Question 1

If working people in the economy become wealthier,

Accepted Answer

A)  the supply curve of labor will shift to the right 
B)  the demand curve for labor will shift to the right 
C)  the demand curve for labor will shift to the left 
D)  some people may choose to work longer hours 
E)  some people may choose more leisure and fewer work hours 
A)  the supply curve of labor will shift to the right 
B)  the demand curve for labor will shift to the right 
C)  the demand curve for labor will shift to the left 
D)  some people may choose to work longer hours 
E)  some people may choose more leisure and fewer work hours E

Question 2

Which of the following is an illustration of the backward-bending supply curve?

Accepted Answer

A)  Alex Maxwell is cutting down on the number of hours he works a week because the wage rate he receives has increased. 
B)  Tim Duncan's wage rate is so high that he cannot stop working (playing professional basketball) even though he would like to retire. 
C)  The more Patrick Roy works, the higher is his opportunity cost. 
D)  Steve Hymer quits work because he feels that the employer is paying him a wage rate below his MRP. 
E)  Unskilled workers who do hard (back bending) work earn wages that are considerably below average. 
A)  Alex Maxwell is cutting down on the number of hours he works a week because the wage rate he receives has increased. 
B)  Tim Duncan's wage rate is so high that he cannot stop working (playing professional basketball) even though he would like to retire. 
C)  The more Patrick Roy works, the higher is his opportunity cost. 
D)  Steve Hymer quits work because he feels that the employer is paying him a wage rate below his MRP. 
E)  Unskilled workers who do hard (back bending) work earn wages that are considerably below average. A

Question 3

The law of diminishing returns states that as more workers are hired, beyond some point,

Accepted Answer

A)  total output will fall 
B)  total cost will fall 
C)  marginal physical product will fall 
D)  total cost will rise 
E)  total output will rise 
A)  total output will fall 
B)  total cost will fall 
C)  marginal physical product will fall 
D)  total cost will rise 
E)  total output will rise C

Question 4

A profit-maximizing firm will employ labor up to the point where MRP = wage.

Accepted Answer

A) True 
 B)False

Question 5

When more workers are hired, the firm's output expands at an increasing rate only

Accepted Answer

A)  when the law of diminishing returns is operative 
B)  under conditions of noncompeting labor markets 
C)  if each worker's MPP is positive 
D)  when technology is improved 
E)  when the gains from specialization of labor outweigh all other factors affecting labor productivity 
A)  when the law of diminishing returns is operative 
B)  under conditions of noncompeting labor markets 
C)  if each worker's MPP is positive 
D)  when technology is improved 
E)  when the gains from specialization of labor outweigh all other factors affecting labor productivity

Question 6

Think totals: In a perfectly competitive labor market, the total labor cost curve, TLC

Accepted Answer

A)  is upward sloping, and the marginal labor cost curve, MLC, is downward sloping 
B)  is downward sloping, and the marginal labor cost curve, MLC, is upward sloping 
C)  and the marginal labor cost curve, MLC, are both horizontal curves 
D)  is horizontal and the marginal labor cost curve, MLC, is upward sloping 
E)  is upward sloping, and the marginal labor cost curve, MLC, is horizontal 
A)  is upward sloping, and the marginal labor cost curve, MLC, is downward sloping 
B)  is downward sloping, and the marginal labor cost curve, MLC, is upward sloping 
C)  and the marginal labor cost curve, MLC, are both horizontal curves 
D)  is horizontal and the marginal labor cost curve, MLC, is upward sloping 
E)  is upward sloping, and the marginal labor cost curve, MLC, is horizontal

Question 7

-In Exhibit O-2, the marginal labor cost of hiring a worker is

Accepted Answer

A)  $5 
B)  $6 
C)  $10 
D)  $30 
E)  unable to be determined from this information 
A)  $5 
B)  $6 
C)  $10 
D)  $30 
E)  unable to be determined from this information

Question 8

Technological improvement (e.g., better capital equipment) will result in a leftward shift of the marginal revenue product of labor.

Accepted Answer

A) True 
 B)False

Question 9

The ethics justifying wage rate determination in a perfectly competitive labor market is

Accepted Answer

A)  from each according to his or her ability, to each according to his or her labor supply 
B)  workers receive a wage rate equal to their marginal revenue product 
C)  the wage rate differentials workers receive are equal to the differentials in noncompeting labor markets 
D)  workers produce a good whose price alone determines their wage rate and determines as well the value consumers place on the good they produce 
E)  the wage rate that workers receive multiplied by the number of workers equals the sum of each worker's marginal revenue product 
A)  from each according to his or her ability, to each according to his or her labor supply 
B)  workers receive a wage rate equal to their marginal revenue product 
C)  the wage rate differentials workers receive are equal to the differentials in noncompeting labor markets 
D)  workers produce a good whose price alone determines their wage rate and determines as well the value consumers place on the good they produce 
E)  the wage rate that workers receive multiplied by the number of workers equals the sum of each worker's marginal revenue product

Question 10

Specialization of labor can result in output increasing at an increasing rate.

Accepted Answer

A) True 
 B)False

Question 11

Some careers, such as flight attendants, nurses, and primary school teachers, used to be considered "women's jobs." Other jobs, such as airline pilots, physicians, and school principals, were traditionally considered to be "men's jobs" and were not generally open to women. If women are allowed increased access to the jobs that had traditionally been considered to be "men's," explain the effects on wage rates.

Accepted Answer

The supply of women to "women's jobs" wo

Question 12

The supply curve of labor is typically upward sloping because

Accepted Answer

A)  a decrease in the wage rate causes workers to work more hours 
B)  the opportunity cost associated with giving up leisure time rises 
C)  some workers leave the industry when the wage rate is too high 
D)  all workers show the same willingness to work at a given wage rate 
E)  the price of the good rises as more workers are hired and more output is produced 
A)  a decrease in the wage rate causes workers to work more hours 
B)  the opportunity cost associated with giving up leisure time rises 
C)  some workers leave the industry when the wage rate is too high 
D)  all workers show the same willingness to work at a given wage rate 
E)  the price of the good rises as more workers are hired and more output is produced

Question 13

-In Exhibit O-2 and Exhibit O-3, using the data in Exhibit O-2, the labor supply curvefacing the firm in Exhibit O-3 would be shown in the graph labeled

Accepted Answer

A)  I 
B)  II 
C)  III 
D)  IV 
E)  unable to be determined from this information 
A)  I 
B)  II 
C)  III 
D)  IV 
E)  unable to be determined from this information

Question 14

When Lionel, an orange grower, hires Terry, Terry's marginal physical product per hour is 9 bushels of oranges. The price is $5 per bushel and the hourly wage rate is $55. Weknow then that

Accepted Answer

A)  orange growing is a profitable business 
B)  Terry creates a division of labor that adds not only output but profit for Lionel 
C)  the labor market is not competitive because price and the wage rate are not the same 
D)  Lionel should not have hired Terry 
E)  Terry's marginal revenue product is greater than the wage rate 
A)  orange growing is a profitable business 
B)  Terry creates a division of labor that adds not only output but profit for Lionel 
C)  the labor market is not competitive because price and the wage rate are not the same 
D)  Lionel should not have hired Terry 
E)  Terry's marginal revenue product is greater than the wage rate

Question 15

Persistent wage differentials in the U.S. can best be explained by

Accepted Answer

A)  increased immigration of both skilled and unskilled workers 
B)  increased labor-force mobility among the states 
C)  the existence of noncompeting labor markets 
D)  the existence of backward-bending labor supply curves 
E)  the increasing competitiveness of firms in labor markets 
A)  increased immigration of both skilled and unskilled workers 
B)  increased labor-force mobility among the states 
C)  the existence of noncompeting labor markets 
D)  the existence of backward-bending labor supply curves 
E)  the increasing competitiveness of firms in labor markets

Question 16

Prolonged war on a country's home soil is likely to expand a country's labor supply.

Accepted Answer

A) True 
 B)False

Question 17

If demand for the finished good increases, the demand for the type of labor producing this good will also increase.

Accepted Answer

A) True 
 B)False

Question 18

The optimal hiring rule is to keep hiring laborers until the ________ of the last laborerhired.

Accepted Answer

A)  wage rate = MLC 
B)  wage rate = MPP 
C)  wage rate = MR 
D)  wage rate = MRP 
E)  wage rate = TLC 
A)  wage rate = MLC 
B)  wage rate = MPP 
C)  wage rate = MR 
D)  wage rate = MRP 
E)  wage rate = TLC

Question 19

How do you explain why income inequality in the United States has been increasing?

Accepted Answer

A)  New technologies raise the MRP of educated workers, while having no (or a much smaller effect) on the MRP of uneducated workers. 
B)  The MRP of rich workers increases more slowly than the MRP of poor workers. 
C)  The labor supply of poor workers shifts to the left, while the labor supply of rich workers shifts to the right. 
D)  Many talented U.S. workers, earning high incomes, are lured away by firms located in other countries that are paying considerably higher wage rates. 
E)  Minimum wage laws have raised the minimum wage rates. 
A)  New technologies raise the MRP of educated workers, while having no (or a much smaller effect) on the MRP of uneducated workers. 
B)  The MRP of rich workers increases more slowly than the MRP of poor workers. 
C)  The labor supply of poor workers shifts to the left, while the labor supply of rich workers shifts to the right. 
D)  Many talented U.S. workers, earning high incomes, are lured away by firms located in other countries that are paying considerably higher wage rates. 
E)  Minimum wage laws have raised the minimum wage rates.

Question 20

-In Exhibit O-9, the MPP of the first dog groomer is

Accepted Answer

A)  0 
B)  1 
C)  4 
D)  6 
E)  10 
A)  0 
B)  1 
C)  4 
D)  6 
E)  10

If working people in the economy become wealthier,

Which of the following is an illustration of the backward-bending supply curve?

The law of diminishing returns states that as more workers are hired, beyond some point,

A profit-maximizing firm will employ labor up to the point where MRP = wage.

When more workers are hired, the firm's output expands at an increasing rate only

Think totals: In a perfectly competitive labor market, the total labor cost curve, TLC

-In Exhibit O-2, the marginal labor cost of hiring a worker is

Technological improvement (e.g., better capital equipment) will result in a leftward shift of the marginal revenue product of labor.

The ethics justifying wage rate determination in a perfectly competitive labor market is

Specialization of labor can result in output increasing at an increasing rate.

The supply curve of labor is typically upward sloping because

-In Exhibit O-2 and Exhibit O-3, using the data in Exhibit O-2, the labor supply curvefacing the firm in Exhibit O-3 would be shown in the graph labeled

When Lionel, an orange grower, hires Terry, Terry's marginal physical product per hour is 9 bushels of oranges. The price is $5 per bushel and the hourly wage rate is $55. Weknow then that

Persistent wage differentials in the U.S. can best be explained by

Prolonged war on a country's home soil is likely to expand a country's labor supply.

If demand for the finished good increases, the demand for the type of labor producing this good will also increase.

The optimal hiring rule is to keep hiring laborers until the ________ of the last laborerhired.

How do you explain why income inequality in the United States has been increasing?

-In Exhibit O-9, the MPP of the first dog groomer is

Introduction

Production Possibilities and Opportunity Costs

Demand and Supply

Elasticity

Happiness, Utility, and Consumer Choice

Price Ceilings and Price Floors

Entrepreneurship and Business Ownership

Costs of Production

Maximizing Profit

Identifying Markets and Market Structures

Price and Output in Monopoly, Monopolistic Competition, and Perfect Competition

Price and Output Determination Under Oligopoly

Antitrust and Regulation

Externalities, Market Failure, and Public Choice

Wages and Employment: Monopsony and Labor Unions

Interest, Rent, and Profit

Income Distribution and Poverty

International Trade

Exchange Rates, Balance of Payments, and International Debt

The Economic Problems of Less-Developed Economies

Filters

Exam 15: Wage Rates in Competitive Labor Markets

If working people in the economy become wealthier,

Which of the following is an illustration of the backward-bending supply curve?

The law of diminishing returns states that as more workers are hired, beyond some point,

A profit-maximizing firm will employ labor up to the point where MRP = wage.

When more workers are hired, the firm's output expands at an increasing rate only

Think totals: In a perfectly competitive labor market, the total labor cost curve, TLC

-In Exhibit O-2, the marginal labor cost of hiring a worker is

Technological improvement (e.g., better capital equipment) will result in a leftward shift of the marginal revenue product of labor.

The ethics justifying wage rate determination in a perfectly competitive labor market is

Specialization of labor can result in output increasing at an increasing rate.

The supply curve of labor is typically upward sloping because

-In Exhibit O-2 and Exhibit O-3, using the data in Exhibit O-2, the labor supply curvefacing the firm in Exhibit O-3 would be shown in the graph labeled

When Lionel, an orange grower, hires Terry, Terry's marginal physical product per hour is 9 bushels of oranges. The price is $5 per bushel and the hourly wage rate is $55. Weknow then that

Persistent wage differentials in the U.S. can best be explained by

Prolonged war on a country's home soil is likely to expand a country's labor supply.

If demand for the finished good increases, the demand for the type of labor producing this good will also increase.

The optimal hiring rule is to keep hiring laborers until the ________ of the last laborerhired.

How do you explain why income inequality in the United States has been increasing?

-In Exhibit O-9, the MPP of the first dog groomer is

Introduction

Production Possibilities and Opportunity Costs

Demand and Supply

Elasticity

Happiness, Utility, and Consumer Choice

Price Ceilings and Price Floors

Entrepreneurship and Business Ownership

Costs of Production

Maximizing Profit

Identifying Markets and Market Structures

Price and Output in Monopoly, Monopolistic Competition, and Perfect Competition

Price and Output Determination Under Oligopoly

Antitrust and Regulation

Externalities, Market Failure, and Public Choice

Wages and Employment: Monopsony and Labor Unions

Interest, Rent, and Profit

Income Distribution and Poverty

International Trade

Exchange Rates, Balance of Payments, and International Debt

The Economic Problems of Less-Developed Economies

Filters