Question 1

Critics of the minimum wage contend that higher minimums cause employers to move up their labor demand curves, reducing employment of low-wage workers.

Accepted Answer

A) True 
 B)False

Question 2

Define minimum wage. What is the purpose of minimum wage?

Accepted Answer

Minimum wage is the lowest wage that emp

Question 3

The consumer price index is 125 in Year 1 and 132 in Year 2. The nominal wage rate is $15 in Year 1 and $17 in Year 2. What is the approximate percentage change in the real wage rate from Year 1 to Year 2?

Accepted Answer

A) 2.4 percent 
B) 13.3 percent 
C) 5.6 percent 
D) 7.7 percent 
A) 2.4 percent 
B) 13.3 percent 
C) 5.6 percent 
D) 7.7 percent

Question 4

The presence of an agency shop requires all workers to join the union within the first 30 days of employment.

Accepted Answer

A) True 
 B)False

Question 5

What are four market imperfections that prevent workers from moving from their current jobs to take higher-paying jobs?

Accepted Answer

The four market imperfections are: (1)la

Question 6

In 2018, approximately 5 percent of all work time lost was due to work stoppages.

Accepted Answer

A) True 
 B)False

Question 7

Minimum wage laws have contributed to higher unemployment levels among teenagers and minorities.

Accepted Answer

A) True 
 B)False

Question 8

What is the case against the minimum wage? What is the case for the minimum wage? What does the evidence indicate?

Accepted Answer

The case against the minimum wage is tha

Question 9

A monopsonistic employer may sell its product in a competitive market.

Accepted Answer

A) True 
 B)False

Question 10

Increases in the productivity of labor result partly from

Accepted Answer

A) the law of diminishing returns. 
B) improvements in technology. 
C) reductions in wage rates. 
D) increases in the quantity of labor. 
A) the law of diminishing returns. 
B) improvements in technology. 
C) reductions in wage rates. 
D) increases in the quantity of labor.

Question 11

Which of the following is a valid explanation for real wage growth?

Accepted Answer

A) the rising cost of capital accumulation 
B) a contraction of employment in manufacturing industries 
C) an increase in the quantity of labor 
D) a rising rate of labor productivity growth 
A) the rising cost of capital accumulation 
B) a contraction of employment in manufacturing industries 
C) an increase in the quantity of labor 
D) a rising rate of labor productivity growth

Question 12

The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.

Accepted Answer

A) True 
 B)False

Question 13

A firm's labor input, total output of labor, and product price schedules are given in the table. Labor is the only variable input. What is the marginal revenue product of the seventh worker?

Accepted Answer

A) $35 
B) $4 
C) $5 
D) $-7 
A) $35 
B) $4 
C) $5 
D) $-7

Question 14

Which of the following is an explanation for the high labor-productivity in the United States?

Accepted Answer

A) plentiful capital resources 
B) high total output in industries 
C) high price of labor 
D) plentiful labor resources 
A) plentiful capital resources 
B) high total output in industries 
C) high price of labor 
D) plentiful labor resources

Question 15

If the wage rate in a purely competitive labor market increases, it will cause the

Accepted Answer

A) marginal resource cost curve for a single competitive firm in the industry to shift down. 
B) marginal resource cost curve for a single competitive firm in the industry to shift up. 
C) labor supply curve for a single competitive firm to shift downward. 
D) labor supply curve for the industry to shift rightward. 
A) marginal resource cost curve for a single competitive firm in the industry to shift down. 
B) marginal resource cost curve for a single competitive firm in the industry to shift up. 
C) labor supply curve for a single competitive firm to shift downward. 
D) labor supply curve for the industry to shift rightward.

Question 16

The principal-agent problem in labor markets arises because of the possibility of shirking by workers.

Accepted Answer

A) True 
 B)False

Question 17

Suppose in some economy there are 100 million workers; 10 million of those workers work in retail trade, and 1 million of the retail workers belong to unions. Total union membership in this economy is 40 million. The rate of unionization in retail trade is

Accepted Answer

A) 1 percent. 
B) 10 percent. 
C) 40 percent. 
D) 100 percent. 
A) 1 percent. 
B) 10 percent. 
C) 40 percent. 
D) 100 percent.

Question 18

The basic explanation for high real wages in the United States and other industrially advanced economies is that the

Accepted Answer

A) labor supply has increased more rapidly than labor demand in these nations. 
B) labor demand has increased more rapidly than labor supply in these nations. 
C) unemployment in these nations has remained relatively stable over the years. 
D) inflation rate in these nations has been higher than the rate of increase in nominal wages. 
A) labor supply has increased more rapidly than labor demand in these nations. 
B) labor demand has increased more rapidly than labor supply in these nations. 
C) unemployment in these nations has remained relatively stable over the years. 
D) inflation rate in these nations has been higher than the rate of increase in nominal wages.

Question 19

In 2018, food workers had a much higher unionization rate than teachers, according to U.S. Bureau of Labor Statistics data.

Accepted Answer

A) True 
 B)False

Question 20

One clear effect of labor unions is an increase in the wage rates of their members.

Accepted Answer

A) True 
 B)False

Exam 17: Wage Determination

Critics of the minimum wage contend that higher minimums cause employers to move up their labor demand curves, reducing employment of low-wage workers.

Define minimum wage. What is the purpose of minimum wage?

The consumer price index is 125 in Year 1 and 132 in Year 2. The nominal wage rate is $15 in Year 1 and $17 in Year 2. What is the approximate percentage change in the real wage rate from Year 1 to Year 2?

The presence of an agency shop requires all workers to join the union within the first 30 days of employment.

What are four market imperfections that prevent workers from moving from their current jobs to take higher-paying jobs?

In 2018, approximately 5 percent of all work time lost was due to work stoppages.

Minimum wage laws have contributed to higher unemployment levels among teenagers and minorities.

What is the case against the minimum wage? What is the case for the minimum wage? What does the evidence indicate?

A monopsonistic employer may sell its product in a competitive market.

Increases in the productivity of labor result partly from

Which of the following is a valid explanation for real wage growth?

The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.

A firm's labor input, total output of labor, and product price schedules are given in the table. Labor is the only variable input. What is the marginal revenue product of the seventh worker?

Which of the following is an explanation for the high labor-productivity in the United States?

If the wage rate in a purely competitive labor market increases, it will cause the

The principal-agent problem in labor markets arises because of the possibility of shirking by workers.

Suppose in some economy there are 100 million workers; 10 million of those workers work in retail trade, and 1 million of the retail workers belong to unions. Total union membership in this economy is 40 million. The rate of unionization in retail trade is

The basic explanation for high real wages in the United States and other industrially advanced economies is that the

In 2018, food workers had a much higher unionization rate than teachers, according to U.S. Bureau of Labor Statistics data.

One clear effect of labor unions is an increase in the wage rates of their members.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, RD, and Efficiency

The Demand for Resources

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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