Question 1

Refer to the graph shown.   If labor supply shifts from S1 to S2, the firm will:

Accepted Answer

A)  reduce employment from q0 to q1 to maximize profit where MRP = W. 
B)  reduce employment from q1 to q2 to maximize profit where MRP = W. 
C)  raise employment from q1 to q0 to maximize profit where MRP = W. 
D)  raise employment from q2 to q1 to maximize profit where MRP = W. 
A)  reduce employment from q0 to q1 to maximize profit where MRP = W. 
B)  reduce employment from q1 to q2 to maximize profit where MRP = W. 
C)  raise employment from q1 to q0 to maximize profit where MRP = W. 
D)  raise employment from q2 to q1 to maximize profit where MRP = W.

Question 2

Institutional discrimination exists when employers refuse to hire certain workers based on factors not related to job performance.

Accepted Answer

A) True 
 B)False

Question 3

When the National Hockey League locked out the hockey players in an effort to negotiate a salary cap with the players' union, it was an example of conflict:

Accepted Answer

A)  within a bilateral monopoly. 
B)  within monopolistic competition. 
C)  between monopsony on the employers' side and competition on the union's side. 
D)  between unions and hockey fans. 
A)  within a bilateral monopoly. 
B)  within monopolistic competition. 
C)  between monopsony on the employers' side and competition on the union's side. 
D)  between unions and hockey fans.

Question 4

A firm's demand curve for labor services:

Accepted Answer

A)  is independent of the demand for the firm's output. 
B)  will not change if technology changes. 
C)  depends on the amount of other inputs used by the firm. 
D)  is not related to the price of the firm's output. 
A)  is independent of the demand for the firm's output. 
B)  will not change if technology changes. 
C)  depends on the amount of other inputs used by the firm. 
D)  is not related to the price of the firm's output.

Question 5

A monopsonist will pay a wage that:

Accepted Answer

A)  is greater than that in a perfectly competitive labor market. 
B)  is the same as that in a perfectly competitive labor market. 
C)  is less than that in a perfectly competitive labor market. 
D)  may be greater than, less than, or equal to that in a perfectly competitive labor market, depending on labor supply. 
A)  is greater than that in a perfectly competitive labor market. 
B)  is the same as that in a perfectly competitive labor market. 
C)  is less than that in a perfectly competitive labor market. 
D)  may be greater than, less than, or equal to that in a perfectly competitive labor market, depending on labor supply.

Question 6

The incentive effect refers to how much a person will change his or her:

Accepted Answer

A)  hours worked in response to a change in the wage rate. 
B)  wage rate in response to a change in productivity. 
C)  quantity demanded of a taxed good in response to a change in the tax rate. 
D)  wage rate in response to a change in the tax rate on earnings. 
A)  hours worked in response to a change in the wage rate. 
B)  wage rate in response to a change in productivity. 
C)  quantity demanded of a taxed good in response to a change in the tax rate. 
D)  wage rate in response to a change in the tax rate on earnings.

Question 7

A market in which there is only a single seller and a single buyer is a:

Accepted Answer

A)  monopoly. 
B)  monopsony. 
C)  bilateral monopoly. 
D)  perfectly competitive market. 
A)  monopoly. 
B)  monopsony. 
C)  bilateral monopoly. 
D)  perfectly competitive market.

Question 8

Refer to the graph shown.   Which curve represents the firm's derived demand for labor curve?

Accepted Answer

A)  D 
B)  S1 
C)  S2 
D)  MRP 
A)  D 
B)  S1 
C)  S2 
D)  MRP

Question 9

Suppose a firm is contractually obligated to pay workers $25 per hour despite the fact that the market-clearing wage is $19 per hour. If there are 500 qualified applicants but only 350 job openings, it is likely that:

Accepted Answer

A)  the firm will hire 350 workers at $25 per hour and 150 workers at $19 per hour. 
B)  the firm will go bankrupt. 
C)  jobs will have to be rationed in some way, and the firm may use non-job-related qualities to do so. 
D)  the market eventually will clear at a wage rate between $19 and $25. 
A)  the firm will hire 350 workers at $25 per hour and 150 workers at $19 per hour. 
B)  the firm will go bankrupt. 
C)  jobs will have to be rationed in some way, and the firm may use non-job-related qualities to do so. 
D)  the market eventually will clear at a wage rate between $19 and $25.

Question 10

A higher marginal income tax rate reduces incentives to work because:

Accepted Answer

A)  leisure and other non-market activities aren't taxed, and so their relative price goes down. 
B)  leisure and other non-market activities aren't taxed, and so their relative price goes up. 
C)  the opportunity cost of leisure remains constant while after-tax wages fall. 
D)  the opportunity cost of leisure increases with the marginal income tax rate. 
A)  leisure and other non-market activities aren't taxed, and so their relative price goes down. 
B)  leisure and other non-market activities aren't taxed, and so their relative price goes up. 
C)  the opportunity cost of leisure remains constant while after-tax wages fall. 
D)  the opportunity cost of leisure increases with the marginal income tax rate.

Question 11

Comparable worth laws:

Accepted Answer

A)  always distort market outcomes because they interfere with the price mechanism. 
B)  may correct institutional biases in the labor market. 
C)  are necessary even when wages are completely determined by the interaction of labor supply and labor demand. 
D)  are necessary even when institutional biases do not exist. 
A)  always distort market outcomes because they interfere with the price mechanism. 
B)  may correct institutional biases in the labor market. 
C)  are necessary even when wages are completely determined by the interaction of labor supply and labor demand. 
D)  are necessary even when institutional biases do not exist.

Question 12

An increase in the wages of truck drivers might be explained by which of the following factors?

Accepted Answer

A)  A reduction in the price of rail transportation 
B)  An increase in competition within the trucking industry 
C)  A reduction in the demand for transportation 
D)  An increase in the price of gasoline 
A)  A reduction in the price of rail transportation 
B)  An increase in competition within the trucking industry 
C)  A reduction in the demand for transportation 
D)  An increase in the price of gasoline

Question 13

A reduction in the supply of labor will cause wages to:

Accepted Answer

A)  decrease and employment to decrease. 
B)  increase and employment to decrease. 
C)  increase and employment to increase. 
D)  decrease and employment to increase. 
A)  decrease and employment to decrease. 
B)  increase and employment to decrease. 
C)  increase and employment to increase. 
D)  decrease and employment to increase.

Question 14

If the government simultaneously increases marginal income tax rates and unemployment compensation, the:

Accepted Answer

A)  incentive to work will increase. 
B)  incentive to work will diminish. 
C)  incentive to work will not change. 
D)  effect on the incentive to work cannot be predicted. 
A)  incentive to work will increase. 
B)  incentive to work will diminish. 
C)  incentive to work will not change. 
D)  effect on the incentive to work cannot be predicted.

Question 15

Researchers have found that family income of obese women is about 17 percent lower than that of women who are of the recommended weight. If researchers were able to demonstrate that there is no difference in the productivity of women who are obese and women who are of the recommended weight, this would suggest that the difference in income:

Accepted Answer

A)  is the result of discrimination. 
B)  cannot be explained by discrimination. 
C)  is due to differences in worker productivity. 
D)  is a mistake in the survey. 
A)  is the result of discrimination. 
B)  cannot be explained by discrimination. 
C)  is due to differences in worker productivity. 
D)  is a mistake in the survey.

Question 16

Suppose both wages and employment decrease. These changes most likely were caused by:

Accepted Answer

A)  a decline in immigration. 
B)  an increase in emigration. 
C)  an increase in the working age population. 
D)  a decline in business activity in the economy. 
A)  a decline in immigration. 
B)  an increase in emigration. 
C)  an increase in the working age population. 
D)  a decline in business activity in the economy.

Question 17

The effect of a change in the wage rate on the number of hours people are willing and able to work is stronger when the:

Accepted Answer

A)  demand for labor is elastic. 
B)  demand for labor is inelastic. 
C)  supply of labor is elastic. 
D)  supply of labor is inelastic. 
A)  demand for labor is elastic. 
B)  demand for labor is inelastic. 
C)  supply of labor is elastic. 
D)  supply of labor is inelastic.

Question 18

Comparable worth laws can be justified by the fact that wages are determined exclusively by market forces.

Accepted Answer

A) True 
 B)False

Question 19

Comparable worth laws are laws that mandate comparable pay for:

Accepted Answer

A)  people with comparable abilities. 
B)  comparable work. 
C)  everyone. 
D)  people with comparable levels of seniority. 
A)  people with comparable abilities. 
B)  comparable work. 
C)  everyone. 
D)  people with comparable levels of seniority.

Question 20

Refer to the table shown. $$\begin{array}{l}
\begin{array} { | c | c | } 
\hline\text { Number wf Warkers } & \text { Tatal Praduct per Hour }\
\hline 1 & 24 \
\hline 2 & 44 \
\hline 3 & 60 \
\hline 4 & 74 \
\hline 5 & 84 \
\hline 6 & 90 \
\hline 7 & 92 \
\hline
\end{array}
\end{array}$$ If the price per unit of product is $2 and the wage rate is $25, a profit-maximizing firm operating in competitive markets would hire:

Accepted Answer

A)  three workers. 
B)  four workers. 
C)  five workers. 
D)  six workers. 
A)  three workers. 
B)  four workers. 
C)  five workers. 
D)  six workers.

Exam 17: Work and the Labor Market

Refer to the graph shown. If labor supply shifts from S1 to S2, the firm will:

Institutional discrimination exists when employers refuse to hire certain workers based on factors not related to job performance.

When the National Hockey League locked out the hockey players in an effort to negotiate a salary cap with the players' union, it was an example of conflict:

A firm's demand curve for labor services:

A monopsonist will pay a wage that:

The incentive effect refers to how much a person will change his or her:

A market in which there is only a single seller and a single buyer is a:

Refer to the graph shown. Which curve represents the firm's derived demand for labor curve?

Suppose a firm is contractually obligated to pay workers $25 per hour despite the fact that the market-clearing wage is $19 per hour. If there are 500 qualified applicants but only 350 job openings, it is likely that:

A higher marginal income tax rate reduces incentives to work because:

Comparable worth laws:

An increase in the wages of truck drivers might be explained by which of the following factors?

A reduction in the supply of labor will cause wages to:

If the government simultaneously increases marginal income tax rates and unemployment compensation, the:

Suppose both wages and employment decrease. These changes most likely were caused by:

The effect of a change in the wage rate on the number of hours people are willing and able to work is stronger when the:

Comparable worth laws can be justified by the fact that wages are determined exclusively by market forces.

Comparable worth laws are laws that mandate comparable pay for:

Refer to the table shown. Number wf Warkers Tatal Praduct per Hour 1 24 2 44 3 60 4 74 5 84 6 90 7 92 If the price per unit of product is $2 and the wage rate is $25, a profit-maximizing firm operating in competitive markets would hire:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Filters

Refer to the graph shown. If labor supply shifts from S₁ to S₂, the firm will: