Question 1

_____ is the additional output from an additional unit of labor, holding the amount of physical capital and other inputs fixed.

Accepted Answer

A)  Marginal revenue product 
B)  Total revenue 
C)  Marginal physical product 
D)  Total product 
A)  Marginal revenue product 
B)  Total revenue 
C)  Marginal physical product 
D)  Total product

Question 2

The XYZ Union is negotiating with the ABC Manufacturing Company over wages for the employees. This is an example of:

Accepted Answer

A)  consensus. 
B)  collective bargaining. 
C)  detente. 
D)  compromise. 
A)  consensus. 
B)  collective bargaining. 
C)  detente. 
D)  compromise.

Question 3

A _____ is the additional income that is given to workers in a job that has less desirable characteristics.

Accepted Answer

A)  bonus 
B)  tax break 
C)  compensating differential 
D)  tax credit 
A)  bonus 
B)  tax break 
C)  compensating differential 
D)  tax credit

Question 4

(Figure: Labor in a Competitive Market 0) In the figure, if the marginal revenue product of the fourth worker is $150, the firm should:

Accepted Answer

A)  hire the fifth worker. 
B)  reduce employment to three workers. 
C)  do nothing. 
D)  reduce employment to two workers. 
A)  hire the fifth worker. 
B)  reduce employment to three workers. 
C)  do nothing. 
D)  reduce employment to two workers.

Question 5

With only one buyer, the market type is:

Accepted Answer

A)  a monopoly. 
B)  a monopsony. 
C)  an oligopoly. 
D)  an oligopsony. 
A)  a monopoly. 
B)  a monopsony. 
C)  an oligopoly. 
D)  an oligopsony.

Question 6

Market labor supply curves generally have _____ slope.

Accepted Answer

A)  a horizontal 
B)  a vertical 
C)  an upward 
D)  a downward 
A)  a horizontal 
B)  a vertical 
C)  an upward 
D)  a downward

Question 7

Unions can _____ wages by _____ the supply of labor.

Accepted Answer

A)  increase; increasing 
B)  decrease; increasing 
C)  increase; decreasing 
D)  decrease; decreasing 
A)  increase; increasing 
B)  decrease; increasing 
C)  increase; decreasing 
D)  decrease; decreasing

Question 8

The demand for labor is _____ demand.

Accepted Answer

A)  an economic 
B)  a market 
C)  a monopoly 
D)  a derived 
A)  an economic 
B)  a market 
C)  a monopoly 
D)  a derived

Question 9

There is generally _____ relationship between the price of labor and the quantity of labor that is supplied in the market.

Accepted Answer

A)  a negative 
B)  a positive 
C)  no 
D)  an indirect 
A)  a negative 
B)  a positive 
C)  no 
D)  an indirect

Question 10

_____ includes the wages paid to workers, the cost of any benefits the worker receives, and other expenses related to employing a worker.

Accepted Answer

A)  The price of labor 
B)  Marginal revenue product 
C)  The wage 
D)  Take-home pay 
A)  The price of labor 
B)  Marginal revenue product 
C)  The wage 
D)  Take-home pay

Question 11

Diminishing returns results in a labor demand curve that:

Accepted Answer

A)  slopes upward. 
B)  slopes downward. 
C)  shifts to the left. 
D)  shifts to the right. 
A)  slopes upward. 
B)  slopes downward. 
C)  shifts to the left. 
D)  shifts to the right.

Question 12

The _____ effect on labor supply occurs when workers supply more labor at higher wages because the opportunity cost of leisure increases.

Accepted Answer

A)  income 
B)  substitution 
C)  complementary 
D)  elasticity 
A)  income 
B)  substitution 
C)  complementary 
D)  elasticity

Question 13

Changes in either the marginal physical product of labor (MPPL) or the _____ will shift the demand curve for labor.

Accepted Answer

A)  price of labor 
B)  marginal revenue (MR) 
C)  total revenue (TR) 
D)  total product (TP) 
A)  price of labor 
B)  marginal revenue (MR) 
C)  total revenue (TR) 
D)  total product (TP)

Question 14

The bargaining power of a firm depends on the degree of its _____ in hiring workers.

Accepted Answer

A)  ability to strike 
B)  monopsony power 
C)  cash flow 
D)  marginal revenue 
A)  ability to strike 
B)  monopsony power 
C)  cash flow 
D)  marginal revenue

Question 15

Increases in the market labor supply put _____ pressure on the price of labor.

Accepted Answer

A)  little 
B)  no 
C)  downward 
D)  upward 
A)  little 
B)  no 
C)  downward 
D)  upward

Question 16

Discuss three factors that contribute to differences in earnings.

Accepted Answer

The first factor that contributes to dif

Question 17

In terms of the substitution effect and the income effect, discuss the possible labor supply responses when an employee receives an increase in wages.

Accepted Answer

For an employee who receives an increase

Question 18

(Figure: Labor in a Competitive Market A) In the figure, if the price of labor is $150, the firm will hire:

Accepted Answer

A)  five worker. 
B)  two workers. 
C)  three workers. 
D)  four workers. 
A)  five worker. 
B)  two workers. 
C)  three workers. 
D)  four workers.

Question 19

(Figure: MPP and MRP) Unit Price = $5
In the table, in a competitive labor market, if the prevailing price of labor is $150, this firm should hire _____ workers.
 $\begin{array}{|l|l|l|l|l|}
 \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L}  \
& \text { Product } & & \text { Revenue } & \
& \text { (Q) } & & \text { (TR) } &\
 \hline & 35 & 35 & ? & \$ 175 \
\hline 2 & 75 & 40 & ? & \$ 200 \
\hline 3 & 105 & 30 & \$ 525 & ? \
\hline 4 & 130 & 25 & \$ 650 & ? \
\hline 5 & 150 & 20 & \$ 750 & ?\
\hline
\end{array}$

Accepted Answer

A)  two 
B)  three 
C)  four 
D)  five 
A)  two 
B)  three 
C)  four 
D)  five

Question 20

If Simone, who recently received an increase in wages, decides to work more hours, the _____ effect for leisure outweighs the _____ effect for her.

Accepted Answer

A)  income; complementary 
B)  substitution; income 
C)  complementary; elasticity 
D)  income; substitution 
A)  income; complementary 
B)  substitution; income 
C)  complementary; elasticity 
D)  income; substitution

Exam 17: Labor and Other Resources

_____ is the additional output from an additional unit of labor, holding the amount of physical capital and other inputs fixed.

The XYZ Union is negotiating with the ABC Manufacturing Company over wages for the employees. This is an example of:

A _____ is the additional income that is given to workers in a job that has less desirable characteristics.

(Figure: Labor in a Competitive Market 0) In the figure, if the marginal revenue product of the fourth worker is $150, the firm should:

With only one buyer, the market type is:

Market labor supply curves generally have _____ slope.

Unions can _____ wages by _____ the supply of labor.

The demand for labor is _____ demand.

There is generally _____ relationship between the price of labor and the quantity of labor that is supplied in the market.

_____ includes the wages paid to workers, the cost of any benefits the worker receives, and other expenses related to employing a worker.

Diminishing returns results in a labor demand curve that:

The _____ effect on labor supply occurs when workers supply more labor at higher wages because the opportunity cost of leisure increases.

Changes in either the marginal physical product of labor (MPPL) or the _____ will shift the demand curve for labor.

The bargaining power of a firm depends on the degree of its _____ in hiring workers.

Increases in the market labor supply put _____ pressure on the price of labor.

Discuss three factors that contribute to differences in earnings.

In terms of the substitution effect and the income effect, discuss the possible labor supply responses when an employee receives an increase in wages.

(Figure: Labor in a Competitive Market A) In the figure, if the price of labor is $150, the firm will hire:

(Figure: MPP and MRP) Unit Price = $5 In the table, in a competitive labor market, if the prevailing price of labor is $150, this firm should hire _____ workers. Labor Total Total Product Revenue (Q) (TR) 35 35 ? \ 175 2 75 40 ? \ 200 3 105 30 \ 525 ? 4 130 25 \ 650 ? 5 150 20 \ 750 ?

If Simone, who recently received an increase in wages, decides to work more hours, the _____ effect for leisure outweighs the _____ effect for her.

The Basics of Economics

Why We Trade

The Supply and Demand Model

Elasticity

Consumer Choice

The Economic Efficiency of Markets

Taxation: An Economic Analysis

Externalities, the Environment, and Public Goods

Organizing a Business

Stocks and Bonds

The Cost of Doing Business

Perfect Competition

Monopoly and Antitrust Laws

Monopolistic Competition and Price Discrimination

Oligopoly

Behavioral Economics and Strategy

The Distribution of Income

Information and Health Economics

GDP and the Price Level

Unemployment and the Business Cycle

Long Run Economic Growth

Saving, Investment, and the Federal Budget Deficit

The Monetary System

Money and the Price Level in the Long Run

Aggregate Supply and Aggregate Demand

Monetary Policy and Interest Rates

Fiscal Policy and the Business Cycle

The Aggregate Expenditure Model

Inflation Expectations and Stabilization Policies

International Trade

Foreign Exchange Markets

International Finance

Filters

Unions can _ wages by _ the supply of labor.

Changes in either the marginal physical product of labor (MPP_L) or the _____ will shift the demand curve for labor.

If Simone, who recently received an increase in wages, decides to work more hours, the _ effect for leisure outweighs the _ effect for her.