Question 1

A profit-maximizing firm should hire more labor as long as

Accepted Answer

A)  the marginal product of the worker is positive. 
B)  the marginal revenue product of the worker is positive. 
C)  the marginal revenue product of the worker is greater than or equal to the wage rate. 
D)  the marginal revenue product of the worker is greater than or equal to the price of the output. 
A)  the marginal product of the worker is positive. 
B)  the marginal revenue product of the worker is positive. 
C)  the marginal revenue product of the worker is greater than or equal to the wage rate. 
D)  the marginal revenue product of the worker is greater than or equal to the price of the output.

Question 2

Labor skills are determined by innate ability,education,and work experience.

Accepted Answer

A) True 
 B)False

Question 3

List four reasons why the supply of labor in a particular occupation may be small.

Accepted Answer

(1) few people with the requir

Question 4

Most of the people living in poverty in the United States are elderly.

Accepted Answer

A) True 
 B)False

Question 5

If the marginal product of the third worker employed by a computer manufacturer is 50 computers,and the price of a computer is $500,the third worker's marginal revenue product is

Accepted Answer

A)  $50. 
B)  $500. 
C)  $25,000. 
D)  It cannot be determined; more information is needed. 
A)  $50. 
B)  $500. 
C)  $25,000. 
D)  It cannot be determined; more information is needed.

Question 6

The labor market supply curve illustrates that as

Accepted Answer

A)  more workers are hired, a lower wage rate needs to be paid. 
B)  the wage rate increases, more workers seek to be employed. 
C)  the wage rate falls, more workers will seek to be employed. 
D)  the price of the product produced by the worker rises, more workers will be employed. 
A)  more workers are hired, a lower wage rate needs to be paid. 
B)  the wage rate increases, more workers seek to be employed. 
C)  the wage rate falls, more workers will seek to be employed. 
D)  the price of the product produced by the worker rises, more workers will be employed.

Question 7

Explain why the demand for high-skilled workers has increased in the United States during the past three decades.

Accepted Answer

One reason is the advances in technology

Question 8

Occupational licensing

Accepted Answer

A)  lowers the supply of labor in a particular occupation. 
B)  lowers the wages earned by the workers in a particular occupation. 
C)  ensures that consumers always get the best possible service. 
D)  raises the employment level of workers in a particular occupation. 
A)  lowers the supply of labor in a particular occupation. 
B)  lowers the wages earned by the workers in a particular occupation. 
C)  ensures that consumers always get the best possible service. 
D)  raises the employment level of workers in a particular occupation.

Question 9

In the years since welfare reform took place,the number of people receiving aid has gone down.

Accepted Answer

A) True 
 B)False

Question 10

Frank's Burgers employs workers in a competitive market.It currently has 15 employees.The marginal revenue product of the 15th worker hired is $8.50 per hour.The market equilibrium wage is $10 per hour.Is this firm maximizing profit? Explain.

Accepted Answer

No,the firm is not maximizing profit.A p

Question 11

Suppose there is a great article on a major online Web site about the amazing career path of being a community college instructor,and this encourages many people to seek that path.This causes the supply of community college instructors to increase,shifting the supply curve to

Accepted Answer

A)  the left, the equilibrium wage to decrease and the equilibrium quantity to increase. 
B)  the left, the equilibrium wage to increase and the equilibrium quantity to decrease. 
C)  the right, the equilibrium wage to decrease and the equilibrium quantity to decrease. 
D)  the right, the equilibrium wage to decrease and the equilibrium quantity to increase. 
A)  the left, the equilibrium wage to decrease and the equilibrium quantity to increase. 
B)  the left, the equilibrium wage to increase and the equilibrium quantity to decrease. 
C)  the right, the equilibrium wage to decrease and the equilibrium quantity to decrease. 
D)  the right, the equilibrium wage to decrease and the equilibrium quantity to increase.

Question 12

Workers who install and maintain electrical power lines are known to have high wages.We can (in part)explain this because

Accepted Answer

A)  the job is likely to be very dull. 
B)  the job is likely to be very dangerous. 
C)  many individuals are qualified to do this job. 
D)  the job requires a low level of skill. 
A)  the job is likely to be very dull. 
B)  the job is likely to be very dangerous. 
C)  many individuals are qualified to do this job. 
D)  the job requires a low level of skill.

Question 13

Which of the following statements represents the signaling effect of a college education?

Accepted Answer

A)  A person who is naturally more productive is likely to invest in education. 
B)  Education can turn an unproductive person into an productive person. 
C)  The information gained in a college classroom increases the productivity of graduates. 
D)  all of the above 
A)  A person who is naturally more productive is likely to invest in education. 
B)  Education can turn an unproductive person into an productive person. 
C)  The information gained in a college classroom increases the productivity of graduates. 
D)  all of the above

Question 14

Minimum-wage laws

Accepted Answer

A)  increase the efficiency of labor markets. 
B)  are always effective at alleviating poverty. 
C)  force an imbalance between the supply of and demand for labor. 
D)  result in an increase in employment. 
A)  increase the efficiency of labor markets. 
B)  are always effective at alleviating poverty. 
C)  force an imbalance between the supply of and demand for labor. 
D)  result in an increase in employment.

Question 15

Comment on the following statement: "An increase in the wage always leads to an increase in the quantity of labor supplied."

Accepted Answer

The statement is false.If the substituti

Question 16

If the price of labor falls,

Accepted Answer

A)  we can conclude that the demand for capital will always decrease because only the input-substitution effect is relevant. 
B)  we can conclude that the demand for capital will always increase because only the output effect is relevant. 
C)  the change in the demand for capital cannot be predicted because the input-substitution effect and output effect work in opposite directions. 
D)  the demand for capital will be unaffected, because only a change in the price of capital would change the demand for capital. 
A)  we can conclude that the demand for capital will always decrease because only the input-substitution effect is relevant. 
B)  we can conclude that the demand for capital will always increase because only the output effect is relevant. 
C)  the change in the demand for capital cannot be predicted because the input-substitution effect and output effect work in opposite directions. 
D)  the demand for capital will be unaffected, because only a change in the price of capital would change the demand for capital.

Question 17

Table 17.2
-Refer to Table 17.2.If the wage per day is $100,this T-shirt manufacturer will be maximizing profits if he hires ________ employees.

Accepted Answer

A)  two 
B)  three 
C)  four 
D)  five 
A)  two 
B)  three 
C)  four 
D)  five

Question 18

Higher wages could lead workers to choose to work less hours.

Accepted Answer

A) True 
 B)False

Question 19

The income earned by the top one percent in the United States has decreased in recent years.

Accepted Answer

A) True 
 B)False

Question 20

The demand for labor

Accepted Answer

A)  is a derived demand. 
B)  depends on the demand for the output the labor can be used to produce. 
C)  is affected by the value placed by the market on the output produced by labor. 
D)  all of the above 
A)  is a derived demand. 
B)  depends on the demand for the output the labor can be used to produce. 
C)  is affected by the value placed by the market on the output produced by labor. 
D)  all of the above

A profit-maximizing firm should hire more labor as long as

Labor skills are determined by innate ability,education,and work experience.

List four reasons why the supply of labor in a particular occupation may be small.

Most of the people living in poverty in the United States are elderly.

If the marginal product of the third worker employed by a computer manufacturer is 50 computers,and the price of a computer is $500,the third worker's marginal revenue product is

The labor market supply curve illustrates that as

Explain why the demand for high-skilled workers has increased in the United States during the past three decades.

Occupational licensing

In the years since welfare reform took place,the number of people receiving aid has gone down.

Frank's Burgers employs workers in a competitive market.It currently has 15 employees.The marginal revenue product of the 15th worker hired is $8.50 per hour.The market equilibrium wage is $10 per hour.Is this firm maximizing profit? Explain.

Suppose there is a great article on a major online Web site about the amazing career path of being a community college instructor,and this encourages many people to seek that path.This causes the supply of community college instructors to increase,shifting the supply curve to

Workers who install and maintain electrical power lines are known to have high wages.We can (in part)explain this because

Which of the following statements represents the signaling effect of a college education?

Minimum-wage laws

Comment on the following statement: "An increase in the wage always leads to an increase in the quantity of labor supplied."

If the price of labor falls,

Table 17.2 -Refer to Table 17.2.If the wage per day is $100,this T-shirt manufacturer will be maximizing profits if he hires ________ employees.

Higher wages could lead workers to choose to work less hours.

The income earned by the top one percent in the United States has decreased in recent years.

The demand for labor

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

International Trade and Public Policy

Filters

Exam 17: The Labor Market and the Distribution of Income

A profit-maximizing firm should hire more labor as long as

Labor skills are determined by innate ability,education,and work experience.

List four reasons why the supply of labor in a particular occupation may be small.

Most of the people living in poverty in the United States are elderly.

If the marginal product of the third worker employed by a computer manufacturer is 50 computers,and the price of a computer is $500,the third worker's marginal revenue product is

The labor market supply curve illustrates that as

Explain why the demand for high-skilled workers has increased in the United States during the past three decades.

Occupational licensing

In the years since welfare reform took place,the number of people receiving aid has gone down.

Frank's Burgers employs workers in a competitive market.It currently has 15 employees.The marginal revenue product of the 15th worker hired is $8.50 per hour.The market equilibrium wage is $10 per hour.Is this firm maximizing profit? Explain.

Suppose there is a great article on a major online Web site about the amazing career path of being a community college instructor,and this encourages many people to seek that path.This causes the supply of community college instructors to increase,shifting the supply curve to

Workers who install and maintain electrical power lines are known to have high wages.We can (in part)explain this because

Which of the following statements represents the signaling effect of a college education?

Minimum-wage laws

Comment on the following statement: "An increase in the wage always leads to an increase in the quantity of labor supplied."

If the price of labor falls,

Table 17.2 -Refer to Table 17.2.If the wage per day is $100,this T-shirt manufacturer will be maximizing profits if he hires ________ employees.

Higher wages could lead workers to choose to work less hours.

The income earned by the top one percent in the United States has decreased in recent years.

The demand for labor

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

International Trade and Public Policy

Filters