Question 1

If workers receive economic rents, then:

Accepted Answer

A)  If wages were to be increased, the employment level would rise. 
B)  The product market could be perfectly competitive. 
C)  They are receiving wages which are below the competitive level. 
D)  If wages were to be reduced, the firm would no longer be able to recruit labour. 
E)  They are receiving wages which are higher than the competitive level. 
A)  If wages were to be increased, the employment level would rise. 
B)  The product market could be perfectly competitive. 
C)  They are receiving wages which are below the competitive level. 
D)  If wages were to be reduced, the firm would no longer be able to recruit labour. 
E)  They are receiving wages which are higher than the competitive level.

Question 2

The empirical literature on monopsony has found:

Accepted Answer

A)  Where it exists, monopsony power seems to endure over the long run. 
B)  Although one might expect to see monopsony power in markets for nurses and teachers, studies have failed to find this effect. 
C)  There is evidence of monopsony power in certain labour markets. 
D)  It appears as though many labour markets are affected by monopsony power. 
E)  All of the answer choices are correct. 
A)  Where it exists, monopsony power seems to endure over the long run. 
B)  Although one might expect to see monopsony power in markets for nurses and teachers, studies have failed to find this effect. 
C)  There is evidence of monopsony power in certain labour markets. 
D)  It appears as though many labour markets are affected by monopsony power. 
E)  All of the answer choices are correct.

Question 3

Consider Figure 7.6 in the textbook. The equilibrium wage and employment levels for the monopsonist are:

Accepted Answer

A)  WC and NM. 
B)  WM and NC. 
C)  WC and NC. 
D)  WM and NM. 
E)  VMPW and NM. 
A)  WC and NM. 
B)  WM and NC. 
C)  WC and NC. 
D)  WM and NM. 
E)  VMPW and NM.

Question 4

Consider Figure 7.6 in the textbook. The equilibrium wage and employment levels for the firm in a perfectly competitive labour market are:

Accepted Answer

A)  WM and NC. 
B)  VMPW and NM. 
C)  WM and NM. 
D)  WC and NC. 
E)  WC and NM. 
A)  WM and NC. 
B)  VMPW and NM. 
C)  WM and NM. 
D)  WC and NC. 
E)  WC and NM.

Question 5

What has empirical research on the incidence of the payroll tax found?

Accepted Answer

A)  That payroll taxes are "job killers" 
B)  That the burden is shared almost equally between firms and workers 
C)  That most of the burden falls upon firms 
D)  That most of the burden falls upon workers 
E)  That there is no burden at all because the tax is free 
A)  That payroll taxes are "job killers" 
B)  That the burden is shared almost equally between firms and workers 
C)  That most of the burden falls upon firms 
D)  That most of the burden falls upon workers 
E)  That there is no burden at all because the tax is free

Question 6

Which of the following statements is false?

Accepted Answer

A)  The monopsonist has no demand curve for labour. 
B)  The monopsonist is a wage taker. 
C)  The monopsonist may be able to carry out wage discrimination. 
D)  The monopsonist has market power in the labour market. 
E)  The monopsonist is a profit-maximizing firm. 
A)  The monopsonist has no demand curve for labour. 
B)  The monopsonist is a wage taker. 
C)  The monopsonist may be able to carry out wage discrimination. 
D)  The monopsonist has market power in the labour market. 
E)  The monopsonist is a profit-maximizing firm.

Question 7

In 2007, the government of Ontario raised the minimum wage substantially and justified it as a policy designed to help the poor. What was the evidence found in this regard?

Accepted Answer

A)  It does not help the poor because there is not a lot of overlap between the poor and minimum-wage workers. 
B)  It does help the poor because the employment effect is strong. 
C)  It does help the poor because most of the poor are working at low-paid jobs. 
D)  It does help the poor because many of them work long hours, and thus will benefit from a higher wage. 
E)  The existing research is inconclusive on this issue. 
A)  It does not help the poor because there is not a lot of overlap between the poor and minimum-wage workers. 
B)  It does help the poor because the employment effect is strong. 
C)  It does help the poor because most of the poor are working at low-paid jobs. 
D)  It does help the poor because many of them work long hours, and thus will benefit from a higher wage. 
E)  The existing research is inconclusive on this issue.

Question 8

Which of the following statements is false?

Accepted Answer

A)  Monopsony firms will hire more workers if a minimum wage is imposed below the monopsony wage. 
B)  Monopsony firms will behave as if they are competitive if a wage is imposed at the level of the competitive wage. 
C)  Monopsony firms can earn a higher profit than firms operating in competitive labour markets. 
D)  Monopsony firms have a wage lower than the marginal labour cost because they face upward- sloping labour supply curves. 
E)  Monopsony firms have a wage greater than the marginal labour cost because they face upward- sloping labour supply curves. 
A)  Monopsony firms will hire more workers if a minimum wage is imposed below the monopsony wage. 
B)  Monopsony firms will behave as if they are competitive if a wage is imposed at the level of the competitive wage. 
C)  Monopsony firms can earn a higher profit than firms operating in competitive labour markets. 
D)  Monopsony firms have a wage lower than the marginal labour cost because they face upward- sloping labour supply curves. 
E)  Monopsony firms have a wage greater than the marginal labour cost because they face upward- sloping labour supply curves.

Question 9

Which of the following statements regarding monopsony is false?

Accepted Answer

A)  The marginal cost of labour is lower than the average cost of labour in the case of monopsony. 
B)  The equilibrium wage and the equilibrium employment levels are lower than what they would be if the labour market were perfectly competitive. 
C)  All workers except the marginal worker are paid more than their reservation wage. 
D)  The total wage bill is lower in the case of monopsony. 
E)  If a competitive labour market were to become a monopsony, economic rent would be transferred from the workers directly to the employer. 
A)  The marginal cost of labour is lower than the average cost of labour in the case of monopsony. 
B)  The equilibrium wage and the equilibrium employment levels are lower than what they would be if the labour market were perfectly competitive. 
C)  All workers except the marginal worker are paid more than their reservation wage. 
D)  The total wage bill is lower in the case of monopsony. 
E)  If a competitive labour market were to become a monopsony, economic rent would be transferred from the workers directly to the employer.

Question 10

Which of the following statements is true? The burden of a payroll tax is paid:

Accepted Answer

A)  by workers if the demand for labour is perfectly inelastic. 
B)  by firms if they are legally responsible for remitting the tax to the government. 
C)  by both workers and firms if the elasticities of demand and supply of labour are between zero and infinity. 
D)  by workers if the supply of labour is perfectly elastic. 
E)  indeterminate. 
A)  by workers if the demand for labour is perfectly inelastic. 
B)  by firms if they are legally responsible for remitting the tax to the government. 
C)  by both workers and firms if the elasticities of demand and supply of labour are between zero and infinity. 
D)  by workers if the supply of labour is perfectly elastic. 
E)  indeterminate.

Question 11

If the government sets a minimum wage for workers that is above the competitive wage,

Accepted Answer

A)  Unemployment would decrease through a disemployment effect. 
B)  Wages would fall as firms try to reduce labour costs. 
C)  The total wage bill must fall. 
D)  Unemployment would increase through a disemployment effect. 
E)  The total wage bill must rise. 
A)  Unemployment would decrease through a disemployment effect. 
B)  Wages would fall as firms try to reduce labour costs. 
C)  The total wage bill must fall. 
D)  Unemployment would increase through a disemployment effect. 
E)  The total wage bill must rise.

Question 12

American adults of working age work on average 35-40 % more hours per week than their counterparts in France and Germany. All of the following have been mentioned by researchers as possible explanations, except:

Accepted Answer

A)  A greater inherent laziness among the French and the Germans. 
B)  Social interactions associated with the labour/leisure tradeoff. 
C)  Higher payroll and incomes taxes applied to both workers and firms. 
D)  Labour supply curve may be more elastic in France and Germany than in America. 
E)  Extensive regulations regarding working and employment practices. 
A)  A greater inherent laziness among the French and the Germans. 
B)  Social interactions associated with the labour/leisure tradeoff. 
C)  Higher payroll and incomes taxes applied to both workers and firms. 
D)  Labour supply curve may be more elastic in France and Germany than in America. 
E)  Extensive regulations regarding working and employment practices.

Question 13

What is the primary difference between a monopsonist and a firm which operates in a perfectly competitive labour market?

Accepted Answer

A)  The monopsonist is likely to be more profitable. 
B)  In order to recruit another worker, the monopsonist incurs a smaller increase in labour costs. 
C)  In order to recruit another worker, the monopsonist incurs a larger increase in labour costs. 
D)  The labour supply curve is irrelevant for the monopsonist. 
E)  The monopsonist hires such that the marginal revenue product of labour is equal to the marginal labour cost, but the non-monopsonist does not. 
A)  The monopsonist is likely to be more profitable. 
B)  In order to recruit another worker, the monopsonist incurs a smaller increase in labour costs. 
C)  In order to recruit another worker, the monopsonist incurs a larger increase in labour costs. 
D)  The labour supply curve is irrelevant for the monopsonist. 
E)  The monopsonist hires such that the marginal revenue product of labour is equal to the marginal labour cost, but the non-monopsonist does not.

Question 14

Which of the following statements regarding monopsony is false?

Accepted Answer

A)  A perfectly discriminating monopsonist will hire the same number of workers as a firm which is a perfect competitor in the labour market. 
B)  A monopsonist can lower the wages that it pays without losing its entire labour force. 
C)  A perfectly discriminating monopsonist pays all of its workers less than the wage that would prevail in a perfectly competitive labour market. 
D)  The monopsonist earns a profit because it earns economic rents for all the hired workers. 
E)  A firm operating in a perfectly competitive labour market cannot lower the wage that it pays without losing some of its workforce. 
A)  A perfectly discriminating monopsonist will hire the same number of workers as a firm which is a perfect competitor in the labour market. 
B)  A monopsonist can lower the wages that it pays without losing its entire labour force. 
C)  A perfectly discriminating monopsonist pays all of its workers less than the wage that would prevail in a perfectly competitive labour market. 
D)  The monopsonist earns a profit because it earns economic rents for all the hired workers. 
E)  A firm operating in a perfectly competitive labour market cannot lower the wage that it pays without losing some of its workforce.

Question 15

Which of the following is a normative statement about minimum wages?

Accepted Answer

A)  "A minimum wage is a just another name for a living wage." 
B)  "A minimum wage has adverse consequences for inflation." 
C)  "A minimum wage causes some unemployment in the labour market." 
D)  All of the choices 
E)  None of the choices 
A)  "A minimum wage is a just another name for a living wage." 
B)  "A minimum wage has adverse consequences for inflation." 
C)  "A minimum wage causes some unemployment in the labour market." 
D)  All of the choices 
E)  None of the choices

If workers receive economic rents, then:

The empirical literature on monopsony has found:

Consider Figure 7.6 in the textbook. The equilibrium wage and employment levels for the monopsonist are:

Consider Figure 7.6 in the textbook. The equilibrium wage and employment levels for the firm in a perfectly competitive labour market are:

What has empirical research on the incidence of the payroll tax found?

Which of the following statements is false?

In 2007, the government of Ontario raised the minimum wage substantially and justified it as a policy designed to help the poor. What was the evidence found in this regard?

Which of the following statements is false?

Which of the following statements regarding monopsony is false?

Which of the following statements is true? The burden of a payroll tax is paid:

If the government sets a minimum wage for workers that is above the competitive wage,

American adults of working age work on average 35-40 % more hours per week than their counterparts in France and Germany. All of the following have been mentioned by researchers as possible explanations, except:

What is the primary difference between a monopsonist and a firm which operates in a perfectly competitive labour market?

Which of the following statements regarding monopsony is false?

Which of the following is a normative statement about minimum wages?

Labour Supply: Individual Attachment to the Labour Market

Labour Supply and Public Policy: Work Incentive Effects of Alternative Income Maintenance Schemes

Labour Supply Over the Life Cycle

Demand for Labour in Competitive Labour Markets

Labour Demand, Non-Wage Benefits, and Quasi-Fixed Costs

Compensating Wage Differentials

Human Capital Theory: Applications to Education and Training

Wage Structures Across Markets

The Economics of Immigration

Discrimination and Male-Female Earnings Differentials

Optimal Compensation Systems, Deferred Compensation, and Mandatory Retirement

Unions and Collective Bargaining

Union Impact on Wage and Non-Wage Outcomes

Unemployment: Meaning, Measurement, and Canadas Experience

Unemployment: Causes and Consequences

Filters

Exam 7: Wages and Employment in a Single Labour Market

If workers receive economic rents, then:

The empirical literature on monopsony has found:

Consider Figure 7.6 in the textbook. The equilibrium wage and employment levels for the monopsonist are:

Consider Figure 7.6 in the textbook. The equilibrium wage and employment levels for the firm in a perfectly competitive labour market are:

What has empirical research on the incidence of the payroll tax found?

Which of the following statements is false?

In 2007, the government of Ontario raised the minimum wage substantially and justified it as a policy designed to help the poor. What was the evidence found in this regard?

Which of the following statements is false?

Which of the following statements regarding monopsony is false?

Which of the following statements is true? The burden of a payroll tax is paid:

If the government sets a minimum wage for workers that is above the competitive wage,

American adults of working age work on average 35-40 % more hours per week than their counterparts in France and Germany. All of the following have been mentioned by researchers as possible explanations, except:

What is the primary difference between a monopsonist and a firm which operates in a perfectly competitive labour market?

Which of the following statements regarding monopsony is false?

Which of the following is a normative statement about minimum wages?

Labour Supply: Individual Attachment to the Labour Market

Labour Supply and Public Policy: Work Incentive Effects of Alternative Income Maintenance Schemes

Labour Supply Over the Life Cycle

Demand for Labour in Competitive Labour Markets

Labour Demand, Non-Wage Benefits, and Quasi-Fixed Costs

Compensating Wage Differentials

Human Capital Theory: Applications to Education and Training

Wage Structures Across Markets

The Economics of Immigration

Discrimination and Male-Female Earnings Differentials

Optimal Compensation Systems, Deferred Compensation, and Mandatory Retirement

Unions and Collective Bargaining

Union Impact on Wage and Non-Wage Outcomes

Unemployment: Meaning, Measurement, and Canadas Experience

Unemployment: Causes and Consequences

Filters