Question 1

The marginal physical product of labor is

Accepted Answer

A)  the change in output a firm receives from hiring an additional worker. 
B)  the extra revenue a firm receives from hiring an additional worker. 
C)  set equal to the going wage rate for labor. 
D)  always positive. 
A)  the change in output a firm receives from hiring an additional worker. 
B)  the extra revenue a firm receives from hiring an additional worker. 
C)  set equal to the going wage rate for labor. 
D)  always positive.

Question 2

Assume that the going wage for a worker at a competitive firm is $50 a day. If the marginal revenue product for the sixth worker is $45 a day, the

Accepted Answer

A)  sixth worker should be hired. 
B)  firm is maximizing its profits. 
C)  firm should hire fewer than six workers. 
D)  competitive firm can change the wage rate. 
A)  sixth worker should be hired. 
B)  firm is maximizing its profits. 
C)  firm should hire fewer than six workers. 
D)  competitive firm can change the wage rate.

Question 3

Unions tend to _____ wage differentials between a union and nonunion sector by _____ entry into union-sector jobs.

Accepted Answer

A)  decrease; promoting 
B)  decrease; restricting 
C)  increase; promoting 
D)  increase; restricting 
A)  decrease; promoting 
B)  decrease; restricting 
C)  increase; promoting 
D)  increase; restricting

Question 4

If wage discrimination against women exists within some firms, Becker proposes that women who are not discriminated against will be paid higher wages.

Accepted Answer

A) True 
 B)False

Question 5

The substitution effect means that

Accepted Answer

A)  leisure and work are perfect substitutes. 
B)  leisure and work are perfect complements. 
C)  if wages increase, hours of work increase. 
D)  if wages increase, hours of work decrease. 
A)  leisure and work are perfect substitutes. 
B)  leisure and work are perfect complements. 
C)  if wages increase, hours of work increase. 
D)  if wages increase, hours of work decrease.

Question 6

How are competitive labor markets similar to competitive product markets?

Accepted Answer

The first assumption of a competitive la

Question 7

What key assumptions are made about competitive labor markets?

Accepted Answer

(1) Firms operate in competitive industr

Question 8

Which union represents truck drivers?

Accepted Answer

A)  AFT 
B)  PATCO 
C)  Teamsters 
D)  UAW 
A)  AFT 
B)  PATCO 
C)  Teamsters 
D)  UAW

Question 9

A union raises wages for nonunion members as well as for their members within the economy.

Accepted Answer

A) True 
 B)False

Question 10

Which of these factors leading to different wages is LEAST likely to be considered a form of economic discrimination?

Accepted Answer

A)  age 
B)  disability 
C)  national origin 
D)  education level 
A)  age 
B)  disability 
C)  national origin 
D)  education level

Question 11

(Figure: Input/Output Monopsony) The monopsony in the input, which is a monopoly in the output market (as shown in the graph), would pay _____ in wages.

Accepted Answer

A)  $75 
B)  $50 
C)  $25 
D)  $17.50 
A)  $75 
B)  $50 
C)  $25 
D)  $17.50

Question 12

In the following individual labor supply curve, at which wage is the substitution effect the strongest?

Accepted Answer

A)  $10 per hour 
B)  $15 per hour 
C)  $20 per hour 
D)  $25 per hour 
A)  $10 per hour 
B)  $15 per hour 
C)  $20 per hour 
D)  $25 per hour

Question 13

The age discrimination clause in the Employment Act of 1967 protects workers over the age of 40 from being discriminated against because of their age.

Accepted Answer

A) True 
 B)False

Question 14

When the individual labor supply curve is positively sloped, the _____ effect dominates and higher wages lead to _____ hours worked.

Accepted Answer

A)  income; more 
B)  substitution; more 
C)  substitution; fewer 
D)  income; fewer 
A)  income; more 
B)  substitution; more 
C)  substitution; fewer 
D)  income; fewer

Question 15

An increase in population will

Accepted Answer

A)  not affect the market labor supply curve. 
B)  shift the market labor supply curve to the right. 
C)  shift the market labor supply curve to the left. 
D)  shift the market demand curve to the right. 
A)  not affect the market labor supply curve. 
B)  shift the market labor supply curve to the right. 
C)  shift the market labor supply curve to the left. 
D)  shift the market demand curve to the right.

Question 16

Abdul signed a labor contract that has an agency shop clause. According to the clause, Abdul

Accepted Answer

A)  must join the union prior to his first day of employment. 
B)  has 30 days to join the union. 
C)  does not have to join the union; however, he must pay union dues. 
D)  is not required to join the union or pay union dues. 
A)  must join the union prior to his first day of employment. 
B)  has 30 days to join the union. 
C)  does not have to join the union; however, he must pay union dues. 
D)  is not required to join the union or pay union dues.

Question 17

(Figure: Monopolists in Monopsony Markets) The graph depicts a firm that is a monopolist in the product market but a monopsony in the input market. Which curve represents the marginal revenue product of labor?

Accepted Answer

A)  R 
B)  S 
C)  T 
D)  U 
A)  R 
B)  S 
C)  T 
D)  U

Question 18

(Table) Based on the table, the marginal revenue product of the fourth worker is
$\begin{array}{|c|c|c|c|c|}
\hline L & T P & \boldsymbol{M P P L} & \boldsymbol{P} & \boldsymbol{M R P L} \
\hline 0 & 0 & 0 & \$ 10 & \$ 0 \
\hline 1 & 6 & 6 & \$ 10 & \$ 60 \
\hline 2 & 13 & 7 & \$ 10 & \$ 70 \
\hline 3 & 22 & & \$ 10 & \$ 90 \
\hline 4 & 35 & 13 & \$ 10 & \
\hline 5 & 47 & & \$ 10 & \$ 120 \
\hline 6 & 57 & 10 & \$ 10 & \$ 100 \
\hline 7 & 65 & 8 & \$ 10 & \$ 80 \
\hline 8 & & 6 & \$ 10 & \$ 60 \
\hline 9 & 76 & 5 & \$ 10 & \$ 50 \
\hline 10 & 80 & 4 & \$ 10 & \$ 40 \
\hline
\end{array}$

Accepted Answer

A)  $130. 
B)  $120. 
C)  $110. 
D)  $100. 
A)  $130. 
B)  $120. 
C)  $110. 
D)  $100.

Question 19

Ceteris paribus, what is likely to happen in the union and nonunion labor markets if a state passes a right-to-work law?

Accepted Answer

A)  Union wages are likely to fall, and nonunion wages are likely to rise as firms switch demand to nonunion workers. 
B)  Union wages are likely to rise, and nonunion wages are likely to fall as firms switch demand to nonunion workers and more nonunion workers enter the labor market. 
C)  Union wages are likely to rise, and nonunion wages are likely to fall as union members decide to leave the union. 
D)  Union wages and nonunion wages are likely to fall, since the law would prohibit unions, leading to an overall increase in the supply of labor. 
A)  Union wages are likely to fall, and nonunion wages are likely to rise as firms switch demand to nonunion workers. 
B)  Union wages are likely to rise, and nonunion wages are likely to fall as firms switch demand to nonunion workers and more nonunion workers enter the labor market. 
C)  Union wages are likely to rise, and nonunion wages are likely to fall as union members decide to leave the union. 
D)  Union wages and nonunion wages are likely to fall, since the law would prohibit unions, leading to an overall increase in the supply of labor.

Question 20

Acme Corporation employs workers practicing a variety of crafts, with all of its workers being represented by a single union. This suggests that this union is most likely a craft union.

Accepted Answer

A) True 
 B)False

The marginal physical product of labor is

Assume that the going wage for a worker at a competitive firm is $50 a day. If the marginal revenue product for the sixth worker is $45 a day, the

Unions tend to _ wage differentials between a union and nonunion sector by _ entry into union-sector jobs.

If wage discrimination against women exists within some firms, Becker proposes that women who are not discriminated against will be paid higher wages.

The substitution effect means that

How are competitive labor markets similar to competitive product markets?

What key assumptions are made about competitive labor markets?

Which union represents truck drivers?

A union raises wages for nonunion members as well as for their members within the economy.

Which of these factors leading to different wages is LEAST likely to be considered a form of economic discrimination?

(Figure: Input/Output Monopsony) The monopsony in the input, which is a monopoly in the output market (as shown in the graph), would pay _____ in wages.

In the following individual labor supply curve, at which wage is the substitution effect the strongest?

The age discrimination clause in the Employment Act of 1967 protects workers over the age of 40 from being discriminated against because of their age.

When the individual labor supply curve is positively sloped, the _ effect dominates and higher wages lead to _ hours worked.

An increase in population will

Abdul signed a labor contract that has an agency shop clause. According to the clause, Abdul

(Figure: Monopolists in Monopsony Markets) The graph depicts a firm that is a monopolist in the product market but a monopsony in the input market. Which curve represents the marginal revenue product of labor?

(Table) Based on the table, the marginal revenue product of the fourth worker is L TP 0 0 0 \ 10 \ 0 1 6 6 \ 10 \ 60 2 13 7 \ 10 \ 70 3 22 \ 10 \ 90 4 35 13 \ 10 5 47 \ 10 \ 120 6 57 10 \ 10 \ 100 7 65 8 \ 10 \ 80 8 6 \ 10 \ 60 9 76 5 \ 10 \ 50 10 80 4 \ 10 \ 40

Ceteris paribus, what is likely to happen in the union and nonunion labor markets if a state passes a right-to-work law?

Acme Corporation employs workers practicing a variety of crafts, with all of its workers being represented by a single union. This suggests that this union is most likely a craft union.

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

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Exam 11: The Labor Market

The marginal physical product of labor is

Assume that the going wage for a worker at a competitive firm is $50 a day. If the marginal revenue product for the sixth worker is $45 a day, the

Unions tend to _____ wage differentials between a union and nonunion sector by _____ entry into union-sector jobs.

If wage discrimination against women exists within some firms, Becker proposes that women who are not discriminated against will be paid higher wages.

The substitution effect means that

How are competitive labor markets similar to competitive product markets?

What key assumptions are made about competitive labor markets?

Which union represents truck drivers?

A union raises wages for nonunion members as well as for their members within the economy.

Which of these factors leading to different wages is LEAST likely to be considered a form of economic discrimination?

(Figure: Input/Output Monopsony) The monopsony in the input, which is a monopoly in the output market (as shown in the graph), would pay _____ in wages.

In the following individual labor supply curve, at which wage is the substitution effect the strongest?

The age discrimination clause in the Employment Act of 1967 protects workers over the age of 40 from being discriminated against because of their age.

When the individual labor supply curve is positively sloped, the _____ effect dominates and higher wages lead to _____ hours worked.

An increase in population will

Abdul signed a labor contract that has an agency shop clause. According to the clause, Abdul

(Figure: Monopolists in Monopsony Markets) The graph depicts a firm that is a monopolist in the product market but a monopsony in the input market. Which curve represents the marginal revenue product of labor?

(Table) Based on the table, the marginal revenue product of the fourth worker is L TP 0 0 0 \ 10 \ 0 1 6 6 \ 10 \ 60 2 13 7 \ 10 \ 70 3 22 \ 10 \ 90 4 35 13 \ 10 5 47 \ 10 \ 120 6 57 10 \ 10 \ 100 7 65 8 \ 10 \ 80 8 6 \ 10 \ 60 9 76 5 \ 10 \ 50 10 80 4 \ 10 \ 40

Ceteris paribus, what is likely to happen in the union and nonunion labor markets if a state passes a right-to-work law?

Acme Corporation employs workers practicing a variety of crafts, with all of its workers being represented by a single union. This suggests that this union is most likely a craft union.

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

Unions tend to _ wage differentials between a union and nonunion sector by _ entry into union-sector jobs.

When the individual labor supply curve is positively sloped, the _ effect dominates and higher wages lead to _ hours worked.