Exam 17: Work and the Labor Market

Consider the following labor supply and demand diagram: For each of the following situations,explain (and illustrate)what would happen to the market for labor. (a)The firms who are employing these workers experience a big increase in the demand for their products. (b)Intel develops a new computer chip that is capable of doing the same work as two employees.Assume that workers and computers are substitutes in Intel's production function. (c)A newly elected U.S.president issues an executive order,restricting all immigration into the U.S.

The fact that some people are willing to take a pay cut to be able to work from home suggests that:

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:

Researchers have found that the income of obese women is about 17 percent lower than that of women who are of the recommended weight. This result implies that:

Using a supply and demand diagram,demonstrate graphically and explain verbally the following statement: "Existing workers prefer inelastic labor supplies but employers prefer elastic labor supplies."

Mangy Mutt Modifiers (3M)grooms dogs.3M has a fixed capital stock,and uses only one variable input,labor.Additionally,3M sells its output and buys its labor under competitive market conditions.Using the information provided,answer the questions that follow. Units of Total Dogs Marginal Physical Marginal Revenue 1 0 1 15 15 22.50 2 43 28 42.00 3 75 32 48.00 4 105 30 45.00 5 130 25 37.50 6 150 20 30.00 7 164 14 21.00 8 174 10 15.00 9 182 8 12.00 10 188 6 9.00 11 192 4 6.00 (a)If the competitive wage rate is $15.00 per unit of labor,how many units of labor will 3M hire? Briefly explain your answer. (b)Calculate 3M's gross profit at that combination of wages and labor.Assume that there are zero capital costs,so gross profits equal total revenue less labor costs.Show your calculation.

Which of the following is most likely to reduce the supply of labor?

The Chicago City Council considered a "living wage" ordinance that would raise the minimum wage in Chicago to about $10 an hour. How did most economists probably view this legislation?

According to the textbook author, who is most likely to do well as a result of the information revolution?

The development of complex algorithms that perform "brain work" in the future is likely to:

A bilateral monopoly is a market in which there are:

Suppose the government reduces marginal income tax rates and increases welfare payments. This policy combination will:

A market in which a single firm hires labor, but workers compete against one another for jobs, is a bilateral monopoly.

You have been asked to evaluate the pay of English Professors and Economics Professors at a small liberal arts college.The college's personnel department has generated some supply and demand information from similar colleges,which is presented in the diagrams below. (a)Illustrate a market-based pay scale for each type of professor. (b)Illustrate a pay scale based upon the principle that "a faculty member is a faculty member: they are all teachers,the only difference is the subject that they teach.They should receive equal pay for equal work." (c)Describe what difficulty the college might have in its recruiting process if it follows the pay system in (b)rather than that in (a).

Which of the following is not a type of labor law in the United States?

An increase in the marginal income tax rate will increase the quantity of labor supplied.

Refer to the graph shown. If product demand increases from D₁ to D₂, the equilibrium price of the product will:

The derived demand curve for labor shows the:

A reduction in the demand for labor will cause wages to:

The marginal income tax rate is: