Question 1

An increase in market labor supply can occur with an increase in immigration as well as:

Accepted Answer

A)  a decrease in the working age population. 
B)  an unfavorable change in the taste and preference for work. 
C)  an increase in nonlabor income. 
D)  a reduction in taxes. 
A)  a decrease in the working age population. 
B)  an unfavorable change in the taste and preference for work. 
C)  an increase in nonlabor income. 
D)  a reduction in taxes.

Question 2

When the extra dollar spent on labor has the same benefit as the extra dollar spent on capital:

Accepted Answer

A)  profits are minimized. 
B)  profits are maximized. 
C)  costs are minimized. 
D)  costs are maximized. 
A)  profits are minimized. 
B)  profits are maximized. 
C)  costs are minimized. 
D)  costs are maximized.

Question 3

A higher wage rate will increase the opportunity cost of:

Accepted Answer

A)  employment. 
B)  substitution. 
C)  supply. 
D)  leisure. 
A)  employment. 
B)  substitution. 
C)  supply. 
D)  leisure.

Question 4

If the MRP of Ann is greater than her wage while the MRP of Ben is less than his wage rate; economists would predict that overtime:

Accepted Answer

A)  Ann's wage will fall, while Ben's will stagnate. 
B)  Ann's wage will fall, while Ben's will fall. 
C)  Ann's wage will increase, while Ben's will stagnate. 
D)  Ann's wage will increase, while Ben's will fall. 
A)  Ann's wage will fall, while Ben's will stagnate. 
B)  Ann's wage will fall, while Ben's will fall. 
C)  Ann's wage will increase, while Ben's will stagnate. 
D)  Ann's wage will increase, while Ben's will fall.

Question 5

The marginal revenue product for labor (MRPL) is derived from _____ and the demand for the final output.

Accepted Answer

A)  marginal cost 
B)  marginal labor 
C)  the productivity of the worker 
D)  the final output revenue 
A)  marginal cost 
B)  marginal labor 
C)  the productivity of the worker 
D)  the final output revenue

Question 6

In the United States, the average worker is more productive than workers in many other nations due, in part, to:

Accepted Answer

A)  increases in productivity. 
B)  increases in cost. 
C)  high levels of physical capital. 
D)  increases in international trade. 
A)  increases in productivity. 
B)  increases in cost. 
C)  high levels of physical capital. 
D)  increases in international trade.

Question 7

The power of labor unions to negotiate higher wages is generally derived from their ability to:

Accepted Answer

A)  charge membership dues. 
B)  limit membership. 
C)  threaten a strike. 
D)  compromise. 
A)  charge membership dues. 
B)  limit membership. 
C)  threaten a strike. 
D)  compromise.

Question 8

A decrease in market labor supply can occur with a decrease in the working age population as well as:

Accepted Answer

A)  an increase in immigration. 
B)  a favorable change in tastes and preferences for work. 
C)  a decrease in nonlabor income. 
D)  an increase in taxes. 
A)  an increase in immigration. 
B)  a favorable change in tastes and preferences for work. 
C)  a decrease in nonlabor income. 
D)  an increase in taxes.

Question 9

_____ is the practice of requiring businesses to hire more workers than needed to perform a specific job, which reduces productivity.

Accepted Answer

A)  Featherbedding 
B)  Labor discrimination 
C)  Union creation 
D)  Labor market inefficiency 
A)  Featherbedding 
B)  Labor discrimination 
C)  Union creation 
D)  Labor market inefficiency

Question 10

In a monopoly, prices tend to be _____ than the competitive price, and in a monopsony, prices tend to be:

Accepted Answer

A)  lower; higher. 
B)  higher; higher. 
C)  higher; lower. 
D)  lower; lower. 
A)  lower; higher. 
B)  higher; higher. 
C)  higher; lower. 
D)  lower; lower.

Question 11

In a monopsony labor market, wages are generally _____ the wages in a competitive labor market.

Accepted Answer

A)  lower than 
B)  higher than 
C)  the same as 
D)  falling faster than 
A)  lower than 
B)  higher than 
C)  the same as 
D)  falling faster than

Question 12

Leila receives a substantial raise in pay and decides to work fewer hours each week. This is an example of the _____ effect on the labor supply.

Accepted Answer

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

Question 13

The labor supply curve for a monopsony has _____ 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 14

In a competitive labor market, generally a firm can _____ at the going price of labor.

Accepted Answer

A)  hire no additional workers 
B)  double the amount of workers 
C)  lay off 50% of existing workers 
D)  hire as many workers as needed 
A)  hire no additional workers 
B)  double the amount of workers 
C)  lay off 50% of existing workers 
D)  hire as many workers as needed

Question 15

The _____ for any resource is the _____ of that resource.

Accepted Answer

A)  cost; demand 
B)  marginal revenue product (MRP); cost 
C)  demand; marginal revenue product (MRP) 
D)  supply; marginal revenue product (MRP) 
A)  cost; demand 
B)  marginal revenue product (MRP); cost 
C)  demand; marginal revenue product (MRP) 
D)  supply; marginal revenue product (MRP)

Question 16

(Figure: Labor in a Competitive Market 0) In the figure, the _____ worker should not be hired.

Accepted Answer

A)  first 
B)  second 
C)  third 
D)  fourth 
A)  first 
B)  second 
C)  third 
D)  fourth

Question 17

In a competitive labor market, firms will hire workers up to the point where the marginal revenue product of labor equals the:

Accepted Answer

A)  demand for labor. 
B)  supply of the product. 
C)  cost of capital 
D)  price of labor. 
A)  demand for labor. 
B)  supply of the product. 
C)  cost of capital 
D)  price of labor.

Question 18

(Figure: MPP and MRP) Unit Price = $5
In the table, what is the marginal revenue product of the third worker?
 $\begin{array}{|l|l|l|l|l|}
 \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L}  \
& \text { Product } & & \text { Revenue } & \
& \text { (Q) } & & \text { (TR) } &\
 \hline & 35 & 35 & ? & \$ 175 \
\hline 2 & 75 & 40 & ? & \$ 200 \
\hline 3 & 105 & 30 & \$ 525 & ? \
\hline 4 & 130 & 25 & \$ 650 & ? \
\hline 5 & 150 & 20 & \$ 750 & ?\
\hline
\end{array}$

Accepted Answer

A)  $100 
B)  $150 
C)  $200 
D)  $90 
A)  $100 
B)  $150 
C)  $200 
D)  $90

Question 19

(Figure: Labor in a Competitive Market A) In the figure, at equilibrium, the firm would hire _____ at a price of labor of _____.

Accepted Answer

A)  one worker; $350 
B)  two workers; $400 
C)  three workers; $250 
D)  six workers; $50 
A)  one worker; $350 
B)  two workers; $400 
C)  three workers; $250 
D)  six workers; $50

Question 20

A _____ is an organization through which workers bargain collectively for wages, benefits, and work conditions.

Accepted Answer

A)  labor union 
B)  farm collective 
C)  cooperative 
D)  cartel 
A)  labor union 
B)  farm collective 
C)  cooperative 
D)  cartel

Exam 17: Labor and Other Resources

An increase in market labor supply can occur with an increase in immigration as well as:

When the extra dollar spent on labor has the same benefit as the extra dollar spent on capital:

A higher wage rate will increase the opportunity cost of:

If the MRP of Ann is greater than her wage while the MRP of Ben is less than his wage rate; economists would predict that overtime:

The marginal revenue product for labor (MRPL) is derived from _____ and the demand for the final output.

In the United States, the average worker is more productive than workers in many other nations due, in part, to:

The power of labor unions to negotiate higher wages is generally derived from their ability to:

A decrease in market labor supply can occur with a decrease in the working age population as well as:

_____ is the practice of requiring businesses to hire more workers than needed to perform a specific job, which reduces productivity.

In a monopoly, prices tend to be _____ than the competitive price, and in a monopsony, prices tend to be:

In a monopsony labor market, wages are generally _____ the wages in a competitive labor market.

Leila receives a substantial raise in pay and decides to work fewer hours each week. This is an example of the _____ effect on the labor supply.

The labor supply curve for a monopsony has _____ slope.

In a competitive labor market, generally a firm can _____ at the going price of labor.

The _____ for any resource is the _____ of that resource.

(Figure: Labor in a Competitive Market 0) In the figure, the _____ worker should not be hired.

In a competitive labor market, firms will hire workers up to the point where the marginal revenue product of labor equals the:

(Figure: MPP and MRP) Unit Price = $5 In the table, what is the marginal revenue product of the third worker? 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 ?

(Figure: Labor in a Competitive Market A) In the figure, at equilibrium, the firm would hire _____ at a price of labor of _____.

A _____ is an organization through which workers bargain collectively for wages, benefits, and work conditions.

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

The marginal revenue product for labor (MRP_L) is derived from _____ and the demand for the final output.

The _ for any resource is the _ of that resource.

(Figure: Labor in a Competitive Market A) In the figure, at equilibrium, the firm would hire _ at a price of labor of _.