Question 1

-Refer to Figure 17.2.If the supply of labor increases,then equilibrium wage will ________ and equilibrium quantity of hours will ________.

Accepted Answer

A)  rise; fall 
B)  fall; fall 
C)  rise; rise 
D)  fall; rise 
A)  rise; fall 
B)  fall; fall 
C)  rise; rise 
D)  fall; rise

Question 2

The Aire Fresco Ceiling Fan Factory hires workers to make ceiling fans.The factory sells the fans for $50 each.The marginal revenue product of this factory's sixth worker is $300.The marginal product of the sixth worker is

Accepted Answer

A)  6 ceiling fans. 
B)  12 ceiling fans. 
C)  150 ceiling fans. 
D)  It cannot be determined; more information is needed. 
A)  6 ceiling fans. 
B)  12 ceiling fans. 
C)  150 ceiling fans. 
D)  It cannot be determined; more information is needed.

Question 3

The idea that the demand for autoworkers stems from the demand for automobiles is known as

Accepted Answer

A)  the value of the marginal product of autoworkers. 
B)  derived demand. 
C)  indirect demand. 
D)  output demand. 
A)  the value of the marginal product of autoworkers. 
B)  derived demand. 
C)  indirect demand. 
D)  output demand.

Question 4

-Refer to Figure 17.2.If the supply of labor decreases,then equilibrium wage will ________ and equilibrium quantity of hours will ________.

Accepted Answer

A)  rise; fall 
B)  fall; fall 
C)  rise; rise 
D)  fall; rise 
A)  rise; fall 
B)  fall; fall 
C)  rise; rise 
D)  fall; rise

Question 5

Increased international trade has brought about

Accepted Answer

A)  fewer U.S. imports. 
B)  an increase in demand for low-skilled workers. 
C)  fewer U.S. exports. 
D)  an increase in demand for high-skilled workers. 
A)  fewer U.S. imports. 
B)  an increase in demand for low-skilled workers. 
C)  fewer U.S. exports. 
D)  an increase in demand for high-skilled workers.

Question 6

A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly competitive market.The market price of soybeans is $1 a bushel,the wage rate is $12,the farmer employs six workers,and the marginal product of the sixth worker is 10.What would you advise this farmer to do?

Accepted Answer

A)  Do nothing because the wage rate and the marginal product of the last worker hired are equal. 
B)  Reduce employment because the wage paid is greater than the marginal revenue product. 
C)  Increase employment because the wage paid is less than the marginal revenue product. 
D)  Increase the product price so that the wage and marginal revenue product will be equal. 
A)  Do nothing because the wage rate and the marginal product of the last worker hired are equal. 
B)  Reduce employment because the wage paid is greater than the marginal revenue product. 
C)  Increase employment because the wage paid is less than the marginal revenue product. 
D)  Increase the product price so that the wage and marginal revenue product will be equal.

Question 7

If the wage rate is less than the marginal revenue product of labor,the firm should ________ to maximize profits.

Accepted Answer

A)  hire less labor and produce less output 
B)  hire less labor and produce more output 
C)  hire more labor and produce less output 
D)  hire more labor and produce more output 
A)  hire less labor and produce less output 
B)  hire less labor and produce more output 
C)  hire more labor and produce less output 
D)  hire more labor and produce more output

Question 8

What are the effects of a minimum wage that is placed above the market equilibrium wage?

Accepted Answer

The quantity of labor demanded

Question 9

Disposable income is defined as

Accepted Answer

A)  all earnings received from labor and real estate markets. 
B)  all income from stocks, bonds, and real estate. 
C)  market income plus government transfers minus taxes paid. 
D)  all income minus contributions to 401K accounts and IRAs. 
A)  all earnings received from labor and real estate markets. 
B)  all income from stocks, bonds, and real estate. 
C)  market income plus government transfers minus taxes paid. 
D)  all income minus contributions to 401K accounts and IRAs.

Question 10

Which of the following situations is most likely to generate the largest output effect from a decrease in the price of one of a firm's inputs?

Accepted Answer

A)  The demand for a firm's product is inelastic. 
B)  The demand for a firm's product is elastic. 
C)  The inputs used in production are highly substitutable. 
D)  The inputs used in production are highly complementary. 
A)  The demand for a firm's product is inelastic. 
B)  The demand for a firm's product is elastic. 
C)  The inputs used in production are highly substitutable. 
D)  The inputs used in production are highly complementary.

Question 11

A firm's short-run demand curve for labor would shift to the left if

Accepted Answer

A)  there is a decrease in the price of the output. 
B)  there is an increase in the marginal product of labor. 
C)  there is a decrease in the wage rate. 
D)  all of the above 
A)  there is a decrease in the price of the output. 
B)  there is an increase in the marginal product of labor. 
C)  there is a decrease in the wage rate. 
D)  all of the above

Question 12

Graphically illustrate and explain the effect of an increase in the marginal product of labor on the demand curve for labor.

Accepted Answer

An increase in MP will cause t

Question 13

If a firm is maximizing profit,which of the following is true?

Accepted Answer

A)  The marginal revenue product is equal to the wage rate. 
B)  The marginal product of labor is equal to the average product of labor. 
C)  The marginal product of labor is maximized. 
D)  all of the above 
A)  The marginal revenue product is equal to the wage rate. 
B)  The marginal product of labor is equal to the average product of labor. 
C)  The marginal product of labor is maximized. 
D)  all of the above

Question 14

If Sparkling Cleaning Service uses only one variable input,labor.The firm's short-run demand curve for labor is the

Accepted Answer

A)  total product curve. 
B)  marginal product curve. 
C)  marginal revenue product curve. 
D)  wage rate. 
A)  total product curve. 
B)  marginal product curve. 
C)  marginal revenue product curve. 
D)  wage rate.

Question 15

The demand for labor is dependent on the demand for the outputs the labor is used to produce.

Accepted Answer

A) True 
 B)False

Question 16

Comment on the following statement: "The output effect and the input-substitution effect work in opposite directions,so it is possible that a decrease in the wage rate can lead to a decrease in the amount of labor hired."

Accepted Answer

The statement is false.The out

Question 17

The official poverty line in the United States is determined by a minimum food budget multiplied by five.

Accepted Answer

A) True 
 B)False

Question 18

All else equal,when the supply of workers is plentiful,we can expect market wages to be

Accepted Answer

A)  relatively high. 
B)  demand-determined. 
C)  relatively low. 
D)  above the equilibrium wage. 
A)  relatively high. 
B)  demand-determined. 
C)  relatively low. 
D)  above the equilibrium wage.

Question 19

A small supply of workers in a particular occupation could be due to

Accepted Answer

A)  artificial barriers to entry. 
B)  few people with the required skills. 
C)  high training costs. 
D)  all of the above. 
A)  artificial barriers to entry. 
B)  few people with the required skills. 
C)  high training costs. 
D)  all of the above.

Question 20

There are only winners from the minimum wage.

Accepted Answer

A) True 
 B)False

-Refer to Figure 17.2.If the supply of labor increases,then equilibrium wage will and equilibrium quantity of hours will .

The Aire Fresco Ceiling Fan Factory hires workers to make ceiling fans.The factory sells the fans for $50 each.The marginal revenue product of this factory's sixth worker is $300.The marginal product of the sixth worker is

The idea that the demand for autoworkers stems from the demand for automobiles is known as

-Refer to Figure 17.2.If the supply of labor decreases,then equilibrium wage will and equilibrium quantity of hours will .

Increased international trade has brought about

If the wage rate is less than the marginal revenue product of labor,the firm should ________ to maximize profits.

What are the effects of a minimum wage that is placed above the market equilibrium wage?

Disposable income is defined as

Which of the following situations is most likely to generate the largest output effect from a decrease in the price of one of a firm's inputs?

A firm's short-run demand curve for labor would shift to the left if

Graphically illustrate and explain the effect of an increase in the marginal product of labor on the demand curve for labor.

If a firm is maximizing profit,which of the following is true?

If Sparkling Cleaning Service uses only one variable input,labor.The firm's short-run demand curve for labor is the

The demand for labor is dependent on the demand for the outputs the labor is used to produce.

Comment on the following statement: "The output effect and the input-substitution effect work in opposite directions,so it is possible that a decrease in the wage rate can lead to a decrease in the amount of labor hired."

The official poverty line in the United States is determined by a minimum food budget multiplied by five.

All else equal,when the supply of workers is plentiful,we can expect market wages to be

A small supply of workers in a particular occupation could be due to

There are only winners from the minimum wage.

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

-Refer to Figure 17.2.If the supply of labor increases,then equilibrium wage will ________ and equilibrium quantity of hours will ________.

The Aire Fresco Ceiling Fan Factory hires workers to make ceiling fans.The factory sells the fans for $50 each.The marginal revenue product of this factory's sixth worker is $300.The marginal product of the sixth worker is

The idea that the demand for autoworkers stems from the demand for automobiles is known as

-Refer to Figure 17.2.If the supply of labor decreases,then equilibrium wage will ________ and equilibrium quantity of hours will ________.

Increased international trade has brought about

If the wage rate is less than the marginal revenue product of labor,the firm should ________ to maximize profits.

What are the effects of a minimum wage that is placed above the market equilibrium wage?

Disposable income is defined as

Which of the following situations is most likely to generate the largest output effect from a decrease in the price of one of a firm's inputs?

A firm's short-run demand curve for labor would shift to the left if

Graphically illustrate and explain the effect of an increase in the marginal product of labor on the demand curve for labor.

If a firm is maximizing profit,which of the following is true?

If Sparkling Cleaning Service uses only one variable input,labor.The firm's short-run demand curve for labor is the

The demand for labor is dependent on the demand for the outputs the labor is used to produce.

Comment on the following statement: "The output effect and the input-substitution effect work in opposite directions,so it is possible that a decrease in the wage rate can lead to a decrease in the amount of labor hired."

The official poverty line in the United States is determined by a minimum food budget multiplied by five.

All else equal,when the supply of workers is plentiful,we can expect market wages to be

A small supply of workers in a particular occupation could be due to

There are only winners from the minimum wage.

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

-Refer to Figure 17.2.If the supply of labor increases,then equilibrium wage will and equilibrium quantity of hours will .

-Refer to Figure 17.2.If the supply of labor decreases,then equilibrium wage will and equilibrium quantity of hours will .