Question 1

-Refer to Figure 17.2.If the demand for 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

Advancements in technology in the United States have resulted in

Accepted Answer

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

Question 3

As the dollar prizes for professional golf tournaments have increased,professional golfers have entered fewer tournaments per year.Is this type of behavior consistent with utility maximization? Explain.

Accepted Answer

Yes.As part of the labor supply decision

Question 4

Dogger's Snowboard Shop hires workers for the holidays.Dogger's sells snowboards for $150.The marginal revenue product of the last worker hired is $450.What is the marginal product of the last worker?

Accepted Answer

Marginal p

Question 5

Table 17.4
-Refer to Table 17.4.Suppose the firm is hiring only one worker when the wage rate is $12 and the output price is $2.Which of the following is true?

Accepted Answer

A)  The firm is maximizing profit. 
B)  The firm is incurring a loss and should hire less labor. 
C)  The firm could increase its profit by hiring more labor. 
D)  The wage rate will fall. 
A)  The firm is maximizing profit. 
B)  The firm is incurring a loss and should hire less labor. 
C)  The firm could increase its profit by hiring more labor. 
D)  The wage rate will fall.

Question 6

Table 17.1
-Refer to Table 17.1.The marginal product of the fourth worker is

Accepted Answer

A)  30. 
B)  20. 
C)  10. 
D)  5. 
A)  30. 
B)  20. 
C)  10. 
D)  5.

Question 7

Which of the following does NOT affect incentives to work?

Accepted Answer

A)  base cash payment 
B)  college premium 
C)  benefit reduction rate for income earned 
D)  All of the above affect incentives to work. 
A)  base cash payment 
B)  college premium 
C)  benefit reduction rate for income earned 
D)  All of the above affect incentives to work.

Question 8

Working longer hours at a more demanding job will not lead to higher income.

Accepted Answer

A) True 
 B)False

Question 9

The most important reason for money income growing more unequal in recent decades is an increase in

Accepted Answer

A)  government transfers. 
B)  the demand for skilled labor. 
C)  the number of high school graduates. 
D)  none of these 
A)  government transfers. 
B)  the demand for skilled labor. 
C)  the number of high school graduates. 
D)  none of these

Question 10

The poverty rate for elderly has fallen since 1959 largely due to

Accepted Answer

A)  more elderly workers. 
B)  Social Security benefits. 
C)  elderly people working longer. 
D)  better educational institutions. 
A)  more elderly workers. 
B)  Social Security benefits. 
C)  elderly people working longer. 
D)  better educational institutions.

Question 11

Economists say that labor demand is a derived demand because

Accepted Answer

A)  it does not come from competitive markets. 
B)  it depends on the demand for products that workers produce. 
C)  it is derived from nature. 
D)  it is derived from production. 
A)  it does not come from competitive markets. 
B)  it depends on the demand for products that workers produce. 
C)  it is derived from nature. 
D)  it is derived from production.

Question 12

For welfare recipients,the larger the benefit reduction rate for market income is,the

Accepted Answer

A)  higher the incentive to work additional hours. 
B)  lower the incentive to work additional hours. 
C)  stronger the labor union will be. 
D)  less spent on welfare programs. 
A)  higher the incentive to work additional hours. 
B)  lower the incentive to work additional hours. 
C)  stronger the labor union will be. 
D)  less spent on welfare programs.

Question 13

A wheat farmer sells wheat in a perfectly competitive market and hires labor in a perfectly competitive market.The market price of wheat is $2 a bushel,the wage rate is $10,the farmer employs five workers,and the marginal product of the fifth 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 less than the marginal revenue product. 
C)  Increase employment because the wage paid is less than the marginal revenue product. 
D)  Reduce 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 less than the marginal revenue product. 
C)  Increase employment because the wage paid is less than the marginal revenue product. 
D)  Reduce the product price so that the wage and marginal revenue product will be equal.

Question 14

Explain the input-substitution effect and provide an example.

Accepted Answer

Firms will substitute a factor of produc

Question 15

Recall the Application about who benefits from the immigration of low-skilled workers to the United States to answer the following question(s).
-Recall the Application.Which groups benefit from the immigration of low-skilled workers?

Accepted Answer

A)  firms and high school dropouts 
B)  consumers and low-skilled non-immigrant workers 
C)  firms and low-skilled non-immigrant workers 
D)  firms and consumers 
A)  firms and high school dropouts 
B)  consumers and low-skilled non-immigrant workers 
C)  firms and low-skilled non-immigrant workers 
D)  firms and consumers

Question 16

Floor Lamp Inc.is a perfectly competitive firm that currently employs 100 workers.The marginal revenue product of the 90th worker is $7.00 per hour.The wage rate is $8.00 per hour.To increase profits,this firm should

Accepted Answer

A)  increase employment until the MRP of labor equals $8.00. 
B)  continue hiring 100 workers because the firm earns a surplus of $1.00 on each worker hired. 
C)  decrease employment until the MRP of labor equals $8.00. 
D)  increase the price of lamps so that the marginal revenue product increases to $8.00 per hour. 
A)  increase employment until the MRP of labor equals $8.00. 
B)  continue hiring 100 workers because the firm earns a surplus of $1.00 on each worker hired. 
C)  decrease employment until the MRP of labor equals $8.00. 
D)  increase the price of lamps so that the marginal revenue product increases to $8.00 per hour.

Question 17

Table 17.6
-A soft pretzel shop can sell as many pretzels as it wishes at a price of $2.The production information is shown in Table 17.6.Complete the marginal product and marginal revenue product columns of Table 17.6.

Accepted Answer

The answer of   
Table 17.6
-A soft pretzel shop...

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

Advancements in technology in the United States have resulted in

As the dollar prizes for professional golf tournaments have increased,professional golfers have entered fewer tournaments per year.Is this type of behavior consistent with utility maximization? Explain.

Dogger's Snowboard Shop hires workers for the holidays.Dogger's sells snowboards for $150.The marginal revenue product of the last worker hired is $450.What is the marginal product of the last worker?

Table 17.4 -Refer to Table 17.4.Suppose the firm is hiring only one worker when the wage rate is $12 and the output price is $2.Which of the following is true?

Table 17.1 -Refer to Table 17.1.The marginal product of the fourth worker is

Which of the following does NOT affect incentives to work?

Working longer hours at a more demanding job will not lead to higher income.

The most important reason for money income growing more unequal in recent decades is an increase in

The poverty rate for elderly has fallen since 1959 largely due to

Economists say that labor demand is a derived demand because

For welfare recipients,the larger the benefit reduction rate for market income is,the

A wheat farmer sells wheat in a perfectly competitive market and hires labor in a perfectly competitive market.The market price of wheat is $2 a bushel,the wage rate is $10,the farmer employs five workers,and the marginal product of the fifth worker is 10.What would you advise this farmer to do?

Explain the input-substitution effect and provide an example.

Recall the Application about who benefits from the immigration of low-skilled workers to the United States to answer the following question(s). -Recall the Application.Which groups benefit from the immigration of low-skilled workers?

Floor Lamp Inc.is a perfectly competitive firm that currently employs 100 workers.The marginal revenue product of the 90th worker is $7.00 per hour.The wage rate is $8.00 per hour.To increase profits,this firm should

Table 17.6 -A soft pretzel shop can sell as many pretzels as it wishes at a price of $2.The production information is shown in Table 17.6.Complete the marginal product and marginal revenue product columns of Table 17.6.

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 demand for labor increases,then equilibrium wage will ________ and equilibrium quantity of hours will ________.

Advancements in technology in the United States have resulted in

As the dollar prizes for professional golf tournaments have increased,professional golfers have entered fewer tournaments per year.Is this type of behavior consistent with utility maximization? Explain.

Dogger's Snowboard Shop hires workers for the holidays.Dogger's sells snowboards for $150.The marginal revenue product of the last worker hired is $450.What is the marginal product of the last worker?

Table 17.4 -Refer to Table 17.4.Suppose the firm is hiring only one worker when the wage rate is $12 and the output price is $2.Which of the following is true?

Table 17.1 -Refer to Table 17.1.The marginal product of the fourth worker is

Which of the following does NOT affect incentives to work?

Working longer hours at a more demanding job will not lead to higher income.

The most important reason for money income growing more unequal in recent decades is an increase in

The poverty rate for elderly has fallen since 1959 largely due to

Economists say that labor demand is a derived demand because

For welfare recipients,the larger the benefit reduction rate for market income is,the

A wheat farmer sells wheat in a perfectly competitive market and hires labor in a perfectly competitive market.The market price of wheat is $2 a bushel,the wage rate is $10,the farmer employs five workers,and the marginal product of the fifth worker is 10.What would you advise this farmer to do?

Explain the input-substitution effect and provide an example.

Recall the Application about who benefits from the immigration of low-skilled workers to the United States to answer the following question(s). -Recall the Application.Which groups benefit from the immigration of low-skilled workers?

Floor Lamp Inc.is a perfectly competitive firm that currently employs 100 workers.The marginal revenue product of the 90th worker is $7.00 per hour.The wage rate is $8.00 per hour.To increase profits,this firm should

Table 17.6 -A soft pretzel shop can sell as many pretzels as it wishes at a price of $2.The production information is shown in Table 17.6.Complete the marginal product and marginal revenue product columns of Table 17.6.

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 demand for labor increases,then equilibrium wage will and equilibrium quantity of hours will .