additional dollar spent on input. 
B) Effectiveness of labor in reducing production costs. 
C) MPP of labor divided by the product price.

Exam 30: The Labor Market

Assume the apple market is competitive.If citizens want wages and the number of available jobs for apple pickers to increase,the best strategy would be to

Suppose that Silvia's Dance Studio uses both labor and capital to teach dance lessons.Given her current mix of labor and capital,the cost efficiency of labor is 1 dance lesson per dollar,and the cost efficiency of capital is 5 dance lessons per dollar.Silvia should

In general,it can be said that leisure is a "free good."

A decreasing marginal utility of income contributes to the upward slope of an individual's supply curve.

The labor supply curve will be positively sloped if the substitution effect of wages is

If the income effect dominates the substitution effect,the labor supply curve will be backward-bending.

When the MPP of labor is zero,ceteris paribus,

If we move to the right along the upward-sloping labor supply curve,we observe that the cost of labor

The argument is sometimes made that the United States should not trade with low-wage countries.The reasoning is that more highly paid U.S.workers cannot compete,and U.S.jobs are lost.What is wrong with this argument?

If the MPP of an additional unit of labor is 3 units per hour,product price is constant at $8 per unit,and the wage rate is $26 per hour,then

If the MPP of an additional unit of labor is 4 units per hour,product price is constant at $5 per unit,and the wage rate is $19 per hour,then

If a chair can be sold for $20 and it takes a worker two hours to make a chair,the marginal revenue product of this worker is

The determinants of the market supply of labor include all of the following except

The opportunity wage is often a better measure of executive pay than

An effective minimum wage will increase the quantity demanded of labor.

If wages are relatively high,the individual labor supply curve may

Workers typically require higher wages in order to work additional hours because of the

The marginal physical product of a factor is equal to the additional revenue generated from employing one additional unit of the factor.

Cost efficiency refers to the

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

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