Question 1

African Americans have higher unionization rates than whites.

Accepted Answer

A) True 
 B)False

Question 2

In recent years, total compensation to workers has risen faster than the take-home pay of average workers. This implies that

Accepted Answer

A) something is wrong with the statistics on either compensation or take-home pay. 
B) fringe benefits have become a larger share of total worker compensation. 
C) direct payments have become a larger share of total worker compensation. 
D) workers' pay has been declining slightly in recent years. 
A) something is wrong with the statistics on either compensation or take-home pay. 
B) fringe benefits have become a larger share of total worker compensation. 
C) direct payments have become a larger share of total worker compensation. 
D) workers' pay has been declining slightly in recent years.

Question 3

A profit-maximizing firm operates in purely competitive product and resource markets, with the resource and production schedules shown in the table.   The product price is $15 per unit and the cost per worker is $540. How many workers will the firm employ?

Accepted Answer

A) 5 
B) 6 
C) 8 
D) 7 
A) 5 
B) 6 
C) 8 
D) 7

Question 4

Human capital investment refers to spending on education and worker training.

Accepted Answer

A) True 
 B)False

Question 5

Do unions have a positive or negative effect on economic efficiency?

Accepted Answer

Union wages are about 15 percent higher

Question 6

The table shows labor demand data on the left and labor supply data on the right. We can conclude that

Accepted Answer

A) the product market is imperfectly competitive and the labor market is monopsonistic. 
B) the labor market is monopsonistic, but the product market is purely competitive. 
C) both the labor and product markets are purely competitive. 
D) the labor market is purely competitive, but the product market is monopsonistic. 
A) the product market is imperfectly competitive and the labor market is monopsonistic. 
B) the labor market is monopsonistic, but the product market is purely competitive. 
C) both the labor and product markets are purely competitive. 
D) the labor market is purely competitive, but the product market is monopsonistic.

Question 7

Right-to-work laws prohibit the formation of labor unions.

Accepted Answer

A) True 
 B)False

Question 8

In a purely competitive labor market, an individual firm must pay a rising price for labor if it wants to acquire more labor.

Accepted Answer

A) True 
 B)False

Question 9

List and explain the factors that lead to a high level of productivity in the United States.

Accepted Answer

Plentiful capital-workers in the United

Question 10

What is the difference between nominal wages and real wages?

Accepted Answer

The nominal wage is the amount of money

Question 11

Refer to the given data. The marginal revenue product of the second worker is

Accepted Answer

A) $9. 
B) $24. 
C) $12. 
D) $8. 
A) $9. 
B) $24. 
C) $12. 
D) $8.

Question 12

Refer to the given data. In maximizing its profit, this firm will employ

Accepted Answer

A) 1 unit of labor. 
B) 2 units of labor. 
C) 3 units of labor. 
D) 4 units of labor. 
A) 1 unit of labor. 
B) 2 units of labor. 
C) 3 units of labor. 
D) 4 units of labor.

Question 13

The concept of "wages" includes the following items, except

Accepted Answer

A) direct money payments like salaries and commissions. 
B) bonuses and royalties. 
C) amounts spent by workers. 
D) fringe benefits like health insurance and paid leave. 
A) direct money payments like salaries and commissions. 
B) bonuses and royalties. 
C) amounts spent by workers. 
D) fringe benefits like health insurance and paid leave.

Question 14

The real wage will rise if the nominal wage

Accepted Answer

A) falls more rapidly than the general price level. 
B) increases at the same rate as labor productivity. 
C) increases more rapidly than the general price level. 
D) falls at the same rate as the general price level. 
A) falls more rapidly than the general price level. 
B) increases at the same rate as labor productivity. 
C) increases more rapidly than the general price level. 
D) falls at the same rate as the general price level.

Question 15

What is the rationale for efficiency wages? How do efficiency wages help address the principal-agent problem?

Accepted Answer

The rationale behind efficiency wages is

Question 16

Suppose two workers can harvest $46 worth of apples per day and three workers can harvest $60 worth. On the basis of this information, we can say that the

Accepted Answer

A) marginal product of each of the first two workers is 23. 
B) marginal revenue product of each of the first two workers is $23. 
C) marginal revenue product of the third worker is $14. 
D) third worker should not be hired. 
A) marginal product of each of the first two workers is 23. 
B) marginal revenue product of each of the first two workers is $23. 
C) marginal revenue product of the third worker is $14. 
D) third worker should not be hired.

Question 17

Explain the principal-agent problem in job performance and list the actions that can be taken to correct the problem.

Accepted Answer

The principal-agent problem at a firm is

Question 18

Refer to the given data. At the profit-maximizing level of employment, this firm's total revenue will be

Accepted Answer

A) $16. 
B) $30. 
C) $24. 
D) $32. 
A) $16. 
B) $30. 
C) $24. 
D) $32.

Question 19

The table shows labor demand data on the left and labor supply data on the right. How many units of output will this profit-maximizing firm produce?

Accepted Answer

A) 55 
B) 48 
C) 28 
D) 39 
A) 55 
B) 48 
C) 28 
D) 39

Question 20

What explanations are offered for why unions have declined?

Accepted Answer

There have been structural changes in th

Exam 17: Wage Determination

African Americans have higher unionization rates than whites.

In recent years, total compensation to workers has risen faster than the take-home pay of average workers. This implies that

A profit-maximizing firm operates in purely competitive product and resource markets, with the resource and production schedules shown in the table. The product price is $15 per unit and the cost per worker is $540. How many workers will the firm employ?

Human capital investment refers to spending on education and worker training.

Do unions have a positive or negative effect on economic efficiency?

The table shows labor demand data on the left and labor supply data on the right. We can conclude that

Right-to-work laws prohibit the formation of labor unions.

In a purely competitive labor market, an individual firm must pay a rising price for labor if it wants to acquire more labor.

List and explain the factors that lead to a high level of productivity in the United States.

What is the difference between nominal wages and real wages?

Refer to the given data. The marginal revenue product of the second worker is

Refer to the given data. In maximizing its profit, this firm will employ

The concept of "wages" includes the following items, except

The real wage will rise if the nominal wage

What is the rationale for efficiency wages? How do efficiency wages help address the principal-agent problem?

Suppose two workers can harvest $46 worth of apples per day and three workers can harvest $60 worth. On the basis of this information, we can say that the

Explain the principal-agent problem in job performance and list the actions that can be taken to correct the problem.

Refer to the given data. At the profit-maximizing level of employment, this firm's total revenue will be

The table shows labor demand data on the left and labor supply data on the right. How many units of output will this profit-maximizing firm produce?

What explanations are offered for why unions have declined?

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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