Exam 17: The Labor Market and the Distribution of Income

Tyler's wage rises and he chooses to increase the number of hours he supplies to the labor market.What does this imply about the relative sizes of the substitution effect and the income effect? Explain.

Which of the following statements about minimum-wage laws is FALSE?

During World War II,the percent share of income earned by the top 10 percent of wage earners in the United States

The tendency of firms to substitute away from a factor whose relative price has risen and toward a factor whose relative price has fallen is called the

Which of the following is a reason why wage rates may differ among workers?

Cash assistance makes up approximately ________ percent of total expenditures on means-tested programs.

What happens when a firm encounters diminishing returns? What causes diminishing returns?

Table 17.2 -Refer to Table 17.2.The marginal revenue product of the fourth worker is

Discrimination can affect the income that workers earn due to their race or gender.

Explain the output effect of an increase in the wage rate.

Assume Edward considers eating out to be a normal good.The income effect of a wage increase for Edward implies that Edward's demand for eating out will be ________ and Edward's labor supply will be ________.

Wage rates may differ across workers because of differences in occupational preferences.

Recall the Application about the salaries paid in Major League Baseball to answer the following question(s). Some Major League Baseball players are free agents, meaning they are free to negotiate a contract with any team. Other players are journeymen and apprentices, who are restricted to a single team. -Recall the Application.How are average salaries of MLB players determined?

Discrimination in the U.S.workplace is not a determinant of income inequality.

If a firm uses the marginal principle,then the firm picks the quantity of workers

Government spending programs that provide assistance to those whose income falls below a certain level are called

Ignoring the income effect,an increase in the wage rate will cause an increase in labor supply.

Dogger's Snowboard Shop hires workers for the holidays.Dogger's sells snowboards for $150.The marginal product of the last worker hired is three.What is the marginal revenue product of the last worker?

The output effect is defined as

According to the learning effect,college education