Exam 19: Factor Markets and the Distribution of Income

The fact that members of labor unions often have higher wages than workers who are not members of a union is proof that the marginal productivity theory of income distribution is not valid.

Above-equilibrium wages paid by some employers as an incentive for better performance are called efficiency wages.

At Hamill Manufacturing of Pennsylvania highly skilled senior machinists are paid $70,000, excluding benefits, but the average skilled machinist generates approximately $137,000 in value added. This difference is due to the fact that:

The opportunity cost of an hour of leisure:

In the labor market, households supply labor and firms demand labor.

A profit-maximizing firm will hire workers up to the quantity of labor where:

Above-equilibrium wages paid by some employers as an incentive for better performance are called:

Which of the following is NOT true about the factor distribution of income?

Use the following to answer questions: Figure: Rita's Time Allocation Budget Line -(Figure: Rita's Time Allocation Budget Line) Look at the figure Rita's Time Allocation Budget Line. It is based on 80 hours available for labor and leisure. Rita chooses 40 hours of leisure and income of $280. When her hourly wage doubles, Rita chooses 50 hours of leisure and income of $420. The substitution effect is making her work _____, the income effect is making her work _____, and the substitution effect is _____ than the income effect.

Javon has 80 hours per week to allocate between labor and leisure. Graph hours of leisure per week on the horizontal axis and income per week on the vertical axis. If Javon's hourly wage is $8, then the opportunity cost of an hour of leisure is:

Scott's wage is $25 per hour and he works 50 hours a week, which is his optimal labor supply. His marginal utility of one hour of leisure is equal to:

Which of the following is most likely an example of wage disparity due to differences in human capital?

Firms that engage in discrimination are usually more profitable than firms that don't discriminate.

Although horses were once a very important factor of production, the development of automobiles and other machinery reduced the demand for their use. This is an example of:

Maria operates a persimmon orchard in southeastern Oklahoma. She pays her workers $248 per week to pick and process persimmons, and she sells her persimmons for $6 per bushel. If she adds one more worker and that worker can pick and process 44 bushels per week, what will be the profit for Maria from hiring that worker?

A backward-bending labor supply curve is possible only if leisure is an inferior good.

Women, regardless of ethnicity, earn:

Use the following to answer questions: -(Table: Employment and Output) In the table Employment and Output, if the price of a bushel of wheat is $10, then the value of the marginal product of the third worker is:

Consider the time allocation budget line for Priya. Put hours of leisure on the horizontal axis and income on the vertical axis. If Priya can allocate 100 hours per week to either leisure or work and her wage per hour is $18, then the vertical intercept is _____ and the slope of the time allocation budget line is _____.

Use the following to answer questions: Figure: The Demand for Bricklayers -(Figure: The Demand for Bricklayers) Look at the figure The Demand for Bricklayers. The equilibrium market wage for bricklayers is $100. For a profit-maximizing firm at the equilibrium level of output, the VMPL_bricklayers: