Question 1

According to the income effect, if an employee receives higher wages, ceteris paribus, it leads to fewer hours worked.

Accepted Answer

A) True 
 B)False

Question 2

The income effect on the labor supply causes the supply curve for individuals to curve backward.

Accepted Answer

A) True 
 B)False

Question 3

Robotic manufacturing has made labor demand for factory workers

Accepted Answer

A)  more elastic. 
B)  less elastic. 
C)  perfectly elastic. 
D)  perfectly inelastic. 
A)  more elastic. 
B)  less elastic. 
C)  perfectly elastic. 
D)  perfectly inelastic.

Question 4

(Figure: Labor Supply Curve) Based on the graph, the income effect is shown by segment

Accepted Answer

A)  ab. 
B)  ac. 
C)  bc. 
D)  abc. 
A)  ab. 
B)  ac. 
C)  bc. 
D)  abc.

Question 5

(Table: Labor and Quantity of Output) The table shows the production function for a firm using a given amount of capital. If the price of the product is $15 each, which answer table would best represent the firm's value of the marginal revenue product of labor?
$\begin{array}{|c|c|}
\hline \text { Units of Labor } & \begin{array}{c}
\text { Quantity of } \
\text { Output }
\end{array} \
\hline 1 & 20 \
\hline 2 & 28 \
\hline 3 & 35 \
\hline 4 & 41 \
\hline 5 & 44 \
\hline 6 & 35 \
\hline
\end{array}$

Accepted Answer

A)  $\begin{array}{|c|c|c|}
\hline \begin{array}{c}
\text { Units of } \
\text { Labor }
\end{array} & \begin{array}{c}
\text { Quantity of } \
\text { Output }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Revenue } \
\text { Product of } \
\text { Labor }
\end{array} \
\hline 1 & 20 & 200 \
\hline 2 & 28 & 80 \
\hline 3 & 35 & 70 \
\hline 4 & 41 & 60 \
\hline 5 & 44 & 30 \
\hline 6 & 35 & -90 \
\hline
\end{array}$ 
B)  
 $\begin{array}{|c|c|c|}
\hline \begin{array}{c}
\text { Units of } \
\text { Labor }
\end{array} & \begin{array}{c}
\text { Quantity of } \
\text { Output }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Revenue } \
\text { Product of } \
\text { Labor }
\end{array} \
\hline 1 & 20 & 300 \
\hline 2 & 28 & 120 \
\hline 3 & 35 & 105 \
\hline 4 & 41 & 90 \
\hline 5 & 44 & 45 \
\hline 6 & 35 & -135 \
\hline
\end{array}$ 
C)  
 $\begin{array}{|c|c|c|}
\hline \begin{array}{c}
\text { Units of } \
\text { Labor }
\end{array} & \begin{array}{c}
\text { Quantity of } \
\text { Output }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Revenue } \
\text { Product of } \
\text { Labor }
\end{array} \
\hline 1 & 20 & 15 \
\hline 2 & 28 & 15 \
\hline 3 & 35 & 15 \
\hline 4 & 41 & 15 \
\hline 5 & 44 & 15 \
\hline 6 & 35 & 15 \
\hline
\end{array}$ 
D)  
 $\begin{array}{|c|c|c|}
\hline \begin{array}{c}
\text { Units of } \
\text { Labor }
\end{array} & \begin{array}{c}
\text { Quantity of } \
\text { Output }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Revenue } \
\text { Product of } \
\text { Labor }
\end{array} \
\hline 1 & 20 & 300 \
\hline 2 & 28 & 420 \
\hline 3 & 35 & 525 \
\hline 4 & 41 & 615 \
\hline 5 & 44 & 660 \
\hline 6 & 35 & 525 \
\hline
\end{array}$ 
A)  $\begin{array}{|c|c|c|}
\hline \begin{array}{c}
\text { Units of } \
\text { Labor }
\end{array} & \begin{array}{c}
\text { Quantity of } \
\text { Output }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Revenue } \
\text { Product of } \
\text { Labor }
\end{array} \
\hline 1 & 20 & 200 \
\hline 2 & 28 & 80 \
\hline 3 & 35 & 70 \
\hline 4 & 41 & 60 \
\hline 5 & 44 & 30 \
\hline 6 & 35 & -90 \
\hline
\end{array}$ 
B)  
 $\begin{array}{|c|c|c|}
\hline \begin{array}{c}
\text { Units of } \
\text { Labor }
\end{array} & \begin{array}{c}
\text { Quantity of } \
\text { Output }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Revenue } \
\text { Product of } \
\text { Labor }
\end{array} \
\hline 1 & 20 & 300 \
\hline 2 & 28 & 120 \
\hline 3 & 35 & 105 \
\hline 4 & 41 & 90 \
\hline 5 & 44 & 45 \
\hline 6 & 35 & -135 \
\hline
\end{array}$ 
C)  
 $\begin{array}{|c|c|c|}
\hline \begin{array}{c}
\text { Units of } \
\text { Labor }
\end{array} & \begin{array}{c}
\text { Quantity of } \
\text { Output }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Revenue } \
\text { Product of } \
\text { Labor }
\end{array} \
\hline 1 & 20 & 15 \
\hline 2 & 28 & 15 \
\hline 3 & 35 & 15 \
\hline 4 & 41 & 15 \
\hline 5 & 44 & 15 \
\hline 6 & 35 & 15 \
\hline
\end{array}$ 
D)  
 $\begin{array}{|c|c|c|}
\hline \begin{array}{c}
\text { Units of } \
\text { Labor }
\end{array} & \begin{array}{c}
\text { Quantity of } \
\text { Output }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Revenue } \
\text { Product of } \
\text { Labor }
\end{array} \
\hline 1 & 20 & 300 \
\hline 2 & 28 & 420 \
\hline 3 & 35 & 525 \
\hline 4 & 41 & 615 \
\hline 5 & 44 & 660 \
\hline 6 & 35 & 525 \
\hline
\end{array}$

Question 6

What would happen to wages and labor if worker safely regulations were abolished, making work conditions more dangerous?

Accepted Answer

A)  Both wages and labor quantity would rise. 
B)  Both wages and labor quantity would fall. 
C)  Wages would fall, and labor quantity would rise. 
D)  Wages would rise, and labor quantity would fall. 
A)  Both wages and labor quantity would rise. 
B)  Both wages and labor quantity would fall. 
C)  Wages would fall, and labor quantity would rise. 
D)  Wages would rise, and labor quantity would fall.

Question 7

The competitive labor market determines the equilibrium wage and employment on the basis of market supply and demand.

Accepted Answer

A) True 
 B)False

Question 8

Suppose Alcoa, Inc. is a monopsonist employer in the town of Alcoa, TN. Using the concept of marginal factor cost, each time Alcoa increases the number of workers it hires, it will pay a _____, marginal factor cost.

Accepted Answer

A)  higher wage, resulting in an even higher 
B)  higher wage but lead to a lower 
C)  lower wage, resulting in a lower 
D)  lower wage but lead to a higher 
A)  higher wage, resulting in an even higher 
B)  higher wage but lead to a lower 
C)  lower wage, resulting in a lower 
D)  lower wage but lead to a higher

Question 9

The "substitution effect" for labor supply states that people work more as wages rise because the opportunity cost of leisure also rises.

Accepted Answer

A) True 
 B)False

Question 10

As your hourly wages increase, ceteris paribus, your _____ increases.

Accepted Answer

A)  purchasing power 
B)  incentive to be unproductive 
C)  marginal utility 
D)  productivity 
A)  purchasing power 
B)  incentive to be unproductive 
C)  marginal utility 
D)  productivity

Question 11

Which laws addressed the inequities of gender pay?

Accepted Answer

A)  Equal Pay Act of 1963 and Employment Non-Discrimination Act 
B)  Civil Rights Act of 1964 and Executive Order 11246 
C)  Equal Pay Act of 1963 and Lily Ledbetter Fair Pay Act 
D)  Executive Order 11246 and Employment Non-Discrimination Act 
A)  Equal Pay Act of 1963 and Employment Non-Discrimination Act 
B)  Civil Rights Act of 1964 and Executive Order 11246 
C)  Equal Pay Act of 1963 and Lily Ledbetter Fair Pay Act 
D)  Executive Order 11246 and Employment Non-Discrimination Act

Question 12

The supply curve of labor within a competitive labor market is

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  perfectly elastic. 
D)  perfectly inelastic. 
A)  elastic. 
B)  inelastic. 
C)  perfectly elastic. 
D)  perfectly inelastic.

Question 13

Suppose that the labor force participation rate increases. The labor supply curve should shift _____, and the number of workers available at any given wage rate will _____.

Accepted Answer

A)  left; decrease 
B)  left; increase 
C)  right; decrease 
D)  right; increase 
A)  left; decrease 
B)  left; increase 
C)  right; decrease 
D)  right; increase

Question 14

(Table) According to the table, if the profit-maximizing firm currently employs five workers, it
$\begin{array}{c}
\text { Competitive Labor Market }\
\begin{array}{|c|c|c|c|c|c|}
\hline L & Q & M P P & \boldsymbol{P} & \boldsymbol{M M P} & \boldsymbol{W} \
\hline 0 & 0 & 0 & 8 & 0 & 80 \
\hline 1 & 5 & 5 & 8 & 40 & 80 \
\hline 2 & 11 & 6 & 8 & 48 & 80 \
\hline 3 & 18 & 7 & 8 & 56 & 80 \
\hline 4 & \mathrm{~A} & 9 & 8 & 72 & 80 \
\hline 5 & 38 & \mathrm{~B} & 8 & 88 & 80 \
\hline 6 & 50 & 12 & 8 & \mathrm{C} & 80 \
\hline 7 & 61 & 11 & 8 & 88 & 80 \
\hline 8 & 71 & 10 & 8 & 80 & 80 \
\hline 9 & 80 & 9 & 8 & 72 & 80 \
\hline 10 & 85 & 5 & 8 & 40 & 80 \
\hline
\end{array}
\end{array}$

Accepted Answer

A)  should hire more workers to maximize profit. 
B)  is currently maximizing profit. 
C)  should reduce its workforce to maximize profit. 
D)  is experiencing economies of scale. 
A)  should hire more workers to maximize profit. 
B)  is currently maximizing profit. 
C)  should reduce its workforce to maximize profit. 
D)  is experiencing economies of scale.

Question 15

A right-to-work state is one in which

Accepted Answer

A)  unions are prohibited from forming. 
B)  nonunion workers are guaranteed due process before they can be fired. 
C)  all citizens are guaranteed employment. 
D)  new employees hired by a company with union representation do not have to join the union. 
A)  unions are prohibited from forming. 
B)  nonunion workers are guaranteed due process before they can be fired. 
C)  all citizens are guaranteed employment. 
D)  new employees hired by a company with union representation do not have to join the union.

Question 16

If the demand for electricity is price inelastic, one can conclude that the demand for the engineers and technicians working on the electric grid is sensitive to the wage rate of these workers.

Accepted Answer

A) True 
 B)False

Question 17

Which career is LEAST likely to expand in demand over the next decade?

Accepted Answer

A)  Internet security technicians 
B)  health care professionals 
C)  elementary school teachers 
D)  steel manufacturing 
A)  Internet security technicians 
B)  health care professionals 
C)  elementary school teachers 
D)  steel manufacturing

Question 18

Which of these is NOT a provision of the Taft-Hartley Act?

Accepted Answer

A)  restrictions on secondary boycotts 
B)  requirements that unions bargain in good faith 
C)  increased restrictions on right-to-work statutes 
D)  a ban on closed shops 
A)  restrictions on secondary boycotts 
B)  requirements that unions bargain in good faith 
C)  increased restrictions on right-to-work statutes 
D)  a ban on closed shops

Question 19

An important demographic change that has affected labor supply over the past three decades has been the increasing participation of women in the labor force.

Accepted Answer

A) True 
 B)False

Question 20

An increase in the wage rate will shift the supply curve of labor.

Accepted Answer

A) True 
 B)False

According to the income effect, if an employee receives higher wages, ceteris paribus, it leads to fewer hours worked.

The income effect on the labor supply causes the supply curve for individuals to curve backward.

Robotic manufacturing has made labor demand for factory workers

(Figure: Labor Supply Curve) Based on the graph, the income effect is shown by segment

What would happen to wages and labor if worker safely regulations were abolished, making work conditions more dangerous?

The competitive labor market determines the equilibrium wage and employment on the basis of market supply and demand.

Suppose Alcoa, Inc. is a monopsonist employer in the town of Alcoa, TN. Using the concept of marginal factor cost, each time Alcoa increases the number of workers it hires, it will pay a _____, marginal factor cost.

The "substitution effect" for labor supply states that people work more as wages rise because the opportunity cost of leisure also rises.

As your hourly wages increase, ceteris paribus, your _____ increases.

Which laws addressed the inequities of gender pay?

The supply curve of labor within a competitive labor market is

Suppose that the labor force participation rate increases. The labor supply curve should shift _, and the number of workers available at any given wage rate will _.

(Table) According to the table, if the profit-maximizing firm currently employs five workers, it Competitive Labor Market L Q MPP 0 0 0 8 0 80 1 5 5 8 40 80 2 11 6 8 48 80 3 18 7 8 56 80 4 9 8 72 80 5 38 8 88 80 6 50 12 8 80 7 61 11 8 88 80 8 71 10 8 80 80 9 80 9 8 72 80 10 85 5 8 40 80

A right-to-work state is one in which

If the demand for electricity is price inelastic, one can conclude that the demand for the engineers and technicians working on the electric grid is sensitive to the wage rate of these workers.

Which career is LEAST likely to expand in demand over the next decade?

Which of these is NOT a provision of the Taft-Hartley Act?

An important demographic change that has affected labor supply over the past three decades has been the increasing participation of women in the labor force.

An increase in the wage rate will shift the supply curve of labor.

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

Exam 11: The Labor Market

According to the income effect, if an employee receives higher wages, ceteris paribus, it leads to fewer hours worked.

The income effect on the labor supply causes the supply curve for individuals to curve backward.

Robotic manufacturing has made labor demand for factory workers

(Figure: Labor Supply Curve) Based on the graph, the income effect is shown by segment

What would happen to wages and labor if worker safely regulations were abolished, making work conditions more dangerous?

The competitive labor market determines the equilibrium wage and employment on the basis of market supply and demand.

Suppose Alcoa, Inc. is a monopsonist employer in the town of Alcoa, TN. Using the concept of marginal factor cost, each time Alcoa increases the number of workers it hires, it will pay a _____, marginal factor cost.

The "substitution effect" for labor supply states that people work more as wages rise because the opportunity cost of leisure also rises.

As your hourly wages increase, ceteris paribus, your _____ increases.

Which laws addressed the inequities of gender pay?

The supply curve of labor within a competitive labor market is

Suppose that the labor force participation rate increases. The labor supply curve should shift _____, and the number of workers available at any given wage rate will _____.

(Table) According to the table, if the profit-maximizing firm currently employs five workers, it Competitive Labor Market L Q MPP 0 0 0 8 0 80 1 5 5 8 40 80 2 11 6 8 48 80 3 18 7 8 56 80 4 9 8 72 80 5 38 8 88 80 6 50 12 8 80 7 61 11 8 88 80 8 71 10 8 80 80 9 80 9 8 72 80 10 85 5 8 40 80

A right-to-work state is one in which

If the demand for electricity is price inelastic, one can conclude that the demand for the engineers and technicians working on the electric grid is sensitive to the wage rate of these workers.

Which career is LEAST likely to expand in demand over the next decade?

Which of these is NOT a provision of the Taft-Hartley Act?

An important demographic change that has affected labor supply over the past three decades has been the increasing participation of women in the labor force.

An increase in the wage rate will shift the supply curve of labor.

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

Suppose that the labor force participation rate increases. The labor supply curve should shift _, and the number of workers available at any given wage rate will _.