Question 1

A monopsony's marginal worker has a marginal revenue product of $12 an hour and a wage of $8. A minimum wage of $10 will have which of these effects?

Accepted Answer

A)  decrease the average hourly cost of a worker 
B)  decrease the marginal hourly cost of a worker 
C)  increase the marginal revenue product of the marginal worker 
D)  increase the firm's average profit per worker 
A)  decrease the average hourly cost of a worker 
B)  decrease the marginal hourly cost of a worker 
C)  increase the marginal revenue product of the marginal worker 
D)  increase the firm's average profit per worker

Question 2

In Japan workers receive ________ rates of formal training than in the United States and this leads to ________ quit rates.

Accepted Answer

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

Question 3

During a recession, average labor productivity tends to decrease because output falls and

Accepted Answer

A)  prices also fall. 
B)  workers with specific training are not laid off. 
C)  workers with general training are not laid off. 
D)  neither workers with general training nor workers with firm-specific training are laid off. 
A)  prices also fall. 
B)  workers with specific training are not laid off. 
C)  workers with general training are not laid off. 
D)  neither workers with general training nor workers with firm-specific training are laid off.

Question 4

It costs an employer $20,000 to train a worker. The worker, after training, is paid $50,000. During a recession, the worker's productivity falls, but then, one year later is expected to return to its original level such that the present value of future profits is $30,000. What is the lowest the worker's productivity during the year can fall to before the firm will consider firing the worker (assuming they continue to pay $50,000 a year)?

Accepted Answer

A)  $20,000 
B)  $30,000 
C)  $40,000 
D)  $0 
A)  $20,000 
B)  $30,000 
C)  $40,000 
D)  $0

Question 5

Two employers, A and B, pay the same wage but Employer A faces a more inelastic supply curve of labor than Employer B. Both firms are monopsonies but have similar outputs and technologies. Other things being the same, then in the long run

Accepted Answer

A)  Employer A will employ less capital than Employer B. 
B)  Employer A will employ more capital than Employer B. 
C)  Both employers will employ the same amount of capital. 
D)  Both firms, in the long run, will pay a wage equal to their marginal revenue product. 
A)  Employer A will employ less capital than Employer B. 
B)  Employer A will employ more capital than Employer B. 
C)  Both employers will employ the same amount of capital. 
D)  Both firms, in the long run, will pay a wage equal to their marginal revenue product.

Question 6

Statistical discrimination is

Accepted Answer

A)  using statistics to judge the average characteristics of a group of workers. 
B)  judging one person according to a group to which he or she belongs. 
C)  using statistics in hiring. 
D)  firing people due to low average productivity. 
A)  using statistics to judge the average characteristics of a group of workers. 
B)  judging one person according to a group to which he or she belongs. 
C)  using statistics in hiring. 
D)  firing people due to low average productivity.

Question 7

An increase in quasi-fixed costs would probably lead to a(n) ________ in the number of employees hired and a(n) ________ in the number of overtime hours worked.

Accepted Answer

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

Question 8

Employment-at-will means that

Accepted Answer

A)  employees have the right to be hired for any job they desire. 
B)  employees have the right to be hired at any job for which they are qualified. 
C)  employers must have a "just reason" to fire an employee. 
D)  both employees and employers have the right to terminate employment at any time, for any reason. 
A)  employees have the right to be hired for any job they desire. 
B)  employees have the right to be hired at any job for which they are qualified. 
C)  employers must have a "just reason" to fire an employee. 
D)  both employees and employers have the right to terminate employment at any time, for any reason.

Question 9

A public school currently it pays all teachers the same, regardless of their area of expertise. At $70,000, it hires good teachers in all areas except science. Because science is a field in demand, the school can only hire poor science teachers. It would have to pay science teachers $90,000 to hire good science teachers. If one out of five teachers is a science teacher, what is the marginal expense of getting a good science teacher instead of a poor one?

Accepted Answer

A)  $90,000 
B)  $100,000 
C)  $20,000 
D)  $450,000 
A)  $90,000 
B)  $100,000 
C)  $20,000 
D)  $450,000

Question 10

Specific training is paid for by

Accepted Answer

A)  the employer. 
B)  the employee. 
C)  both the employer and the employee. 
D)  neither the employer nor the employee. 
A)  the employer. 
B)  the employee. 
C)  both the employer and the employee. 
D)  neither the employer nor the employee.

Question 11

Legislation requiring employer-provided health insurance for part-time workers would probably ________ the employment of part-time workers and ________ the overtime of full-time workers.

Accepted Answer

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

Question 12

If a firm offers specific training to its workers, when the training is over,

Accepted Answer

A)  workers will most likely be paid a wage that is equal to their marginal product. 
B)  workers will most likely be paid a wage that is greater than their marginal product, to compensate for the training. 
C)  workers will most likely be paid a wage that is less than their marginal product. 
D)  workers will most likely be paid a wage that is less than their wage before training. 
A)  workers will most likely be paid a wage that is equal to their marginal product. 
B)  workers will most likely be paid a wage that is greater than their marginal product, to compensate for the training. 
C)  workers will most likely be paid a wage that is less than their marginal product. 
D)  workers will most likely be paid a wage that is less than their wage before training.

Question 13

Which of the following event will likely lead a firm to use overtime rather than hire new workers

Accepted Answer

A)  the firm gets rid of its pension plan. 
B)  the firm starts to pay for health insurance. 
C)  the marginal productivity of all workers, new and current, increases 20%. 
D)  both overtime and base pay increase 20%. 
A)  the firm gets rid of its pension plan. 
B)  the firm starts to pay for health insurance. 
C)  the marginal productivity of all workers, new and current, increases 20%. 
D)  both overtime and base pay increase 20%.

Question 14

A monopsony can hire one worker at a wage of $5, two workers at a wage of $6 each, three workers at $7 each, and so on (each added worker adding one dollar to the wage rate). If the marginal revenue product for all workers is $16, what wage will it pay?

Accepted Answer

A)  $10 
B)  $11 
C)  $16 
D)  $17 
A)  $10 
B)  $11 
C)  $16 
D)  $17

Question 15

Workers with firm-specific training are ________ likely to be laid off than are workers with general training because ________

Accepted Answer

A)  more; they are paid less than workers with general training. 
B)  more; their wage is less than their marginal product. 
C)  less; they are paid less than workers with general training. 
D)  less; their wage is less than their marginal product. 
A)  more; they are paid less than workers with general training. 
B)  more; their wage is less than their marginal product. 
C)  less; they are paid less than workers with general training. 
D)  less; their wage is less than their marginal product.

Question 16

If reserve clauses were outlawed in major-league baseball,

Accepted Answer

A)  major league teams would have less incentive to train minor league players. 
B)  minor league players would be paid more. 
C)  players in the major leagues would be paid less than their marginal product. 
D)  players in the major leagues would be paid more than their marginal product. 
A)  major league teams would have less incentive to train minor league players. 
B)  minor league players would be paid more. 
C)  players in the major leagues would be paid less than their marginal product. 
D)  players in the major leagues would be paid more than their marginal product.

Question 17

All else equal, a firm will prefer to hire a worker who will

Accepted Answer

A)  stay at the firm for a long period of time. 
B)  stay at the firm for a short period of time. 
C)  be willing to work only a limited number of hours. 
D)  acquire firm-specific training from another firm. 
A)  stay at the firm for a long period of time. 
B)  stay at the firm for a short period of time. 
C)  be willing to work only a limited number of hours. 
D)  acquire firm-specific training from another firm.

Question 18

Most colleges pay teachers different salaries in different fields. For example, they usually pay science teachers more than English teachers. Public schools pay teachers in different fields the same. As a result, in public schools, if they want to get getter science teachers, they have to raise everyone's wage. Which of the following is a consequence of paying teachers different salaries, as they do in colleges?

Accepted Answer

A)  It raises the cost of hiring a higher quality of teachers. 
B)  It reduces the cost of getting good teachers in the areas that are in high demand. 
C)  It results in relatively fewer good teachers being hired in areas of high demand. 
D)  It results most teachers getting similar pay. 
A)  It raises the cost of hiring a higher quality of teachers. 
B)  It reduces the cost of getting good teachers in the areas that are in high demand. 
C)  It results in relatively fewer good teachers being hired in areas of high demand. 
D)  It results most teachers getting similar pay.

Question 19

Training costs

Accepted Answer

A)  exclude opportunity costs of trainees' time. 
B)  arise mostly from out-of-classroom training. 
C)  exclude the opportunity cost of using capital equipment. 
D)  exclude opportunity costs of trainers' time. 
A)  exclude opportunity costs of trainees' time. 
B)  arise mostly from out-of-classroom training. 
C)  exclude the opportunity cost of using capital equipment. 
D)  exclude opportunity costs of trainers' time.

A monopsony's marginal worker has a marginal revenue product of $12 an hour and a wage of $8. A minimum wage of $10 will have which of these effects?

In Japan workers receive rates of formal training than in the United States and this leads to quit rates.

During a recession, average labor productivity tends to decrease because output falls and

Two employers, A and B, pay the same wage but Employer A faces a more inelastic supply curve of labor than Employer B. Both firms are monopsonies but have similar outputs and technologies. Other things being the same, then in the long run

Statistical discrimination is

An increase in quasi-fixed costs would probably lead to a(n) in the number of employees hired and a(n) in the number of overtime hours worked.

Employment-at-will means that

Specific training is paid for by

Legislation requiring employer-provided health insurance for part-time workers would probably the employment of part-time workers and the overtime of full-time workers.

If a firm offers specific training to its workers, when the training is over,

Which of the following event will likely lead a firm to use overtime rather than hire new workers

A monopsony can hire one worker at a wage of $5, two workers at a wage of $6 each, three workers at $7 each, and so on (each added worker adding one dollar to the wage rate). If the marginal revenue product for all workers is $16, what wage will it pay?

Workers with firm-specific training are likely to be laid off than are workers with general training because

If reserve clauses were outlawed in major-league baseball,

All else equal, a firm will prefer to hire a worker who will

Training costs

Introduction

Overview of the Labor Market

The Demand for Labor

Labor Demand Elasticities

Supply of Labor to the Economy: the Decision to Work

Labor Supply: Household Production, the Family, and the Life Cycle

Compensating Wage Differentials and Labor Markets

Investments in Human Capital: Education and Training

Worker Mobility: Migration, Immigration, and Turnover

Pay and Productivity: Wage Determination Within the Firm

Gender, Race, and Ethnicity in the Labor Market

Unions and the Labor Market

Unemployment

Inequality in Earnings

The Labor Market Effects of International Trade and Production Sharing

Filters

Exam 5: Frictions in the Labor Market

A monopsony's marginal worker has a marginal revenue product of $12 an hour and a wage of $8. A minimum wage of $10 will have which of these effects?

In Japan workers receive ________ rates of formal training than in the United States and this leads to ________ quit rates.

During a recession, average labor productivity tends to decrease because output falls and

Two employers, A and B, pay the same wage but Employer A faces a more inelastic supply curve of labor than Employer B. Both firms are monopsonies but have similar outputs and technologies. Other things being the same, then in the long run

Statistical discrimination is

An increase in quasi-fixed costs would probably lead to a(n) ________ in the number of employees hired and a(n) ________ in the number of overtime hours worked.

Employment-at-will means that

Specific training is paid for by

Legislation requiring employer-provided health insurance for part-time workers would probably ________ the employment of part-time workers and ________ the overtime of full-time workers.

If a firm offers specific training to its workers, when the training is over,

Which of the following event will likely lead a firm to use overtime rather than hire new workers

A monopsony can hire one worker at a wage of $5, two workers at a wage of $6 each, three workers at $7 each, and so on (each added worker adding one dollar to the wage rate). If the marginal revenue product for all workers is $16, what wage will it pay?

Workers with firm-specific training are ________ likely to be laid off than are workers with general training because ________

If reserve clauses were outlawed in major-league baseball,

All else equal, a firm will prefer to hire a worker who will

Training costs

Introduction

Overview of the Labor Market

The Demand for Labor

Labor Demand Elasticities

Supply of Labor to the Economy: the Decision to Work

Labor Supply: Household Production, the Family, and the Life Cycle

Compensating Wage Differentials and Labor Markets

Investments in Human Capital: Education and Training

Worker Mobility: Migration, Immigration, and Turnover

Pay and Productivity: Wage Determination Within the Firm

Gender, Race, and Ethnicity in the Labor Market

Unions and the Labor Market

Unemployment

Inequality in Earnings

The Labor Market Effects of International Trade and Production Sharing

Filters

In Japan workers receive rates of formal training than in the United States and this leads to quit rates.

An increase in quasi-fixed costs would probably lead to a(n) in the number of employees hired and a(n) in the number of overtime hours worked.

Legislation requiring employer-provided health insurance for part-time workers would probably the employment of part-time workers and the overtime of full-time workers.

Workers with firm-specific training are likely to be laid off than are workers with general training because