Question 1

Any economic model should be judged primarily on

Accepted Answer

A)  how realistic its assumptions are. 
B)  how accurately its predictions match observed behavior. 
C)  how easy the model is to use. 
D)  how many aspects of real-world behavior and choices are incorporated in the model. 
E)  how original the model is compared to other models. 
A)  how realistic its assumptions are. 
B)  how accurately its predictions match observed behavior. 
C)  how easy the model is to use. 
D)  how many aspects of real-world behavior and choices are incorporated in the model. 
E)  how original the model is compared to other models.

Question 2

Which of the following is not a leading actor in labor markets?

Accepted Answer

A)  consumers 
B)  firms 
C)  workers 
D)  government 
E)  unions 
A)  consumers 
B)  firms 
C)  workers 
D)  government 
E)  unions

Question 3

What is likely to happen to the labor market equilibrium for firemen as building codes change to require firewalls and sprinklers to be included in all new construction?

Accepted Answer

A)  The number of firemen employed will increase while firemen wages will decrease. 
B)  The number of firemen employed will decrease while firemen wages will decrease. 
C)  The number of firemen employed will increase while firemen wages will increase. 
D)  The number of firemen employed will decrease while firemen wages will increase. 
E)  The number of firemen employed will remain the same while firemen wages will increase. 
A)  The number of firemen employed will increase while firemen wages will decrease. 
B)  The number of firemen employed will decrease while firemen wages will decrease. 
C)  The number of firemen employed will increase while firemen wages will increase. 
D)  The number of firemen employed will decrease while firemen wages will increase. 
E)  The number of firemen employed will remain the same while firemen wages will increase.

Question 4

Which of the following is a positive rather than a normative question?

Accepted Answer

A)  What effect does increasing welfare assistance by 20% have on female labor supply? 
B)  Should the United States allow unlimited immigration? 
C)  Should the "Highly Qualified Teacher" provision of No Child Left Behind be eliminated? 
D)  Should there be a minimum wage? 
E)  Should trade unions be allowed to lobby Congress? 
A)  What effect does increasing welfare assistance by 20% have on female labor supply? 
B)  Should the United States allow unlimited immigration? 
C)  Should the "Highly Qualified Teacher" provision of No Child Left Behind be eliminated? 
D)  Should there be a minimum wage? 
E)  Should trade unions be allowed to lobby Congress?

Question 5

Suppose labor demand can be described as ED = 120,000 − 1.5w where w is yearly salary. How many more workers are demanded at a going wage of $60,000?

Accepted Answer

A)  20,000 
B)  30,000 
C)  40,000 
D)  50,000 
E)  60,000 
A)  20,000 
B)  30,000 
C)  40,000 
D)  50,000 
E)  60,000

Question 6

An outward shift in the labor demand curve implies that

Accepted Answer

A)  employers are now looking to hire more workers at any given wage. 
B)  employers are now looking to hire fewer workers if the wage decreases. 
C)  employers are now looking to hire fewer workers regardless of the wage. 
D)  demand for the firm's output likely fell. 
E)  a greater number of workers are now more willing to work at any given wage. 
A)  employers are now looking to hire more workers at any given wage. 
B)  employers are now looking to hire fewer workers if the wage decreases. 
C)  employers are now looking to hire fewer workers regardless of the wage. 
D)  demand for the firm's output likely fell. 
E)  a greater number of workers are now more willing to work at any given wage.

Question 7

Labor economists sometimes refer to labor demand as "derived" demand. In this context, where does "derived" come from?

Accepted Answer

A)  the firm's production function 
B)  the union's willingness to accept a lower wage 
C)  consumer demand for the firm's product 
D)  the firm's profit 
E)  the degree of competition in the firm's industry 
A)  the firm's production function 
B)  the union's willingness to accept a lower wage 
C)  consumer demand for the firm's product 
D)  the firm's profit 
E)  the degree of competition in the firm's industry

Question 8

The typical labor supply curve

Accepted Answer

A)  is u-shaped. 
B)  equals the marginal product of labor. 
C)  slopes up. 
D)  slopes down. 
E)  depends on the size of the firm. 
A)  is u-shaped. 
B)  equals the marginal product of labor. 
C)  slopes up. 
D)  slopes down. 
E)  depends on the size of the firm.

Question 9

The labor demand curve shows how many workers the firm is willing to hire

Accepted Answer

A)  at any particular time. 
B)  at a particular amount of labor supplied. 
C)  at any given wage. 
D)  into high-skill jobs. 
E)  when demand for the firm's output is low. 
A)  at any particular time. 
B)  at a particular amount of labor supplied. 
C)  at any given wage. 
D)  into high-skill jobs. 
E)  when demand for the firm's output is low.

Question 10

When plotting log wages (y-axis) against years of schooling (x-axis), the slope of the regression line indicates

Accepted Answer

A)  the average wage. 
B)  the average logged wage. 
C)  the average years of schooling. 
D)  the economic return to each additional year of schooling measured in dollars. 
E)  the economic return to each additional year of schooling measured in percentage terms. 
A)  the average wage. 
B)  the average logged wage. 
C)  the average years of schooling. 
D)  the economic return to each additional year of schooling measured in dollars. 
E)  the economic return to each additional year of schooling measured in percentage terms.

Any economic model should be judged primarily on

Which of the following is not a leading actor in labor markets?

What is likely to happen to the labor market equilibrium for firemen as building codes change to require firewalls and sprinklers to be included in all new construction?

Which of the following is a positive rather than a normative question?

Suppose labor demand can be described as E_D = 120,000 − 1.5w where w is yearly salary. How many more workers are demanded at a going wage of $60,000?

An outward shift in the labor demand curve implies that

Labor economists sometimes refer to labor demand as "derived" demand. In this context, where does "derived" come from?

The typical labor supply curve

The labor demand curve shows how many workers the firm is willing to hire

When plotting log wages (y-axis) against years of schooling (x-axis), the slope of the regression line indicates

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

Human Capital

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Unemployment

Filters

Exam 1: Introduction to Labor Economics

Any economic model should be judged primarily on

Which of the following is not a leading actor in labor markets?

What is likely to happen to the labor market equilibrium for firemen as building codes change to require firewalls and sprinklers to be included in all new construction?

Which of the following is a positive rather than a normative question?

Suppose labor demand can be described as ED = 120,000 − 1.5w where w is yearly salary. How many more workers are demanded at a going wage of $60,000?

An outward shift in the labor demand curve implies that

Labor economists sometimes refer to labor demand as "derived" demand. In this context, where does "derived" come from?

The typical labor supply curve

The labor demand curve shows how many workers the firm is willing to hire

When plotting log wages (y-axis) against years of schooling (x-axis), the slope of the regression line indicates

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

Human Capital

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Unemployment

Filters

Suppose labor demand can be described as E_D = 120,000 − 1.5w where w is yearly salary. How many more workers are demanded at a going wage of $60,000?