Question 1

The more inelastic the price elasticity of demand for a product, the greater is the elasticity of demand for labor.

Accepted Answer

A) True 
 B)False

Question 2

The income effect of a change in wages says that as your wage rate rises, you will work more hours, since the opportunity cost of leisure also rises.

Accepted Answer

A) True 
 B)False

Question 3

XYZ Company is currently experiencing a backlog at its loading dock. A manager figures that if she were to hire an extra worker for $100 per day, then sales volumes would increase by $400, due to the removal of the congestion on the dock. The worker's marginal revenue product is

Accepted Answer

A)  $100. 
B)  $300. 
C)  $400. 
D)  $500. 
A)  $100. 
B)  $300. 
C)  $400. 
D)  $500.

Question 4

In recent years, the United States has produced a growing share of

Accepted Answer

A)  intangible, manufactured goods. 
B)  intangible services. 
C)  tangible, manufactured goods. 
D)  tangible services. 
A)  intangible, manufactured goods. 
B)  intangible services. 
C)  tangible, manufactured goods. 
D)  tangible services.

Question 5

Compare and contrast the labor use for competitive firms and firms with monopoly power. Support your discussion with a graph.

Accepted Answer

Firms that enjoy monopoly power in produ

Question 6

In recent years, the U.S. economy has shifted from producing services to producing goods.

Accepted Answer

A) True 
 B)False

Question 7

The labor supply curve for an individual is typically upward sloping but at a decreasing rate.

Accepted Answer

A) True 
 B)False

Question 8

An increase in the price of capital will decrease the demand for labor.

Accepted Answer

A) True 
 B)False

Question 9

Which factor might cause labor supply in the furniture manufacturing industry to decrease at any given wage?

Accepted Answer

A)  increase in the number of migrant workers seeking temporary work visas 
B)  steep drop in the stock market causing household wealth to decline 
C)  increase in wages in the appliance industry that uses similar workers 
D)  rise in furniture prices due to higher tariffs on imported furniture 
A)  increase in the number of migrant workers seeking temporary work visas 
B)  steep drop in the stock market causing household wealth to decline 
C)  increase in wages in the appliance industry that uses similar workers 
D)  rise in furniture prices due to higher tariffs on imported furniture

Question 10

Which event will NOT shift the labor supply curve to the right?

Accepted Answer

A)  an increase in the population 
B)  delayed retirement by large portions of senior citizens 
C)  an increase in nonwage benefits, such as a new 50% discount on merchandise 
D)  a boom in the stock market that increases income from investments 
A)  an increase in the population 
B)  delayed retirement by large portions of senior citizens 
C)  an increase in nonwage benefits, such as a new 50% discount on merchandise 
D)  a boom in the stock market that increases income from investments

Question 11

(Table) Based on the table, what must be TRUE about the labor supply curve for wage rates above $45 per hour?
$\begin{array}{c}
\text { Labor Supply Schedule }\
\begin{array}{|c|c|}
\hline \text { Wage rate (\$/hr.) } & \text { Hours of work (per week) } \
\hline 10 & 26 \
\hline 15 & 32 \
\hline 25 & 36 \
\hline 35 & 40 \
\hline 45 & 41 \
\hline 50 & 38 \
\hline
\end{array}
\end{array}$

Accepted Answer

A)  Workers substitute work for leisure. 
B)  The income effect dominates the substitution effect. 
C)  The substitution effect dominates the income effect. 
D)  As the wage rate rises, more hours of work are available. 
A)  Workers substitute work for leisure. 
B)  The income effect dominates the substitution effect. 
C)  The substitution effect dominates the income effect. 
D)  As the wage rate rises, more hours of work are available.

Question 12

Factory jobs are no longer plentiful in the United States. This is due to all of these EXCEPT

Accepted Answer

A)  a shift to service industries. 
B)  growth in international trade. 
C)  the transformation of the manufacturing process through the growth of the Internet. 
D)  more foreign direct investment into the United States. 
A)  a shift to service industries. 
B)  growth in international trade. 
C)  the transformation of the manufacturing process through the growth of the Internet. 
D)  more foreign direct investment into the United States.

Question 13

The higher the price elasticity of demand for a product, the greater is the elasticity of demand for labor.

Accepted Answer

A) True 
 B)False

Question 14

Some of the factors that affect the demand for labor include

Accepted Answer

A)  changes in productivity. 
B)  demographic changes. 
C)  nonwage aspects of jobs. 
D)  wages in alternative jobs. 
A)  changes in productivity. 
B)  demographic changes. 
C)  nonwage aspects of jobs. 
D)  wages in alternative jobs.

Question 15

The elasticity of demand for labor is calculated by taking the ratio of the percentage change in quantity of labor demanded to the percentage change in the wage rate.

Accepted Answer

A) True 
 B)False

Question 16

Which statement helps explain why wage discrimination still exists?

Accepted Answer

A)  The cost of recruiting and training new workers is very low. 
B)  Women may be less mobile in the workforce than men. 
C)  Social norms direct women toward higher-wage occupations. 
D)  Women choose occupations with career paths that heavily penalize extended absences from the labor market. 
A)  The cost of recruiting and training new workers is very low. 
B)  Women may be less mobile in the workforce than men. 
C)  Social norms direct women toward higher-wage occupations. 
D)  Women choose occupations with career paths that heavily penalize extended absences from the labor market.

Question 17

Gary Becker believes firms that do not discriminate will attract the best employees and earn higher profits than firms that do discriminate.

Accepted Answer

A) True 
 B)False

Question 18

Assume that due to the increase in the popularity of television reality shows in recent years, wages of the reality stars have decreased while the number of reality stars employed has increased. This means that the

Accepted Answer

A)  supply of television stars has increased, while demand has remained constant. 
B)  demand for television stars has increased, while supply has remained constant. 
C)  demand for, and supply of, television stars have both increased, but supply has increased relatively more. 
D)  demand for, and supply of, television stars have both increased, but demand has increased relatively more. 
A)  supply of television stars has increased, while demand has remained constant. 
B)  demand for television stars has increased, while supply has remained constant. 
C)  demand for, and supply of, television stars have both increased, but supply has increased relatively more. 
D)  demand for, and supply of, television stars have both increased, but demand has increased relatively more.

Question 19

State officeholders have an incentive to placate large public unions if they want to be re-elected.

Accepted Answer

A) True 
 B)False

Question 20

Which of these does NOT help to explain the trend of declining union membership?

Accepted Answer

A)  reduction in wages in manufacturing due to offshoring 
B)  worker protection laws that apply to all labor force participants 
C)  growth of the service sector 
D)  right-to-work statutes 
A)  reduction in wages in manufacturing due to offshoring 
B)  worker protection laws that apply to all labor force participants 
C)  growth of the service sector 
D)  right-to-work statutes

The more inelastic the price elasticity of demand for a product, the greater is the elasticity of demand for labor.

The income effect of a change in wages says that as your wage rate rises, you will work more hours, since the opportunity cost of leisure also rises.

XYZ Company is currently experiencing a backlog at its loading dock. A manager figures that if she were to hire an extra worker for $100 per day, then sales volumes would increase by $400, due to the removal of the congestion on the dock. The worker's marginal revenue product is

In recent years, the United States has produced a growing share of

Compare and contrast the labor use for competitive firms and firms with monopoly power. Support your discussion with a graph.

In recent years, the U.S. economy has shifted from producing services to producing goods.

The labor supply curve for an individual is typically upward sloping but at a decreasing rate.

An increase in the price of capital will decrease the demand for labor.

Which factor might cause labor supply in the furniture manufacturing industry to decrease at any given wage?

Which event will NOT shift the labor supply curve to the right?

(Table) Based on the table, what must be TRUE about the labor supply curve for wage rates above $45 per hour? Labor Supply Schedule Wage rate ( \/ hr.) Hours of work (per week) 10 26 15 32 25 36 35 40 45 41 50 38

Factory jobs are no longer plentiful in the United States. This is due to all of these EXCEPT

The higher the price elasticity of demand for a product, the greater is the elasticity of demand for labor.

Some of the factors that affect the demand for labor include

The elasticity of demand for labor is calculated by taking the ratio of the percentage change in quantity of labor demanded to the percentage change in the wage rate.

Which statement helps explain why wage discrimination still exists?

Gary Becker believes firms that do not discriminate will attract the best employees and earn higher profits than firms that do discriminate.

Assume that due to the increase in the popularity of television reality shows in recent years, wages of the reality stars have decreased while the number of reality stars employed has increased. This means that the

State officeholders have an incentive to placate large public unions if they want to be re-elected.

Which of these does NOT help to explain the trend of declining union membership?

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Elasticity

Consumer Choice and Demand

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Exam 11: The Labor Market

The more inelastic the price elasticity of demand for a product, the greater is the elasticity of demand for labor.

The income effect of a change in wages says that as your wage rate rises, you will work more hours, since the opportunity cost of leisure also rises.

XYZ Company is currently experiencing a backlog at its loading dock. A manager figures that if she were to hire an extra worker for $100 per day, then sales volumes would increase by $400, due to the removal of the congestion on the dock. The worker's marginal revenue product is

In recent years, the United States has produced a growing share of

Compare and contrast the labor use for competitive firms and firms with monopoly power. Support your discussion with a graph.

In recent years, the U.S. economy has shifted from producing services to producing goods.

The labor supply curve for an individual is typically upward sloping but at a decreasing rate.

An increase in the price of capital will decrease the demand for labor.

Which factor might cause labor supply in the furniture manufacturing industry to decrease at any given wage?

Which event will NOT shift the labor supply curve to the right?

(Table) Based on the table, what must be TRUE about the labor supply curve for wage rates above $45 per hour? Labor Supply Schedule Wage rate ( \/ hr.) Hours of work (per week) 10 26 15 32 25 36 35 40 45 41 50 38

Factory jobs are no longer plentiful in the United States. This is due to all of these EXCEPT

The higher the price elasticity of demand for a product, the greater is the elasticity of demand for labor.

Some of the factors that affect the demand for labor include

The elasticity of demand for labor is calculated by taking the ratio of the percentage change in quantity of labor demanded to the percentage change in the wage rate.

Which statement helps explain why wage discrimination still exists?

Gary Becker believes firms that do not discriminate will attract the best employees and earn higher profits than firms that do discriminate.

Assume that due to the increase in the popularity of television reality shows in recent years, wages of the reality stars have decreased while the number of reality stars employed has increased. This means that the

State officeholders have an incentive to placate large public unions if they want to be re-elected.

Which of these does NOT help to explain the trend of declining union membership?

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Elasticity

Consumer Choice and Demand

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Land, Capital Markets, and Innovation

Externalities and Public Goods

Network Goods

Poverty and Income Distribution

International Trade

Filters